Risk Disclaimer

The positions in this portfolio are incredibly risky and extremely volatile.

No one at Get Irked is a professional financial adviser (or a doctor), so consult with your own financial adviser to see if any of these positions fit your risk profile (and stomach).

Silvergate Capital (SI)

If you watched my YouTube video last week, you would have heard me refer to newcomer Silvergate Capital (SI) as a “binary bet:” either it would release its 10-K with a plan for survival or it would declare bankruptcy.

Well, I didn’t quite expect the news so quick, but the answer was BANKRUPTCY!

Surprisingly, unlike its fellow bankrupt bank, Silicon Valley Bank (SIVB) this week, Silvergate was not halted and zeroed out by the FDIC so it kept trading. SI closed the week down a whopping -56.15% and I don’t think it’ll stop until it hits zero…

Introducing… Garbage Spec Basket + Recovery Adjust

The Garbage Spec Basket

In an effort to reduce the amount of exposure I hold to three particular positions plus to free up allocation to use in more speculative bets on the market, I’ve decided to combine two of my most speculative (and pretty crappy) positions into a single basket: Danimer Scientific (DNMR) and Virgin Galactic (SPCE).

Of course, I’m aptly naming this basket The Garbage Spec Basket, and that’s how these two will be reflected in the weekly allocation pie chart.

What this means is instead of each of the three getting its own allocation, the two will share a single allocation. This will help me reduce risk by not overexposing the position to any of the three individually.

Adjusting the Recovery Spec Basket

This week, I closed Las Vegas Sands (LVS) which held a spot in the Recovery Spec Basket. This seemed to be the perfect opportunity to replace LVS with Lyft (LYFT), another obvious recovery play. Additionally, this will substantially lower my risk exposure to Lyft by forcing it to share an allocation with two other positions.

What this means for the portfolio…

As a result of the above housekeeping, I have increased my target position allocation to 7.69% as there are now only 13 allocation positions  (thanks to the addition of this week’s Short ETFs basket and throwing Lyft in with the Recovery Spec) rather than the 15 positions I had last week.

Sure, it’s a weird, OCD bit of housekeeping that I’m doing, but it helps me with risk management, which is the top priority in any portfolio, but particularly in one as speculative in nature as Speculation in Play. 

Las Vegas Sands (LVS): *Closed Position: +56.55%*

I know one of my key rules is to “Buy on Red Days and Sell on Green Days,” however, Las Vegas Sands (LVS) has been finding a lot of resistance around $60.00 and has been a truly profitable position, so, given the weakness in the markets, I decided to use a stop-loss limit order to close the position if it lost key support, which it did on Friday.

My closing order went through at $55.13 on Friday, closing out the entire position and leaving me with a lifetime gain of +56.55% since opening the position in August 2021, an annualized gain of +37.70% which is pretty spectacular given the market conditions over that time.

LVS closed the week at $56.21, up +1.96% from where I closed my position.

Proshares Ultrashort QQQ (QID): *New Position*

As I mentioned in last week’s video, I’ve decided not to use options to express my bearish short positions anymore since the expiration date seems to be my biggest hurdle in making accurate bets (before the time expires, at least). Accordingly, I’m going to use leveraged inverse Exchange Traded Funds (ETFs), instead.

An inverse ETF does the opposite of whatever the underlying asset does. In the case of the Proshares Ultrashort QQQ (QID) – they love their crazy names, am I right? –  it inverses the QQQ, the ETF that tracks the NASDAQ index.

However, not only does it do the opposite of the QQQ, the QID is leveraged which means any move is magnified.. in this case, roughly three times. So, if QQQ sells off -1%, that means QID will see roughly a +3% gain. However, if QQQ rallies +1%, that means QID will see a roughly -3% loss.

To make matters worse, since the management fees are higher and the costs associated with shorting assets must be incorporated into ETFs, these ETFs will degrade over time regardless of what happens to the underlying asset.

In other words, leveraged ETFs are seriously risky. Accordingly, the two short ETFs I added this week – QID and SPXU (see below) – will share a single allocation rather than each having its own.

Additionally, it’s imperative to remember that these are not “buy-and-hold” assets. These are assets that I buy when I’m feeling bearish and then sell when I’ve either made a profit or no longer feel bearish about the underlying.

I opened my QID position shortly before Fed Chair Jerome Powell’s testimony on Tuesday with an initial buy at $20.20. From here, my next buy target is $19.45, just off QID’s lows from last week, and my first profit-taking target is $24.25, a little over 10% higher than my initial buy.

QID closed the week at $21.92, up +8.51% from where I opened my position.

Proshares Short S&P 500 (SPXU): *New Position*

Just like QID above, the Proshares UltraPro Short S&P 500 (SPXU) inverses the SPY, the ETF that tracks the S&P 500 index. Also, just like QID, SPXU is triple-leveraged.

I opened my SPXU position on Thursday as I believe the Friday jobs report may come in hotter than expected and scare the markets with an initial buy at $14.75. From here, my next buy target is $14.00, just off SPXU’s lows from last week, and my first profit-taking target is $18.45, a little under past resistance.

Once again, these are not “buy-and-hold” assets. These are trading vehicles only.

SPXU closed the week at $16.40, up +11.19% from where I opened my position.

Silvergate Holdings (SI): Declared Bankruptcy!!!

Remember how last week I said, “Silvergate Holdings may go bankrupt?”

Well, on Wednesday evening, CNBC reported that Silvergate Holdings (SI) announced that it would be liquidating all of its holdings and shutting its doors. Obviously, this is the absolute worst-case scenario for any stock you might hold.

Okay, what did Irk do next?

Believe it or not, I actually have a rule for this exact situation: financial irregularities equals “sell!” Typically, that rule refers to companies having errors in their quarterly reports, but nothing says “financial irregularity” more than “we’re closing our doors forever,” am I right?

At this point, there’s very little question that the equity will be zeroed out during bankruptcy, so while some might want to try to play the stock for bounces or even a possible recovery, this isn’t Hertz in 2020 where the company actually recovered from bankruptcy without zeroing out the stock, there is basically no chance Silvergate survives.

During after-hours trading, I liquidated the entire position for an average price of $3.25, locking in a position loss of -55.14%. However, thanks to my risk management discipline, that epic loss only dinged the portfolio to the tune of -0.49%, so I count myself for getting out with anything at all.

SI closed the week at $2.52, down -22.46% from where I closed it on Wednesday.