Stock Portfolio Review : Risk Aversion and Liquidations
Over the last couple months I’ve been moving from Stocks back into Cryptos. As is often the case I haven’t been able to time things perfectly but for the game I’m in as long as you hit more often than you miss then you’re in front. If you embrace that hit-and-miss concept philosophically then those misses don’t hurt so much, but they still do hurt! Looking back over the last couple of months I give myself a 6 out of 10 and that sort of score is usually good enough so I’m not complaining.
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If you’re a new follower or need a refresher then my Stocks posts kind of start on the 5th December 2017 with 5 Reasons I Sold My Cryptos and then a week later on the 13th and 14th I posted Selling Cryptos and Buying Stocks (Part 1 – Innovation Plays) and (Part 2 – Defensive Plays). In 2018 I have been gradually liquidating some of those positions but I’ve had a few questions asked of me about stocks lately so thought it was time to do a bit of an update on where I see things.
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The first thing I want to say up front about Stocks is that I am currently nervous about a potential market crash. The Stock Market has been going so strong for so long, with Price Earnings Ratios off the charts and a lot of valuations at historical highs. For a while I thought we were going to crash just as Janet Yellen was stepping out of the Fed Chair role.
I share many of my fellow Gold Bugs views that the Fed has been propping up the market for a long time now and the “Fed Put” policy underpinning the market might be over. If that is the case then we still might crash, or we could just head into a bear market. There are a few similarities to the market in 1987 but what happened back then was the market went into a final “Blow off top” stage from about April to October and I think that is a possibility too. Nobody knows for sure what’s going to happen, I guess what I am saying is that I urge caution.
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Here is a bit of an update on the Portfolio I laid out in December and where things stand today :-
Innovation Plays
| Sector | Code | Weight | Bought | Current | Change |
|---|---|---|---|---|---|
| Medical Marijuana | AC8 | 5% | 0.69 | 1.685 | +144.2% |
| Lithium Mining | PLS | 5% | 0.96 | 0.915 | -4.7% |
| Gambling | TBH | 5% | 0.335 | 0.135 | -59.7% |
| Drone Technology | DRO | 5% | 0.19 | 0.20 | +5.3% |
A bit of a mixed bag but happy to be in front overall. I have liquidated all of these holdings except for half of the TBH investment because Innovation Plays is not where you want to be when you are concerned about a possible market crash. I actually placed my order to sell TBH and got half of my order matched at 0.305 in mid-February but it tanked soon after due to a Capital Raising and then there has been growing uncertainty surrounding their licensing. The sentiment on TBH has been poor ever since. Thankfully I made a nice profit on the AC8 Medical Marijuana play to cover TBH but I am not selling TBH at this depressed price as it’s due a recovery if the broader market holds up.
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Defensive Plays
| Sector | Code | Weight | Bought | Current | Change |
|---|---|---|---|---|---|
| Gold Mining | NCM | 12% | 22.16 | 21.55 | -2.7% |
| Gold Mining | NST | 10% | 5.83 | 6.63 | +13.7% |
| Gold Mining | EVN | 8% | 2.39 | 3.31 | +38.5% |
| Consumer Staples | WOW | 30% | 26.76 | 28.60 | +6.9% |
| Aged Care | REG | 10% | 3.75 | 3.94 | +5.1% |
| Aged Care | JHC | 10% | 2.18 | 1.94 | -11.0% |
Some great returns here on the Gold Miners. I’ve taken some profit on EVN but otherwise am holding firm and may even put some more into this sector as I really like the Gold chart from a Technical Analysis perspective and I believe Fundamentals remain strong despite rising interest rates. Newcrest has been a bit disappointing after an issue with the Tailings Dam at their Cadia mine in early March, but the share price looks to be recovering now so this could be a value pick up. I’ve held firm in the Consumer Staples with WOW being one of my favourite defensive plays but I’ve let the Aged Care stocks go. Sentiment is slowly turning positive for them but once again I am concerned that a market crash would probably wipe out a few retirement funds so maybe they are too much of a risk in this climate.
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All up I am happy to have gotten some steady returns and I've avoided the brunt of the Boom-Bust in Cryptos though as I mentioned at the top I’ve been shifting some funds from Stocks back into Cryptos over recent months. In the long run I remain a pretty big bull on the Crypto technology. I’m probably due to do an update on my Crypto positions so stay tuned and I’ll try to write something up on that next week.
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Sell in May and go away?
I live in the Southern Hemisphere so it doesn't really hold down here. Unless I am taking a long flight to somewhere sunnier :)
Interesting plays. I noticed you went in on lithium. I never made a move, because I thought the trade was a bit overcrowded. Frankly, too many people were talking about it.
I sold my shares of NCM near the peak a few years back because the districts they mine in are making me concerned. I've pretty much realigned my portfolio to the Americas. I won't get outside of Canada, United States, and Mexico. Even Mexico is getting dicey.
I appreciate the share, cheers bud
You are right, Lithium has been a crowded trade for a while now. I still think it was a good play though I was probably a bit late on the hype cycle PLS is going into production soon so if the broader market bounces I'll probably kick myself shortly.
Sounds like you've got the right approach. Sovereign Risk is a growing issue for some of the global miners and I also like to stay within my own country borders if possible. Lots of good gold miners here so that's not an issue.
You're doing well. The stock market is still killing me from the dip. But I play with options, so there's that. I was having a fantastic run up until then so I can't complain too much I guess.
Also, I don't think we're due for a crash. Not yet anyway. The fundamental economic indicators are still too strong.
Thanks @choogirl I do need to talk to you about those options. I haven't had a serious go at options since I got wiped out in 94 but some of my risk statistics and analytics tools are a lot better these days (they were non-existent back then)
Way out of my league here, but it's interesting to see what you're doing with the offensive and defensive stances. I'm not an expert, but even I can see the Fed has been propping up a lot of things for an amazingly long time and so it just can't continue to do that indefinitely, can it? Unless there's something I don't understand about markets, economics and general physics, what goes up does eventually come down, right? How fast and how far should be the question.
Well, that is the big question? Can they keep the music playing? Maybe.
The risk is that a lot of investors and traders have been assuming the Fed will support the market so they have taken more risk and become a bit complacent. That makes chances of a panic greater if they suddenly realise the Fed is changing policy. That's why there was a bit of a freak out when Yellen was moved on IMHO.
Well until within the last several weeks, it didn't seem to matter. Now, the stock markets at least have been dialing back some. I keep hearing rates are going up, potentially three before the year is out.
As long as the US is the reserve currency for most of the world, the Fed can just digitize and digitize. But I would think at some point the rest of the countries get hurt enough in that exchange that they follow China and others and say enough is enough, and then we're awash in our own monopoly money. Unfortunately, with our economic assured mass destruction, when we go down, everyone else goes down and how do you survive that without war?
Mate, once again you are talking yourself down saying this stuff is out of your league, but you are absolutely on point here. Most people here and in the US are just sleepwalking into this. Australia may as well be part of the US, we go down with you guys and there are a growing number of countries now reducing their dependency on the US dollar.
War is a very real prospect. Every time we've had a huge shift like is due we've had war. I really hope it doesn't come to it this time.
I say it's out of my league because I apparently can't understand it. I can't understand how more debt than we could pay back within our lifetimes is okay. I can't figure out how the unpaid liabilities we have, an amount much larger, is okay to just keep accumulating. I don't understand how printing money is supposed to help in the end. I can't understand why anyone in charge of this would ever think it's okay. I know they like their power, and I know there's plenty of greed and indifference because they think they'll come out okay, but how can you be so morally bankrupt? It's like sociopaths are running the show.
I'd like to think they think nothing will happen, that somehow we'll miraculously grow ourselves out of it, but that can't possibly be true. That would make them inept and naive and I can't believe they're either. They know what they're doing. They know it's wrong, they know it's all going to collapse someday (in fact, they must be wondering how in the world it's still going), and they're doing it anyway. They must think they're going to personally come out of it okay. That must be they're only real concern. Either that, or they just want to watch the world burn.
You are thinking like a sensible person with morals.
The politicians care about the election cycle. Austerity is very unpopular as a policy platform, while spending and basically "pork barelling" the electorate is a proven vote winner. They think that as long as they can kick the can into the next election cycle then the debt bill is the next guys problem.
The bankers care about making money in the short term. Privatise profits and socialise losses. They squirrel wealth away when the going is good and make sure they are made of teflon when it comes down. They know exactly what they are doing. Some of these guys should have gone to jail for fraud after the GFC but they got bonuses instead.
The lefties are always pushing for more welfare and deficit spending too, some are naive but others are fully aware that this will cause a big problem down the road. However, they know that then they can blame any collapse or crisis on another "failure of capitalism" and push for nationalisation of industry. So it works in their favour too.
It all makes sense once you apply a bit of cynicism ;)
I was a Licensed Series 7 Stockbroker for almost 28 Years. I have to tell you @buggedout I don't ever see myself ever buying a Stock ever Again. I have precious metals and Cryptos to be out of the Bankster System..................
Wow, that is a huge call for a Stockbroker of 28 years. I would love to hear the story of how/when you changed your view. Sounds like it would have been an impressive red pill moment.
The dead cat on that chart is great. Do you think the Goldman/BTC news will start another crypto bull run?
Yes. It is just a question of timing. It's all a big cycle but getting the timing right on it is hard! :)
Man I just can't stand the ASX, to me it is so boring, to gets 10x gains you really need to have a lot of luck. At least with crypto it's volatility provides great trading and investing opportunities, the ASX is just sideways movement for months on end.
I agree Stocks are important but I will focus on international markets in the future.
Yes, the ASX is a lot slower. Still if you want safety it is probably less likely to give you a heart attack than cryptos. That said, I do like the upside potential in Cryptos and I'm putting my money where my mouth is :)
I will say now is the best time to invest in crypto currencies because the market is now takinv an upward movements and the potential and fundamental for the market to rise higher is very clear. I will say sale more stocks and buy more crypto curriencies now. Because that is exactly what am doing and I am reaping the gain due to the continual and steady rise in price of crypto @buggedout
Glad to see the weed one was a winner 😂
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