Friday File: Buys on the Edge, plus a look at Dividend Growth and Compounding
by Travis Johnson, Stock Gumshoe | May 22, 2020 2:43 pm
Updated buys and sells in the Real Money Portfolio, plus notes on SE, CCI, NVDA, MPW, FSLY, NET, ROKU, BAM and more...
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Source URL: https://www.stockgumshoe.com/2020/05/friday-file-buys-on-the-edge-plus-a-look-at-dividend-growth-and-compounding/
Travis, how do you see the legislative move towards delisting Chinese stocks in US affecting Alibaba and Ten Cents?
Tencent isn’t US-listed, but I don’t know how it might shake out. My best guess is that it leads to nothing real, just a political stunt, but there’s certainly a possibility that BABA or some other Chinese firms could be booted from the US exchanges (and London or Hong Kong or the Euronext would be happy to accomodate them and take those fees, I imagine). What I’ve lately seen is a proposed requirement that Chinese firms get delisted IF they can’t verify that they’re not state-controlled and provide audited evidence to that effect… which is probably still squishy enough to probably let almost everyone through that doesn’t have formal state ownership or control.
Plenty of non-Chinese companies have meaningful state ownership, too, especially in areas like telecom, energy and utilities, so maybe this capital protectionism will extend further… but again, I think the most likely outcome is bluster that leads to no real impact.
Thanks, Travis. Your reply is appreciated. I didn’t really want to cell either of those positions.
I believe Tenscent is listed as Tencent Holdings Limited (TCEHY) on the OTC .
That’s a trading symbol that US investors can use, but it’s not actually “listed” in that sense — they haven’t raised money on the US exchanges and don’t have a registered listing on the NYSE or Nasdaq.
I missed the boat to buy DEAC ( the warrant ) but I do have DKNG, I am very happy with it. I have VTIQW, so far it performs much better than I expected. May be you can check it out.
I like to see what do you think.
Thank you.
VTIQ is another hot “story” SPAC, since they’re merging with Nikola Motor next month to take that electric big-rig company public, and electric vehicles are an exciting idea (not unlike space flight or sports gambling). Haven’t looked at the financials for Nikola, but I expect this is largely enthusiasm over “maybe this is the next Tesla” and it will probably be extremely volatile over the next couple months.
I was curious how you feel about BAM’s interest in Virgin airlines, as airlines have tended to be big money losers and what if any effect it would have on their overall outlook if they were to re-enter and win that bidding.
Do you mean their participation in the Virgin Australia bidding out of bankruptcy? I haven’t followed the details but last I heard they weren’t in the short list. Don’t know if they have interest in any other Virgin properties, but from what I’ve seen so far it wouldn’t make a big difference to Brookfield overall. I wouldn’t buy an airline, personally, but maybe if they’re cheap enough it will end up being worthwhile.
Sorry if this is a stupid question Travis, but when you refer to microdose purchases or sales, just how small are you talking? Do you refer to incremental changes based on a percentage of your holdings (ie, changing by X% of your holdings), or relative to your overall account size (X% of your account), or something else?
My guess is that your making small incremental changes of ~2-3% relative to your individual holding, but it occurred to me that I could simply, you know, ASK you and make sure I’m not completely misunderstanding your intentions. 😉
Thanks regardless!
Anything under about 0.1% of the portfolio I think of as an incremental “micro-dose” buy (or sell, I suppose, though those are rarer), and I add those to the portfolio reporting but don’t send out a Trade Note each time one of these small buys goes through.
So for a $500,000 portfolio, for example, that would be ~$500 increments. For a smaller position that I’m building up from a low base that might be 10% or more of a position, for a larger one it could be closer to 1%.
None of that is set in stone, of course, just trying to communicate clearly about what I’m doing.
Makes perfect sense. Thanks for elaborating!
Hey Travis, I’m fairly new at investing and I really enjoy your newsletter. What do you think of Fairfax India now? It’s pulled back quite a bit. Also, do you have any info on Cypress Development? I was told it’s a great lithium play. If you’re familiar with it, do you think it has great potential or just hype? Thanks
Travis,
I have a different take about Chinese stocks listed in US exchanges. About a month ago, I began selling off ALL Chinese stocks. As of today, I have no Chinese stocks in my portfolio.
Reason? There will be blood. It is real.
Travis, thanks from Hong Kong for your insight and input. Can I ask for your thoughts as to why you invested in BAM rather than BIP with a greater yield?
Also, Your thoughts on airline stocks. We’re a few months ahead of the US on the COVID curve and one thing I can guarantee is that normal life will return at some point. Thanks
I purchased BIPC (corporation) instead of the BIP – LP (limited partnership). The corp allows mutual funds, etc to invest in it. BIPC is now about 5 point ahead of BIP and I am up 30% since March.
Iv’e owned BIP for years… Then their dividend I believe was given as shares of BIPC..so I have both.. Love the stock…
Hello Travis, In my life Probably the money spent on stockgumshoe subscription is well spent. I’m very happy about it. your Friday file writings are like reading a contemporary story!. Just a quick question regarding your post for irregulars. If possible, when you post trade note would you able to post actual options buy(For instance SE200619C80 & SE220121C90). I bought leap option(SE220121C90), but missed out SE200619C80. This would be a great help.
Hi Travis, Greetings from Cape Town, South Africa. My son, a plastic and reconstructive surgeon persuaded me to sell all my stocks (which consisted of mainly tech stocks such as FAANGM) because in his opinion, from extensive study of the virus, the market was going yo fall off the cliff. He sold his stocks on 20 March and I sold mine on 27 March, and you know what happened between those two dates!! So now I am trying to decide (at age 83) what is the best way forward. I have recently started selling short put options, but do not think I am going to make a living from this and it does require balls at my age.
Wow, rough timing johnyfly. I would buy a modest amount of gold/silver stocks such as AGI, GOLD, PAAS, SAND. I have 50% of my family trusts in a basket of 20 of them. I have most of my personal invested assets in SMSI. They are a value SAAS stock right now and I expect them to double within a year, and if they execute, they will triple. If you’re really interested, send me a private message, if that’s possible, and I can share some links and a DCF model.
Regarding BAM, how does Oaktree / Howard Marks figure into the case for BAM?
Travis, One quick question for you. You somewhat described your strategy and I was wondering if you use trailing stop losses, rather than just a regular stop loss. I was stopped out this week with ROKU after making a 22% gain, using a trailing stop loss, and have personally found this to be a very effective trading tool.
I do watch trading stops on my positions, but often don’t follow the stop signal — I use it as a reminder to re-assess.
Hi Travis, I realize you are working on the presentation of the Real Money Portfolio but, while you are at it, could you move columns D, E and F concerning ‘Last Trade’ to before or after the ‘Stop Loss Trigger’ column, preferably after. I am trying to avoid using the arrows at the bottom of the spreadsheet.
Travis, I read alot about the convergence of AV/EV in the near future. Some see it gathering momentum faster than others and there remain serious hurdles before it becomes ubiquitous but I do believe its coming. Is this a convergence you are playing(besides NVIDIA) and if so how do you see it emerging and have you taken a position in anything? Love what you do.
I expect that evolution will continue, though the prospects of full autonomy for most cars in most places are probably going to be pretty far out into the future. The only really direct investments I have in that area are in the leading companies who also have other businesses which are much more important right now — Alphabet and NVIDIA. My first look if I were to buy more directly into the space would be Aptiv, a company I’ve owned in the past, but most of the “directly exposed” autonomous driving plays are primarily parts and systems suppliers for both electric and gasoline vehicles and thus are very dependent on the volume of new cars sold… when it comes to their income statements, weak car sales in general are a bigger near-term driver than the positive rising trend of autonomous or electric vehicles.
When you “nibble”, and I realize this is a broad question depending on the individual stock, are your “nibbles ” in the $100., $500., $1000. ,$5000., or $10,000. range or is my question too general.
Your comments on dividends and stock appreciation were appropriate, but I have graduated(?) from stock market appreciation to living off my investments in my retirement years. So far I have been able to use just dividends and not selling capital appreciation for my income (works well as long as the tide rises and/or the companies don’t cut or eliminate dividends).
Travis, totally agree with your sentiments about FB. I have, too, stayed away from that company (and FB itself) for some years now, because of my personal feelings about how they run the company and what they stand for (or don’t stand for)!
Me too.
Plus their product keeps getting more and more cumbersome to use (noticed on the occasions when i “have to” use it, for outside reasons).