Finance is a subject that is a subject that benefits from mutual collaboration and transparency of ideas. So here is a quick rundown of what I am and a little bit about why I own it.
Back in November of 2018 as the market drifted lower, I decided to realize all of my gains/losses that I accumulated since I stared investing in 2015 to take advantage of the last year I’d have 0% long-term capital gains. It was over $18,000 of income tax free, which was pretty significant at my age. Since then I have started fresh and this portfolio represents everything I have bought since then. That was a pretty risky bet, but I do not regret it so far.
I am currently 105% invested, (using 5% margin) and have my accounts spread between Robinhood and an IRA at Charles Schwab. I try to put my safer and high dividend paying investments in my IRA for tax advantages. In an IRA I don’t have to pay taxes on dividend income but on the flip side I cannot tax loss harvest losers, so I buy riskier investments in my taxable accounts. My current portfolio represents my high risk tolerance for my person savings and willingness to be (extremely) concentrated.
Ill have more to say about each of these positions in future posts:
(45%) Bitcoin (BTC)
Cost basis: 6,700; Current Price: 9,200; Gain/loss: +48%; Frist bought 12/20/18
This large of a position may come as a surprise. I don’t consider myself to be much of a crypto zealot, however it appears Bitcoin is entering another bull market. I think the best argument for Bitcoin is that IF Bitcoin is digital gold and gold is currently worth 7.5 Trillion (which is HUGE) and Bitcoin is currently worth 158 Billion if that premises is even 10% true Bitcoin could be a 5 bagger from here. I also like that Bitcoin is not generally correlated with the US market. I started building a small position at around 4,000 and have since made some pretty big bets. I have traded the position a little bit with some limit orders and have sold and bought back for cheaper up to its recent high of 9,000. As long as interest in bitcoin continues to rise, I want to be in it. I expect a slower and more healthy run up than the 2017 bubble, and may continue to take some risk off the table if it continues to rise.
(25%) Adient (ADNT)
Cost Basis: 13.39; Current Price 21.44; Gain Loss +60%; First Bought 3/20/19
Adient is a very concentrated equity position. Here is the general thesis:
After getting spun off, facing manufacturing struggles, coming under new management, and recently cutting their dividend Adient, a car seat manufacturer that operates in an oligopoly has seen their stock drop from 85 to 12 in the past year. Companies cutting dividends have traditionally been an event some value investors look for, due to the "forced selling" nature of the transaction. In this case it looks like you already had something that was cheap, and got even cheaper after falling 25% on the dividend cut announcement. Dividends are not always a good capital allocation strategy, so I don't mind the new CEO taking the dividend expectation off the board while he tries the turn the company around.
The Stock is traded down to about 3X earnings and .5 book value and I pounced with a large position. If the new CEO, an industry veteran, is able to turnaround the company, this is a multibagger.
(4.5%) Gamestop (GME)
Cost Basis: 5.00; Current Price 5.75; Gain/Loss; +15%; First Bought: 06/17/19
Lot more research to do here, and it may end up turning into a trade. After cutting its dividend and turning over CEOs Gamestop continued to hit lows bottoming out at a little under $5. I seem to have caught it at a decent time as it is already up 15% on me. I didn’t see how the news could get any worse and initiated a position with the intent to do more research and monitor the actions of the new CEO.
(3.9%) Litecoin (LTC)
Cost Basis: 62.1; Current Price; 134; Gain/Loss +115%; First Bought; 12/20/18
(3.7%) Ethereum (ETH)
Cost Basis: 138; Current Price 265; Gain Loss/ + 78.7%; First Bought 12/20/18
I don’t dabble in “altcoins” but ETH and LTC are legit projects with slightly different utility than Bitcoin.
(3.5%) Oaktree Capital (OAK)
Cost Basis: 41.4; Current Price 49.5; Gain/Loss +19.6%; First Bought: 12/14/18
Oaktree stock had gone sideways for a long time when I bought it. I liked the dividend yield and thought it was a good stock to stash in my IRA. I liked the idea of buying Howard Marks at this time in the cycle. The stock received a nice boost when Brookfield Asset Management took a sizeable position in the company.
(3.3%) Altria (MO)
Cost Basis: 45.8; Current Price: 50.12; Gain/Loss +9.4%; Frist Bought: 1/29/19
Altria is the best preforming stock of all time, with a competent management team that will continue to deliver shareholder value.
(2.8%) Despegar (DESP)
Cost Basis: 13.47; Current Price: 13.58; Gain/Loss +.08%; First Bought: 6/13/19
New position. Promising South American travel company that I’ve had my eye on for awhile. Dorsey Asset Management entered this quarter so I decided to follow them into the position.
(2.7%) Howard Hughes Corp (HHC)
Cost Basis: 102.2; Current Price 102.4; Gain/Loss +.02; First Bought: 12/14/18
REIT with unique assets, that may have led to mispricing, good shareholder yield stock for IRA.
(2.3%) Prestige Brands Holdings (PBH)
Cost Basis: 30.17; Current Price; 30.08; Gain/Loss -.03%; First Bought: 5/7/19
Levered small cap with good cash flow with boring but inelastic brands.
(2.2%) Easyjet (ESYJY)
Cost Basis: 11.9; Current Price 11.2; Gain/Loss -5.9%; First Bought: 6/13/19
Low cost European Airline trading at an attractive valuation IMO.
Total Portfolio Return: 41%