We are coming to the end of January 2021 already! What a long month it has been. Phew, aren’t we all glad that it’s coming to an end. Anyway, And as per every month, I will be looking into providing an update for my portfolio in January 2021.
January was a month of many happenings – Donald Trump was Impeached (again), Joe Biden was sworn into the White House (and started Control-z-ing everything Trump has done), the COVID-19 Vaccine was rolled out globally (though new strains of the virus keep appearing), and of course, the great WallStreetBets Short Squeeze of Gamestop (that practically made headlines the past week so I am sure you’ve heard).
Note: The Gamestop Short Squeeze, while entertaining to watch from the side, is honestly pretty detrimental for the integrity of the market.. So I really hope it ends soon.
We are also into Earnings Season again! with companies announcing their quarterly profit as well as their 2020 performance. Many big tech announced last week – Apple had a blowout quarter, Facebook with a so-so performance, and Tesla with an ok performance. That said, all share prices dipped despite good reports.
Anyway, we had a rather flat month in January, with prices fluctuating 1 to 2 percent daily, though it weakened significantly over the past week due to the short squeeze and poor vaccine news. Because of the Market’s weakening, I currently hold very little cash and have entered a couple of new positions. I have also been building up on my watchlist the past couple of months with smaller-cap stocks and will look to enter into them when the opportunity arises.
Anyway, my portfolio performance kinda looks like this right now:
As of now, my US Portfolio is up about 29% overall, and my SG portfolio is still down about 13%. That said, it has been steadily improving, so I am happy to see that!
Anyway, to update you on my movements for January, here’s another short summarised post. I bought into new positions this month because of its dip, but anyway, here it is:
I bought into numerous smaller-cap stocks that are more speculative. They are mainly FuboTV (FUBO), Cleanspark (CLSK), Mohawk (MWK), Progeny (PGNY), and Skillz Inc (SKLZ). I am quite bullish on Mohawk and Skillz especially.
I also entered the ARK Genomic ETF (ARKG) due to the potential of genomics in the future. This is also my only ETF position.
I added on to my existing positions in SEA Limited and Fiverr on pullbacks
For larger caps, I added a fresh position on Taiwan Semiconductor Manufacturing Company (TSM), and Peloton (PTON)
I also closed all positions on Microsoft (MSFT), Veeva Systems (VEEV), Nvidia (NVDA), Wingstop (WING), and Intel (INTC) to create a larger cash position for smaller caps.
I also managed to close my Singapore Position on Capitaland! Finally!
Anyway, the fear and greed index is in a fearful position right now (see below). This isn’t investment advice, but it could be a good chance for you to add on pullbacks for companies on your watchlist. As Warren Buffett once said – “Be fearful when others are greedy, and be greedy when others are fearful”. Remember to do your own due diligence before you buy into any company.
The fear is probably caused by the instability of the market due to the Gamestop saga. No one really knows how that’s gonna pan out, but I do expect major volatility in the coming weeks. There is a huge possibility of a sell-off in 2021 as well.
As of now, I plan to continue with the same investment thesis for February – Buying into great companies on dips and holding them for the long term, and I will still be trimming and selling some companies if their growth story fails to deliver in 2021. That said, if the Gamestop situation calls for any concern such that we will need to liquidate more positions, I will update it on the telegram chat.
In any case, I will update my positions in the coming months if anything changes. As always, if you have any questions, feel free to comment below and I will be pleased to answer them!
With that, invest safe! And here’s wishing each one of you a Happy New Year!
Happy New Year! We are finally into 2021! And as per every month, I will be looking into providing an update for my portfolio in December 2020. In addition to that, I will be doing a quick review of my investment performance for the year 2020.
Without further ado, lets take a look at what happened in December. This month, markets were rather flat. Some days were really strong, while others were weaker. That said, there were 2 important COVID-19 related news this month – the fact that there is a new strain of the virus in the UK (more contagious btw), and that vaccines have started to be distributed and injected worldwide. This has caused stocks to rocket and plunge on news accordingly. Overall, we have had a very strong month in December.
This month, we also saw a couple of hyped-up IPOs such as DoorDash, AirBnb and C3.ai. While most of these are waaaaaaaay above valuation right now, I do think that Airbnb and C3.ai can be good opportunities to enter on pullbacks. We can also look forward to more IPOs next year, with Roblox and Affirm making their public debuts in 2021.
Because of the Market’s strength in December 2020 (though it did weaken slightly towards the end of the month), I have not done much in the market and am holding a little cash to enter new positions in 2021. I have been, however, building up on my watchlist the past couple of months with smaller-cap stocks, and will look to enter into them when the opportunity arises. I do think 2021 will be a pretty exciting year for investors!
Anyway, my portfolio performance kinda looks like this right now:
As of now, my US Portfolio is up about 33% overall, and my SG portfolio is still down about 9%. That said, it has been steadily improving, so I am happy to see that!
Anyway, to update on my movements for December, here’s another short summarised post. I only bought into positions for some of the work-from-home stocks because of its dip, but anyway, here it is:
I entered positions in Palantir, Unity Software, Virgin Galactic, Nio and Farfetch, and plan to hold onto it for the long term for its growth potential.
I sold all my positions in Apple due to its stagnating growth and its lack of innovation. I also sold all my Facebook positions because I have never been very comfortable holding their stocks anyway
I also sold my Microsoft positions to use the money for the position in Virgin Galactic.
I entered new speculative positions in FuboTV and CRISPR Therapeutics.
I also re-entered a Peloton position.
Anyway, the fear and greed index is in a pretty neutral position right now (see below). So, this could be a good chance for you to add on pullbacks for companies on your watchlist.
Come January, Joe Biden will officially take the position of the 46th President of the United States. To be frank, I don’t expect many new disruptive policies and do think that he will be spending most of his time undoing some of the previous policies. As such, we can expect certain cyclical and environmental-related companies to benefit due to his strong support in the battle of Climate Change.
In January, despite the continuous increase in cases globally in recent weeks, we can also expect more and more COVID-19 vaccines to be rolled out, and I do expect the majority of the world to receive the vaccine by the end of 2021. As such, we can expect to see many travel-related companies recovering further (i.e. SIA, Boeing etc.). In fact, many work-from-home stocks will probably continue falling (i.e. Zoom / Peloton). However, if you do feel like they can continue to grow and innovate in a post-COVID world, this could perhaps be a great opportunity for you to add on.
2020 Portfolio Review
Given that we are finally in December, I will be doing a quick portfolio review on my performance this year.
This year, I have entered position in tech companies the most. As you can see in the chart below, Tech companies take up 51.1% of my entire portfolio. This is followed by Consumer Discretionaries (14.7%), Healthcare (13.9%), Bonds (6.7%), Communication Services (5.3%), Industrials (3.7%), Financials (2.6%), Consumer Staples (1.7%) and Real Estate (0.3%).
I do think I am a little too heavy on Tech, and will be looking into diversifying a little more into spaces like healthcare in and consumer discretionary in 2021. That said, it is my tech positions that have been moving my portfolio forward.
As for stocks, my largest positions are now in Crowdstrike, Tesla, Sea Limited, Fiverr, Lemonade and Square. My smallest positions are a little more speculative and risky, and it includes companies such as Virgin Galactic and Nano-X.
We now move on to my portfolio’s annual performance vs the S&P500. As you can see below:
My time-weighted returns are about 88% as of now, whereas the S&P500’s time-weighted returns are 24%.
As of now, I plan to continue with the same investment thesis for 2021 – Buying into great companies on dips and holding them for the long term. I will also be trimming and selling some companies if their growth story fails to deliver in 2021. I will continue updating this in the coming months.
With that, invest safe! And here’s wishing each one of you a Happy New Year!
Season’s Greetings 😀 I’m back after a busy month, so apologies for that. Anyway, we are in the final days of 2020 as we embark into a hopefully-better 2021. This year has been nothing short of eventful – there was the COVID-19 Pandemic (and a vaccine that took an unbelievably short time to get approved, rendering whatever I studied during my undergrad days inaccurate hahaha), a Singapore General Election, the US Presidential Elections, and multiple environmental catastrophes (oh no).
That said, 2020 has also been very exciting to watch in terms of the stock market and the investment space. Here, I will be writing about 7 lessons that I have learned the past year that we can all bring into 2021.
1. What happened in 2020 isn’t normal
In 2020, we experienced one of the more ferocious and fastest stock sell-offs we have seen in a long time. In the space of just five weeks, the S&P 500 lost more than a third of its value, and many stocks fell by almost 30%. Of course, travel-related stocks were the hardest hit, and many work-from-home stocks absolutely flew off the roof. Just look at Zoom Video Communications (or even Peloton).
I mean, check out their most recent 3rd Quarter Results. 367% y/y revenue growth – absolutely insane.
What was more surprising here though was the speed at which the recovery happened. Since then, the S&P 500 is up more than 65%, and many individual stocks have posted monumental gains since the March bottom.
What we need to know that what we observed this year isn’t normal at all. I am sure many of us have posted strong gains in our portfolios. However, it would be a huge mistake to assume that this can be easily repeated in 2021. We should always be prepared for whatever comes next year, be in buying more on the dips, or selling off due to long-term issues with the company.
That said, the stock market is almost always forward-looking, and its resiliency suggests that investors remain very confident that things will turn out well in the long run.
2. Time in the Market is still more important than Timing the Market
Yes, I have repeated this many times, and this still holds true by the way. As long as the company is fundamentally strong, and can grow its revenue at its perceived rate, you will stand to gain in the long term (3 to 5 years at the very least). This is especially so if the company is constantly innovating and tapping onto new “Blue Oceans”, hence increasing its market dominance.
3. That said, valuations should not be ignored
Investors have always referred to traditional valuation metrics (such as P/E Ratio, P/S Ratio, PEG Ratio, etc.) when trying to value a stock. However, its relevance has been steadily declining with the emergence of High-Growth Companies with no net income (rendering the P/E ratio inaccurate), as well as crazy-overvalued stocks. Stocks like Tesla have insane P/E ratios as we speak.
This was also a monster year for IPOs, with many newly public companies fetching extremely high valuations. Just look at Snowflake for example, or more recently Airbnb. Snowflake’s shares doubled on its first day of trading from the IPO value, and Airbnb’s market cap is now higher than both Marriott and Hilton.
Oh wait, but doesn’t this go against the the rule of not timing the market? I generally do not time the market, especially if I have very high conviction on the company that I purchase. That said, we should always take into consideration expectations vs reality. If the valuation of a stock is too high (hint hint AirBnb), especially when it is due to hype and not due to fundamentals, you can still choose to avoid the stock entirely despite it looking seemingly like a good investment. You see, if an overvalued stock does not meet the growth expectations set upon it, you can expect a very drastic pullback in the quarters to come. The price might never recover again unless the company does something different.
As such, always take a quick look at valuations as well. Remember, we don’t have to own every stock that is on an upward trend, especially if it’s extremely hyped up.
4. Fundamentals are the way to go in the long term
As an investor, we will always look for companies that can make us money. So the question is often – how do we identify companies that can do that for us? The answer is simple – finding constantly innovating companies with strong financial fundamentals.
Just look at SEA Limited for example.
Many might say that they are still not profit-making and that this is a cause for alarm. That said, if you look deeper into the balance sheet, you will soon realize that a majority of their spending has been on sales and marketing. We can also observe that their revenue has been growing strongly in recent quarters and years. While they currently still have high amounts of debt, we will need to appreciate that SEA Limited has the financial capability to pay them off easily. However, what management has done here is to use that money they owe, to continuously innovate their product and claim more market share in various regions.
This is something we all like to see in a company we own – strong leadership, growing Total Addressable Market (TAM), huge amounts of innovation, and an ever-growing revenue rate.
5. Do not “all-in” into the Market
As investors, we will often be tempted to put in large amounts of money into the stock market when we see a large pull-back. Some of us will even put all our money in, and this can be really dangerous.
This is because we will never know how much a stock price will fall and whether it can continue falling. Trust me, you do not want to be catching the end of a falling knife, especially for many stocks that are considered undervalued right now but might take an excessively long time to recover (i.e. Intel).
Truth is, and many people know this, is that we can never really predict whether a stock price will go up or down in the short term. What you can do here though, is to enter in tranches. This means to say – you should initiate a starter position in a company you really like during pullbacks, but hold some free cash on the side to average down again if the stock price continues to fall. And if the stock price goes up after you entered the starter position, you should still be happy with the profit (not to mention that it helps with FOMO as well).
6. Be Selective on Guru Picks
The year 2020 has led to the emergence of many self-proclaimed investment gurus online. Many offer investment or quick get-rich courses (at crazy high prices), while others give you monthly stock picks for a subscription fee.
Make no mistake, I am not against such gurus. Some of them provide really good investment research (such as the writer of Potential Multibaggers on Seeking Alpha, Kris. He provides really in-depth research on his monthly stock picks, and this really improves my conviction in the companies he recommends). I mean, I myself have signed up for some of these services for investment ideas (especially since I do not stay in the US). That said, we should always be careful about some of their recommendations. When a stock is overhyped and you feel like it’s too much, it probably is.
What you need to know here is that everyone has their own opinions on investments, and no one investor is always right in their stock picks. What you need to do here is to refer to such gurus for just ideas, do your own homework on the company, stick to your investment thesis, and identify great companies to invest in for the long term.
7. Life is so much more than just tracking the market daily
As the title says, life is really so much more than just tracking the market daily. There’s so a lot to do in life that frantically obsessing over whether your stocks will make money or not.
Rather than tracking the stock prices by the hour, spend some time with your loved ones. Go out for some exercise, or have a nice meal with your partner/family/friends. At the end of the day, sure, you might be making 30% of profits every year. But trust me, all this money will be meaningless if you are unable to spend it with your loved ones. So get out there, create some memories, and enjoy what life has in store for us daily!
PS: This doesn’t mean you should completely ignore your stocks though. You should still keep a lookout for news that can fundamentally change the business you are holding, and react to it accordingly. At the end, do a portfolio rebalance semi-annually, and you should be good to go from here.
Going into 2021, our investment thesis and strategy should not change. We should continue looking for strong companies to invest in for the long term. Buy on dips, hold on bull-runs, and only sell when your thesis changes.
I will be writing another article on my 2020 Investment Review and performance next week. Till then, happy holidays and stay safe everyone! Here’s wishing everyone an amazingly successful 2021 as well 🙂
Feel free to subscribe to my telegram channel as I will be providing insights into some stocks I am watching, sharing daily stories and updates, as well as posting summaries of my blog updates there. Check it out here: https://t.me/thecommonsgmillennial