Grow Generation (GRWG)

Grow Generation (GRWG) is a newcomer to the portfolio this week, thanks in no small part to the -19.01% pullback it suffered since making new all-time highs last week.

Don’t feel too bad, though, this consumer cannabis play is still up more than 300% Year-to-Date (YTD) even if it is the Biggest Loser of the week.

What is the Super-Speculative Basket?

The Super Speculative Basket (“Super-Spec”) is made up of a handful of stocks so incredibly volatile that I’m uncomfortable giving any of them full allocations even in my Speculation in Play portfolio, instead dividing a single allocation among all of them.

Currently, my Super-Spec stocks are as follows: the Airlines ETF (JETS), Carnival Cruise Lines (CCL), and Virgin Galactic (SPCE). They are listed as a single allocation in the portfolio breakdown chart each week. 

Airlines ETF (JETS): Added to Position

After sitting idly on my hands for the past few months since taking all of the capital out of my Airlines ETF (JETS) position, I decided to nibble my way back in when JETS dropped on Wednesday, triggering a buy order which filled at $16.44.

The order replaces a few shares I sold on June 8 for $21.17, locking in a 22.34% discount but making my per-share cost now $4.64 as I once again invest capital into this position. My next price target to add to the position is $14.10, a past point of support. My next sell target is $21.75, near JETS’ June high.

JETS closed the week at $16.92, up +2.92% from where I added Wednesday.

Chevron (CVX): Added to Position

The entire energy sector has been getting slammed the entire year, and the increase in coronavirus cases globally certainly hasn’t made anything easier for the industry. On Tuesday, further weakness caused Chevron (CVX) to dip below $70.00 a share once again, triggering a buy order I had in place which filled at $69.87.

The buy replaces some shares I sold back on April 23 for $87.85, locking in a discount of 20.47% on their replacement. While the buy order also raised my per-share cost by +9.38% from $54.29 to $59.38, with Chevron yielding 7.39% at this price point, paying out $5.16 per share annually, there are worse places to park my funds.

My next buy target is near the March lows at $51.90 with my next sell target near its recent high off of the March bounce at $103.45.

CVX closed the week at $69.50, down -0.53% from where I added Tuesday.

Grow Generation (GRWG): *New Position*

Consumer cannabis plays haven’t been good for my Speculation in Play portfolio. Last year, the decimation of the space led to my speculative portfolio only gaining +5.91% for the year when the S&P 500 gained +29.24%.

Talk about underperformance!

That being said, with the potential of more states legalizing recreational marijuana use to make up for budget shortfalls (and also a Federal legalization possibility), I want to get some exposure to the space again. However, I don’t want to buy back into Canopy Growth Corporation (CGC), the Best-of-Breed consumer cannabis play, since I already hold it in my Investments in Play portfolio.

Instead, I decided to buy the supplier of the “picks-and-shovels” (a spin on the companies that made the most money during the California Gold Rush – the suppliers to the miners, not the miners themselves), Grow Generation (GRWG).

GRWG quite literally is the supplier to the space, providing all the equipment an ambitious “farmer” will need to grow… whatever… inside rather than outside, including grow lights, irrigation systems, hydroponic setups, specialized fertilizer, and much, much more.

When the markets sold off once again on Friday, I opened a small position in the space at $16.04. GRWG is up more than +275% year-to-date and is notoriously volatile, having dropped more than 25% in just a week since last Friday’s highs! My next price target to add more is $13.80, slightly above a past point of support.

GRWG closed the week at $16.70, up +4.15% from where I added Friday.

Plug Power (PLUG): *New Position*

I’ve been wanting exposure to the Electric Vehicle (EV) space in my Speculative Portfolio for some time, however, I didn’t want to add Tesla (TSLA), the only EV maker I’d invest in, since I already hold it in my Investments in Play portfolio.

Like Grow Generation (GROW) above, I opted for the “picks-and-shovels” play with Plug Power because PLUG builds and supplies the hydrogen fuel cells that will make long-haul trucking a reality. The company, up more than 300% this year alone, already supplies fuel cells for smaller vehicles like forklifts used by retail behemoths Amazon (AMZN) and Wal-Mart (WMT).

Given its volatility and its already high-flying nature, I’m stepping into this position slowly, nibbling just over 0.5% of a 9.09% total allocation when PLUG sold off with the rest of the market on Friday with my initial buy order filling at $14.28. My next buy target is $12.40, slightly above a key Fibonacci Retracement support.

PLUG closed the week at $14.00, down -0.99% from where I added Friday.

SPY Put Spread Insurance: Position Closed +0.83%

To protect against potential downside volatility approaching the election, I’ve been holding 335-330 SPY Put Spreads expiring next Friday, November 6. While the intent was to capitalize from a potential a selloff going into and after the election, when the S&P 500 sold off more than -3% on Wednesday, my put spreads, down more than -60% last week (and down a whopping -89.95% back on October 9), actually jumped through my break-even point and reached profitability.

When the markets started to bounce on Thursday, I opted to close the spreads near their break-even value rather than risk positive earnings reports from the monstrous four Big Tech companies all coming Thursday after the close from Alphabet (GOOG) Amazon (AMZN), Apple (AAPL), and Facebook (FB). Positive reports could have potentially caused a bigger bounce in the market into Friday and render the put spreads worthless, even given the potential volatility following next week’s elections.

Accordingly, I locked in a tiny profit on my put spreads of +0.83% and closed out on Thursday to protect my capital and fight another day.

Earnings ended up being mixed with Alphabet blowing away expectations, Apple missing on iPhone sales, Facebook losing users in the U.S., and Amazon warning shopping capacity may be tight during the holiday season.

The result?

With the poor earnings from 3 of the 4 big tech companies, the markets returned to selling off on Friday which would have increased my put spreads in value from where I sold on Thursday. That being said, I’m content with the decision I made as my rolled-over puts regained $1.50 per spread in value ($150 per contract as options are sold in lots of 100) from their October 9 lows.