Friday File: Lemonade, Handling Success, and a Couple New Watchlist Stocks
by Travis Johnson, Stock Gumshoe | December 4, 2020 4:15 pm
Some more thoughts on emerging insurance disruptors, SPACs, base metal royalties, and what to do with huge winning positions in nosebleed-valuation stocks
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Source URL: https://www.stockgumshoe.com/2020/12/friday-file-lemonade-handling-success-and-a-couple-new-watchlist-stocks/
Did u say you have $90 call options on Sea Ltd? WOW!
I’m new to options but curious. what’s a single contract worth now that the market is closed?
Also you mentioned EEM calls in your irregulars synopsis… are you favoring emerging markets strongly, or is it a(professional, of course) FOMO position?
That’s merely a small allocation to a sector I expect to do well over a couple years…. mostly because it’s so cheap and has been left behind. I’d like to find some individual stocks in the sector that I like, but haven’t really hit on much yet.
The SE options were just fortunate timing, I bought a big chunk when I initially bought the shares early this year and have gradually sold them off, what remains is the last of my position. Options are in 100 share multiples, so one contract is the right to buy 100 shares at $90/shr, meaning each contract of that particular call option should be around $11,000 as of today.
Travis, Your prediction was right on spot on LMND about recommendation in SA by fool service. I am not sure about Rule breakers, but my hunch is you are correct there too. Keep rocking.
I listen to some of the Fool podcasts and you can often deduce some of their stock picks from there. They have talked about lemonade quite a few times in the last couple of months.
I’m sure i read somewhere that someone created an algorithm to buy the recommendations as soon as they were released and then sell them after the initial bounce subscribers, im not sure if its true but is clever if they did. Being recommended by them seems to be as positive as a good earnings report.
Regarding Sea ltd, i wonder if the gaming side did drop whether Tencent would just bankroll it further. I presume they want to continue to get a foot hold in the south east asia e-commerce market and take on Alibaba. I wonder if this reduces the risk a little and puts some kind of floor on the stock price?
I don’t think they’ll have any trouble getting additional capital if they need it. Don’t know if they’d want more from Tencent specifically or not, they definitely don’t want to be seen as a Chinese company in places like India.
I can sure see what you mean about Lemonade and Metromile. It must be a age thing. I’m over 50 and I hate doing things on my phone. Obviously we probably keep alot of sensitive thing on our computers. I use a desktop and I am not too worried about someone walking off with it (never know lol) To actually carry all that information on something I carry around and could lose easily, is unthinkable to me.
Also, everything is so small. My eyes and phone tech are going in opposite directions! Anyhow, I enjoy talking to people, especially for insurance, because I always have many questions particular to my situation. I guess younger people enjoy doing things on their phones. Anyhow, I tried to get quotes for my properties on Lemonade. Both were denied. one because it is a rental and one for not being near a fire-station.
From the website, I really can’t see how this could be a huge disruptor, but what do I know. Not much 🙂
Metromile did give me a quote and it was about what I pay with Travelers, but I could see how they could do well with the per mile thing. I hate the idea of being tracked, but with phones and everything else spying on us. It is hard to stay under the radar.
I’m a old school pre 9-11 kinda guy. It is not the fact if I have nothing to hide. It is the fact no government, or corporation has a right to invade my privacy, for any reason. Period. I cut down my flying after 9-11, because of this. 9-11 was never about terrorism, it was about control. Now we have the face diapers. Not about the flu that does not kill you, but control. How far can they push it. Pretty far obviously as few seem to care.
One of my favorite quotes of all time, especially if you are wondering where this is leading, it ain’t good.
“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”
― Frank Zappa
The Fool writes me to rebalance the portfolio…..
After a decadelong bull market, it’s easy for your investments to get out of balance — especially if the stocks you own have managed to crush the broad market indexes…….
……..Having a portfolio that’s balanced according to your risk tolerance and asset allocation ensures that you won’t get surprised when the next downturn comes. …….
……
I see now …. they offer me a new subscription!
Travis, thanks for your thoughts. I am one of the people that has dabbled in stocks for the last 10 years, but finally decided to subscribe to the fool SA about last summer. I just about broke even for 10 years and last year my portfolio of mostly SA recommendations is up about 80%. This seems way too good to be true and I know it is just circumstance and luck. I want to sell everything but don’t want to pay the taxes. I know other people are in the same boat and probably think the are investment gurus, so thanks for the reminders of how quickly we may be humbled.
Just to point out. I am a MF Rulebreakers subscriber and they haven’t recommended Lemonade. As an aside there have been a few stocks that Rulebreakers recommended right before you did. When Rulebreakers and Travis both agree on a stock the result has usually been really good. (I think Shop TTD Fastly come to mind)
Thanks… I wonder which MF service recommended it in November before Stock Advisor jumped aboard. Maybe one of the “portfolio” services.
have you looked at ROOT? It is another auto insurance disruptor. Recent IPO.
Only briefly, a good company to use in comparison. They raised a lot of
Money on that IPO and the offering is at least similar to other new app-based insurance platforms.
Just an FYI The current Friday File …shows via the most recent discussion link….but not the premium content link (which only shows the latest Friday versions from November.
fixed!
DBX aka Dropbox started similar product called hello Sign as DOCU Docusign . I bought JAn 2023 strike 45 at 2.80
Travis = I found this post while researching an AI tease from Louie Navellier. ( coincidentally Louie is teasing his Advisor service on the Gumshoe website). It is my understanding that Lemonade is a MF recommendation and that it is in the insurance business. I reached out to them to consider their Pet Insurance for our dogs. Their website is very hip and friendly, and I liked it. What I did not like is their limited coverage, copay and capped list of coverage. Most Vet services will charge a much higher rates than their limits. Please check this out. Of course, they will offer a discount of 10% if you sign up for their homeowners (and renters) insurance. Here, we would need a much more inclusive plan with a carrier with extensive experience and a reputation before considering an upstart. I would need to see several years of reviews in Consumer Reports and Other rating agencies to consider Lemonade for such an important coverage!
Wow, no one is up to debating Lemonade? Classic pick that sounds sexy and could be the Future of Insurance? The same day The Fools recommended it, the stock popped! Is that sustainable? It will be if the thousands of Foolish Subscribers see it is one of their picks, right? Hold it for 3-5 years?
Maybe Warren Buffett will buy LMND to appeal to Millennials!
Stay Tuned!
Hi Travis thank you for your comments regarding timing for selling high flyer stocks. i am having a mental block with this exact thing. i have been fortunate with Shop stock and it is currently way overweight in my taxable account. To sell, say $100K of Shop i would pay approx. $25 k tax…then i would need to make 33% on the proceeds of $75k to get back to the $100k. i know i will have to pay tax at sometime on my realized capital gains.
Anyone else experience this? Maybe with time i will feel differently. (I have only had a taxable account for 4 years)
Travis thank you for what you do.
cheers from Canada!
Selling is certainly harder than buying, at least for most people. There’s no shame in doing both of them slowly — when in doubt, I try to make small decisions, not big ones, so I might microdose into a position with small buys every few weeks for a long time, and there’s no reason you can’t sell similarly if you want to shave off some profits. Making small decisions makes the mistakes easier to stomach.
If you don’t want to take a tax hit by selling, you can also buy put options to protect a position from a feared big drop, if that’s your concern. It tends to be quite expensive, though, if you’re dealing with nosebleed stocks like Shopify.
And, of course, paying attention to the tax bite is important and certainly impacts your overall returns… and maybe there are taxable losses you can book to offset gains if you want to take profits in a position, though it’s hard to find losing positions this year… but don’t let the tax tail wag the portfolio dog, especially if you have a very long time horizon for your investments and are thinking about building a portfolio for the 2030s, not for 2021.
Great Advice for Americans, Travis. Not sure if Canadians have the same tax treatment for capital gains, do they? I have a friend in Holland who cannot write off any losses in his accounts. Diesel should check with his tax accountant. I agree that we don’t want to let the “tax tail wag the portfolio dog,” however, for most investors buying a single stock with $100,000 involved, it might be wise to take the initial investment back. So if Diesel put in $20,000 Canadian and it is now worth $100,000, then selling $20,000 and moving that money into another investment makes sense.
I wanted to let folks here know I had a conversation by email with a very cool representative from LMND. She contacted me to let me know they Do Not offer coverage for teeth cleaning, although it could be “considered sometime in the future.” I wanted to tell her that some of us are doing a stock evaluation on her company, but that probably would have ended our nice communication!
I have now asked if they cover vaccinations. If this may be of interest to more people, maybe we should have a separate posting outside of the FridayFile. I am not sure how you keep track of all of the cross
Referencing of stock data, Travis. I would need A/I and a lot of Crown Royal!