$SYF $BK $PCG $SQQQ … Responsible Investor Portfolio Update, June 6th 2020

I started a new portfolio on May 25th, it is up 5,3% since then. That’s in 10 trading days, actually less considering public holidays over this period.

I have sent out 8 buy alerts so far, the intention is to have 30-40 open positions when fully invested. It mightn’t be until a few weeks that we will have a complete and balanced portfolio. At the moment the positions are too few for it to be sufficiently resilient and diversified. Overall it has 7 long positions (13%), 1 hedge position (2%) and 85% in cash.

I expect the positions to be centered around the American and European stock markets. In Europe the focus will be on Denmark, Italy, France and Germany as I follow them more regularly and understand their markets better.

With the passage of time, I will send sell alerts too, and might send accumulate/reduce alerts.

Here are all the positions, the performance for each one (dividends excluded) and the overall performance of the portfolio.

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$PCG rising from the ashes

You will remember the wild fires which severely hit Northern California back in 2018. As a result of this natural disaster, PG&E Corporation (ticker: $PCG ), a large utility company operating in Northern California with electricity and gas, had to file for bankruptcy and the stock price tanked. Well, this bankruptcy is different than your average one and $PCG is now seeing the light at the end of the tunnel. Time will tell if their plan will pan out but for investors this may be a profitable trade.

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I sent a Buy Alert on May 27th and the stock has shot up 9.37% since then: nice start ! In that alert I have indicated a Stop Loss (SL) of 9.5$ (corresponding to a 14% loss from my buy price of 10.88$) and a Target Price (TP) of 15.5$ (corresponding to a 43 % gain). These are my SL and TP values, based on my risk profile: you should assess what your own risk profile is and determine how tight a leash you want to keep.

I also warned that this is a trade, implying an opportunity based on technical analysis and/or momentum, not an investment. A lot will depend on the decision of the bankruptcy judge which is inherently affected by a certain degree of unpredictability. Utility companies do not tend to be cyclical as people always need to buy electricity and gas, also in times of crisis or a pandemic (though large companies will have reduced their consumption, albeit temporarily), which means that cash continues to pour in. But these large companies tend to be under the radar of politicians: if the wind blows in their favour, the future will look brighter for $PCG ; conversely, if regulators get in their way, further moves to the downside may be experienced by the stock.

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I currently own another utility, Italian-headquartered $ENEL.MI . My portfolio also has spicier stocks, like $RACE and $VIAV . If you wish to see the long and short positions in my eToro portfolio, please follow this link.

Enjoy the weekend and invest responsibly !