Friday File: Freaking Out
by Travis Johnson, Stock Gumshoe | September 24, 2021 12:50 pm
ATVI, SFIX, BOMN Pershing and more... a stop loss and a little buying in the Real Money Portfoilo
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Source URL: https://www.stockgumshoe.com/2021/09/friday-file-freaking-out/
hanging in there has proven to be very good for me, I have made a lot more than 6% over the last 20 years .. but it is tough sometimes to watch the market go down a lot and wonder if it will come back, but so far it has .. let’s hope this continues
I bought in the depths of March 2020, on your advice, and the only way I was able to do it was with your “microdose” strategy, little buys of a lot of stocks. It was a brilliant move, but it was hard, hard, hard. I have to admit that I also sold a few stocks in the depths, which was a big mistake, in retrospect. Buying low and not selling low are hard decisions to make, a lot harder psychologically than it would seem.
Well put, thanks!
I did the same, was one of the best decisions I’ve made market-wise!
You have touched on this before, but what is wrong with DFH. The chart looks horrible and I can’t see BOMN touting this as a success. Are we grabbing a falling knife, or take a leap? I do like your dabbling in MMM and BAM . I did also, including some BRO,which seems to have some momentum. Keep watching TTD, but won’t come in to my buy range – should I buy anyway? Thanks for the updates.
BOMN bought their DFH position years ago, when it was private, they’re up more than 500%.
What’s going on now? Nervousness about a slowdown in housing, to some degree, anxiety about their big acquisition perhaps, I don’t know. I think the drop is short-sighted and they could be building something really fantastic, and I like the Texas deal, but the market doesn’t currently agree with me. DFH could absolutely drop to $10 if pessimism about homebuilding kicks in, but I think their future is bright and I can be patient with this one. I can also be wrong, of course.
As for TTD, my more
confident buy range is in the low $50s. For companies that are really fantastic and that you just want to own, even if you can’t stomach the price, I often suggest buying just a taste, even a single share. That will make you look at it differently, we all pay closer attention when money is on the line, and it might help you to be confident about buying at some future point when it does fall to a more attractive valuation (or even help you to notice when that happens).
And I also found it interesting that Pershing Square, in their latest shareholder update, is putting on a meaningful hedge. That position is essentially a hedge against inflation and rising rates, with a minor cost if the hedge doesn’t end up being needed, and with asymmetric returns if inflation turns out to be scary.
I am new to investing thoughtfully – I have invested in mutual funds and Vanguard funds for many years. I am trying to figure out how to hedge my portfolio against the inflation and rising rates risk. Can you elaborate on how Ackman is doing it or how you are doing it?
Thanks!
when do Groy warrants expire
About 2-1/2 years now.
GROY.WS
expire 3/9/24
exercise @ 7.50
Marin Katusa is pushing GROY as a freebie pick.
Marin loves everything Amir Adnani does, I think. I don’t like Adnani’s Gold Mining, the company that created GROY, it was far too passive in development (with a lot of low quality assets) while also being super promotional with investors, but with the long term warrant available and the likelihood of actual producing assets with the merger, I was willing to dabble.
Dear Travis, I recommend for anyone ‘freaking out’ they should subscribe to Stock Gumshoe. Your practical comments, without the adjectives and adverbs, gives sense to the the world of share dealing and its highs and lows. I cannot thank you enough for the sanity you bring to a very risky occupation. Carry on with the good, and valuable work.
Good Words for Travis. All True.
How do you pick you option dates and price? Do you go off gut feel or do you have some fancy software that’s looking for good pricing?
Feasible valuations at the strike price, at a low enough price to provide meaningful leverage while comfortably allowing for a 100% loss.
Which means more “gut feel” than precision, for sure. I do not use software and don’t care about the technicals and “greeks. “
Nick Hodge’s tease on Star Gas (Helium) is a bit pricey ($1,900) for the symbol! Tom
Indeed, I covered that teaser pitch a while back here: https://www.stockgumshoe.com/reviews/nick-hodges-family-office-advantage/jeff-bezos-sells-billions-in-amazon-shares-to-chase-galactic-star-gas/
I stopped out of ATVI a while back as the technicals started to weaken, I don’t think the share price have to do much with their HR projects, just check out EA, they are on a similar path as the whole gaming subsector seem to be, check out NERD, GAMR – they other gaming ETFs (HERO, ESPO) fare a bit better due to their heavy exposure on NVDA, AMD, SE
I’m sure that’s true to some degree, those two have tended to trade in unison most of the time, though ATVI got a bit ahead of itself on valuation this year and led me to start favoring EA (I had favored ATVI in 2020)… but the divergence since ATVI got into hot water, particularly with the SEC looking into their disclosures, was a bit more dramatic. Some of recent drop in EA was primarily caused by a delay to their Battlefield 2042 product launch, I think, though it’s also true that most of the gaming stocks have had a bad month.
For some reason, I like the Sky Harbour idea, so I bought a s**tload of warrants.
Travis, I know you sold out of LMND for tax reasons, but do you still have confidence in their business model/prospects? . . . . and why did you buy BAM? It looks like it is way above your buy under price.
Confidence in LMND? No, I wouldn’t say Confidence is the word, but I do have a fascination with their business model and there is certainly a possibility that they can grow their customer base fast enough for it to work.
BAM is currently a little over my latest max buy price ($55), but was below that at my last buy, early last week. I bought primarily because they’re continuing to grow their fee-bearing assets, and as that money is put to work their earnings will grow, but thematically I’m also interested because of their longstanding strength in renewable energy and infrastructure investing.
I wouldn’t chase BAM with big purchases at $55, there are typically opportunities with larger 10-20% pullbacks in the shares every year or two and those are more opportunistic, but, on the other hand, I also waited too long in holding out for the bigger dip with BAM, so I would not own shares unless I’d gotten lucky with that COVID collapse to $25 last year… in retrospect, I’d have been better off buying steadily during the years that I thought it was a bit too expensive and that I had “missed it”.
I’d like to own this for a long time and let their compounding magic build, so I’m happy to build on that position with smaller buys whenever the valuation is justifiable.
Sorry, I must have overlooked when you raised the buy under for BAM from $40.
Was there a reason you let go of ASLEW? I think you were one day early, but I assume the warrants are about topped out after today. Isn’t the buyout price usually around 18$
Just bad timing 🙂
Early redemption
Rights kick in if the stock is over $18 for a few weeks, I believe, though it could go higher in the interim — if the stock rises to $30 next week, the warrants should
follow.
That’s also an option for the company, not
An obligation, they don’t technically have to redeem or accelerate the expiration if they choose not to.
I had read somewhere that ASLE can’t redeem the warrants for at least a year based on something to do with the CARES act, regardless of ASLE’s price. If that’s the case I think they have another 6x in them from today’s price before being forced to cash out or redeem :). I’m already up 22x with them lol. But ASLE is growing quite well, has no debt, is run by seemingly good management, and has some interesting product dev. outside of just retrofitting old planes. The main one is AerAware, which from what I can tell is close to legitimate commercialization. I’ve got to imagine that EFVS will be standard on most jetliners not that far into the future. China is already ahead of the curve on mandating that all commercial aircraft in China have such systems within the next five years or so.
Could be. I’m not aware of any CARES act adjustments to the SPAC prospectus terms, but I certainly could have missed something.
The link appears to be invalid for “When Do Investors Freak Out?: Machine Learning Predictions of Panic Selling.”
This one worked for me
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3898940
Thanks, I had an error in the coding. Fixed now.
And you were the first to notice, so I guess we know how many people do the extra-credit homework 🙂