Friday File: New SPAC, Annual Review pt. 4, and more…

By Travis Johnson, Stock Gumshoe, February 19, 2021

Finally we get a kind of almost bad week! Nasdaq 100 down 1%! Remember your stop losses if you use them, remember your plan for how to handle risk and your promise to yourself to have some discipline, and remember that when everything falls at once, that’s when you get to buy the things you might not have otherwise ever been willing to buy.

We’re not in a selloff at the moment, of course, we have no idea what will happen next week, but falling prices are both terrifying for investors who’ve grown accustomed to nonstop momentum… and the friend of the long-term investor.

Cash has fallen as a percentage of my Real Money Portfolio, and that’s not a comfortable position… but it comes both because everything else has risen, and because I’ve continued to find smaller stocks I want to buy. That continued this week, though the position I added yesterday was another pre-deal SPAC, which I think of as being essentially “cash plus a possible boost.” This time it was Howard Lindzon’s entry into the SPAC world, Social Leverage Acquisition (SLACU). Here’s what I posted about that in a Trade Note yesterday, in case you missed it:

Just a brief note that I added some capital to a pre-deal SPAC today.

This is probably not a particularly smart move, to be clear.

I bought some units of Social Leverage Acquisition Corp (SLACU), each unit consists of a share of Social Leverage Corp plus a quarter of a warrant ($11.50 strike, five year term), a pretty standard-looking SPAC.

So why buy? Mostly because I think Howard Lindzon is fun to follow on Twitter, and I’m willing to spend a few cents of premium to see what he does with this SPAC. He has been a vocal proponent of a lot of interesting early-stage growth stories in venture capital at Social Leverage, from Robin Hood to Rally Rd, and co-founded StockTwits, so it will be interesting to see what he and the team come up with for an investment… he’s certainly well-connected and should be able to source some viable deals, though given the current mania for SPACs he’ll probably overpay. Thanks to his massive following on social media, I expect the SPAC to get a fair amount of attention if and when they land on a deal, and to have a good chance or rising sharply on any ...

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