May 31, 2019 

Portfolio Allocation

Current Position Performance

Highlights from the Week

Biggest Winner: AMD (AMD)

After announcing new processors at Computex that might knock the stuffing out of Intel’s (INTC) lineup, AMD regained its prominence, gaining +3.67% for the week to become this week’s Weekly Winner.

If it weren’t for the epic selloff due to trade war and economy concerns, we would expect AMD to test its previous highs in the mid-$30s but current conditions will likely hold the stock back until things on the macro clear up.

Biggest Loser: Nio (NIO)

What worse than being a stock with Chinese or Electric Vehicle exposure? HOW ABOUT BOTH AT THE SAME TIME!

Nio (NIO), China’s Tesla (TSLA) got destroyed this week, dropping another -nearly 21% over the week, halving its YTD value with no end in sight for the pounding this stock is getting. YOWTCH!

This Week’s Trades

AMD (AMD): Added to Position

Although AMD’s price was much higher than our $16.89 per-share cost basis, we added to AMD during Wednesday’s market sell-off at $27.87, consequently raising our per-share cost to $19.63.

We rarely add to a position at prices higher than our cost basis, however AMD released news of their upcoming Ryzen CPU release which, for the first time in years, not only matches equivalent Intel (INTC) processors’ performance, but actually beats them.

This new architecture signals a true possibility for AMD to take significant marketshare from Intel, something that hasn’t happened since the original Athlon XP processors back in the early 2000s.

Our next price target is much lower at $20.41 to protect against potential market downside risk which has been epic this week.

AMD closed the week at $27.41, down -1.65% from our Wednesday buy.

BiliBili (BILI): Added to Position

BiliBili (BILI) pushed lower during Friday’s selloff, trigger a buy order we had in place at $13.64 and dropping our per-share cost to $16.15. We’re adding to this position slowly due to its Chinese exposure with our next buy target much lower at $12.14.

BILI closed the week at $13.50, down -1.03% from our buy on Friday.

Canopy Growth Corp (CGC): Added to Position

Canopy Growth Corp (CGC) took a dive during Wednesday’s market selloff, triggering a buy order we had in place at $44.00 to increase our position size. Unfortunately, the selloff hit harder than anticipated, sending CGC down to the low $42s.

Our next buy target is currently $38.55 with additional buy targets much lower at $35.39, $31.01 and $25.55.

CGC closed the week at $40.26, down -8.50% from our buy on Wednesday.

Iridium Communications (IRDM): Added to Position

Just like everything else, Iridium Communications (IRDM) slid during Friday’s selloff, trigger a buy order we had in place at $21.78, lowering our per-share cost to $24.75 from $25.50.

IRDM closed the week lower at $21.43, down -1.61% from Friday’s buy.

Nio (NIO): Added to Position

Nio (NIO) continued to get slammed during the marketwide selloff, trigger a buy order at $3.68 on Wednesday followed by another buy at $3.23 on Thursday, lowering our per-share cost to $4.89, more than 50% higher from these levels.

To compound the issue, Nio gave a poor earnings report, pointing to slowing demand similar to what Tesla (TSLA) is experiencing in the U.S. This position is not Buying in Stages, but Catching A Falling Knife and demonstrates why the latter is not effective.

Buying in Stages is only effective when marketwide concerns are causing a selloff in all stocks. When companies have questionable fundamentals, such as Nio, no additional buy orders should be placed until the stock finds support and, a catalyst for a reversal in the stock’s trajectory is determined.

We have made many mistakes with our Nio position and it serves as a learning experience as well as proof of the rule to only allocating small amounts to speculative positions. Although Nio represents 4.07% of our speculative portfolio, it is only 0.218% of our entire investment portfolio which includes both our positions in our Trades in Play as well as our Investments in Play portfolio.

Still, we’d prefer Nio not go to zero, although only time will tell on this one. We won’t be adding to this position until there’s a positive catalyst or significant good news of some kind.

Nio closed the week at $3.05, down -5.57% from Thursday’s buy order.

Yeti (YETI): Added to Position

Friday’s selloff left almost no stock unharmed, tearing down Yeti (YETI) to cross through our buy order at $24.57, which raised our per-share price to $21.60 from $20.61. Our next buy order is under our per-share cost at $19.95.

YETI closed the week lower at $23.92, down -2.65% from Friday’s buy.

Questions?

As always, If you have questions about how we’re playing different positions or anything at all, really, feel free to leave a comment below!