Friday File: The SPAC Heard ‘Round the (Newsletter) World… plus, a new Gumshoe Portfolio is born

And yes, another buy (sort of) and Annual Review Part 6 (almost done!)

By Travis Johnson, Stock Gumshoe, March 5, 2021



None of us who speculate or invest in individual stocks in a volatile market are really managing money with the dispassionate application of numbers and analysis, a computer could do most of that better than humans can… no, what we’re mostly managing is our emotions. It’s been a wild week, and it’s often hard to maintain any perspective when you see exciting stocks flying up or down by 20% in the course of a day or two… and there are plenty of stocks in my portfolio that fit that bill, so I’m certainly not immune, though I’ve mostly held back from any big moves this week while we see how things settle (if, indeed, they settle — we can’t know the future, and both a 12% drop and a 60% drop look the same at the beginning).

So I’m working on the Annual Review some more this week, which got mired down in a couple of the high-flier names because I wanted to think those over very carefully, and I’ve also got an interesting new initiative to share with you… as well as some thoughts on the Stansberry SPAC merger and some other minor updates on companies of interest. I still have a bunch of stocks that I haven’t gotten to in this annual process, so I’m sorry about that — I know folks are asking about my thoughts about PAR (PAR) and Tiptree (TIPT) and plenty of others, and I will get to them… but not today.

Given the wild moves the market has made so far this year, I should be crystal clear when I talk about the most popular stocks in our universe. Valuations of all high-growth stocks are intertwined, and all such stocks are volatile, which means they can both go up crazy fast and fall down crazy fast. When I say that something is a reasonable relative value, that’s different than saying that it has a solid value foundation in any historical context — there is really no historical context for stocks that trade at 30X or 50X sales working out well for investors, those valuations have only been common at market extremes.

Compared to other stocks that are also at historically high valuations, some of the ones I like look more compelling or justifiable… and some of these businesses are strong enough, and sustainable enough, to have a ...

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