Square (SQ): Profit-Taking

Square (SQ) took off once again this week, making new all-time highs and exceeding the target allocation for the portfolio even though I just increased it to 7.14% last week.

Thanks to the amazing success of this stock, a sale order I had in place filled on Wednesday at $182.50 locked in +1,544.14% in profits on some of the original position I bought for $11.10 way back on August 5, 2016. Square’s current performance makes it the all-time winner in my Investments in Play, valued at  +15% more in profits (both taken and left in the position) over the lifetime of the portfolio than my second place lifetime profit driver, Boeing (BA). Yes, Boeing is still my second place profit driver even down nearly -50% Year-to-Date (that’s how huge BA was to the lifetime success of this portfolio). 

In fact, I have taken so many profits out of Square that if it went bankrupt tomorrow, I’d still have quadrupled (4X) my original investment in this position assuming I didn’t put additional capital to work on the way down. Conversely, this is where Boeing takes the lead as I’ve taken more profits out of the position than are left in the position when compared to Square:  if Boeing went bankrupt tomorrow, I’d still have quintupled (5X) my original investment!

My BA and SQ positions serve as ongoing reminders of the vital importance of Selling in Stages – take profits when you can in order to protect against the potential of incredibly negative news catalysts.

I do believe in the long-term potential of Square (SQ) which is why I still allocate a full position to it in my portfolio. However, the short-term could be challenging as small businesses (Square’s bread-and-butter customers) may go bankrupt without significant stimulus and damage Square’s revenue potential.

My next sell price for SQ is $211.69 and my next buy target is $125.70.

SQ closed the week at $187.28, up +2.62% from where I sold Wednesday.