Tuesday, April 7, 2020

Recent Sell

Another set of sales in our portfolio. A lot of stocks and ETFs in this round. The ongoing correction has been a spectacle to behold. The stock and bond markets have diverged quite a lot over the past few days. What initially appeared to be a dip which lot of investors chased is starting to look like the start of a much bigger issue. Where this market is headed is anyone’s guess. For the record, I don’t believe the media narrative that the market is falling just because of COVID-19 (and then things will return to normal once warm weather is here). There have been lots of fundamental problems and signs of excess for a while and COVID-19 was probably just the initial domino to fall.

I bought the initial dip as well when the correction started two weeks ago, but decided to reverse course and sell some of my high beta stocks & broad index funds and go to cash. Even with some of my high conviction long investments (I know…I appear crazy right now)..but with the Fed panicking (& all other central bankers hitting the panic button), I believe we will see a lot more problems before the next cycle of growth can begin. A lot of these high beta stocks were close to my cost basis (as I initiated a position in most of them in 2019), so in a negative environment, I expect pick them back up at a much lower price.
Seeing our portfolio drop by 5-digit numbers was not a pretty sight and when the market bounced after the first few days, I decided that it was the best opportunity to take advantage to get out of the way and go to cash and sit this storm out.
Yes, its a bit of market timing, but more importantly the daily drops was causing my stress level to go up quite a bit and causing a big distraction from my day job. So, for my overall sanity, this move made sense.
So, here are all the stocks & ETFs I sold off in the last week.
  • Alphabet Inc (GOOGL) Gain = +4.8%
  • Auxly Cannabis (XLY.V) Loss = -56%
  • Ferrari NV (RACE) Loss = -2.0%
  • S&P Global Inc (SPGI) Gain = +6.9%
  • Twilio Inc (TWLO) Gain = +12.5%
  • Vivo Cannabis (VIVO.TO) Loss = -74%
  • iShares Growth ETF Portfolio (XGRO.TO) Gain = +8.6%
  • Vanguard REIT ETF (VNQ) Loss = -1.8%
  • US & Intl Equity Index (mutual funds) Gain = +7.3%
I have taken the opportunity to clean up my portfolio a bit and get rid of the shitcos that I had littering with the cannabis stocks (XLY & VIVO).
For the record, I am still incredibly bullish about the long term prospects of Alphabet (GOOGL), Ferrari (RACE), S&P Global (SPGI) & Twilio (TWLO) and intend to go long again with a higher margin of safety.
I am still in a net long portfolio. After these sales, I am now sitting on 25% in cash, with a heavy tilt towards gold and utilities. Bonds make approx 10-12% of our overall portfolio, which has been cushioning the blow.

Full Disclosure: Our full list of holdings is available here.

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