Tag: Responsible Investor

Beating the #market

Another week in red has gone by, with the three major US stock market indices losing between 1.7 and 2.6%.

Perhaps the most significant development, however, relates to the price of #oil which has finally seen a spike from the lows of the beginning of the week. This is thanks to the expectation that the major producers may soon agree to cut production which should better align supply with the reduced demand. I have tried to play this with a very short term trade but didn’t actually succeed as I sold my $USO position too quickly with a marginal loss. It has taught me another lesson about how pointless short term trades can be, at least for me, as I am fundamentally a long term investor. Always invest in what you understand ! I did however benefit from a 12% gain in my Occidental (ticker $OXY ) position.

This week I have started a new long position in ConAgra Foods (ticker is $CAG ): I don’t expect it to work wonders, as it is a value stock, but to actually provide a single to low teens return within the next year or so and therefore some stability to my portfolio. I have bought it on Tuesday and have already achieved a 4.28% gain. It also pays a 2.8% dividend and the next quarterly ex-dividend date is expected in late April. I felt the timing was right as they have increased their guidance and now see FY20 adjusted EPS earnings per share above the high end of $2 to $2.07.

A similar investment made earlier in March is in General Mills (ticker is $GIS ) which this week has gained 9.4% !

Here is a simple graph created with Yahoo Finance to compare these two stocks with the three major US indices for this past week. How did your portfolio fare compared to them?

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I currently have 14 long positions in my eToro portfolio and 9 out of 14 have beaten the US market this past week. Ultimately, beating the market is the most important goal.

Be an active investor and invest responsibly.

Have a great weekend, all !

Has the #market bottomed ?

If anyone claims to have the answer to this question, they really don’t know what they are saying because the truth is nobody knows. So the best thing to do is to objectively assess what is going on, to invest responsibly and be patient.

This past week has been another rollercoaster with the US markets rallying more than 13% as you can see from the $SPY (an ETF which reproduces the SP500 index), however the #volatility has not moved much, with a weekly reduction of just over 1% (see $VXX the ETF which reproduces the VIX). This means that it is too early to call the bottom in my opinion.

SPY

All investors who are predominantly long are obviously pleased to see this week’s jump, don’t get me wrong, but there are many examples of rallies which have followed large drops. Look at what happened during the 2008 crisis for example, there were 6 positive jumps between +9 and +19% on the way down. Before the market finally bottomed in Q1 2009 the volatility was greater than 30.

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So what can investors do in the meantime ? Be patient and take one day at a time. As I have a long term horizon and the market has already dropped a lot, I did do some nibbling this past week, focusing on dividend payers with a good valuation such as $BMY, but I still have a large cash position overall as I don’t reckon it is time to go all in yet.

I have also increased my hedges, by upping my position on a double inverse SP500 by 50%. One might ask, why enter or increase a long position on a stock while at the same time increasing a short position ? The answer lies in the time horizon, once again. I invest long when there is upside potential in the long term (most of the times), whereas I introduce hedges when markets are volatile, therefore in the short term. If there is another drop next week, my loss will be reduced; if it goes up again, I will gain less but hedges are typically a smaller percentage of one’s portfolio so the loss is limited. In fact, I wish I could always lose on my hedges !!!

If you are interested in seeing what additional stocks I might get long on when the conditions are right, please keep reading my weekend updates !

Stay safe everyone and invest responsibly.

 

The much talked about #earnings of #Google and #Facebook in two great infographics | #ActiveInvesting

Featured stock of the week: #Solaredge ($SEDG)

Israel-based Solaredge ($SEDG) designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations.

The stock has shown its strength yesterday with a price increase in excess of 3% when most of the market was in red.

Its performance over the last year has been exceptional, with a peak of more than 200% and a current year-on-year capital appreciation of 148%. With this week’s move the stock is now trading above its 200 days moving average.

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But the stock is not only about momentum as it still sports an attractive valuation with PEG (5 years expected) of 0,82.

Solaredge is benefitting from its digital technology in a sector still dominated by analogue devices.

Whether it is due to favorable regulation, like the recent one dictating that in California all new houses should be equipped with PV panels, or simply because switching to solar “makes perfect economic sense” to use the words of Tony Seba, Solaredge seems well positioned from riding the long wave of solar energy.

This stock is also an example of a way of investing in a company that enables the transition towards more sustainable energy resources.