I’ve been saying I should separate my “blog” of my trades from the general stocks thread for a while, so I’ll go ahead and do it now… Creating this thread to have them moved into. I started this back on the old site on February 4, 2022. The main point of posting all of my trades was to document my attempt, get pushback from knowledgeable posters and learn from it (or strengthen my own arguments/process), possibly be dissuaded from potential mistakes (definitely happened once with PSEC), and if I proved a good track record provide some +EV stock tips.
So far, I’m up around 65% total - but until two weeks ago I was about 30-40% in cash at all times, so my investments are actually up around 98% (rough estimate). The S&P with dividends reinvested is up about 19% in that stretch. So far, so good, and we might be starting to get towards a meaningful sample size - I’ve had positions in 45 to 50 stocks at this point. The ones losing to the market are in single digits, and most of those are fairly recent open positions that I’m still expecting to win on.
I’ll at least move over the posts about the Japanese market, as that’s a pretty big turning point - I’m now > 95% in equities and up to 24 different stocks, so this is about as aggressive and active as I’ll ever be. I guess the simple way to put it is that I’m now pretty confident I’m beating the market long-term, pretty confident in my strategies even in a downturn, and thus going “all-in” on my strategy.
I have questions, but not sure how personal you want to get.
Are these investments meant to be your retirement fund? Or is this extra money you’re playing with outside of retirement savings?
Are they in a tax advantaged account like a 401k or Roth? Or are you paying taxes on any capital gains and dividends?
As a way to ask how much money you’re playing with here without getting into exact numbers. What multiple of your average yearly income is in play here?
Sold a chunk of my PKX position to bring it back down to 5% of my portfolio. It’s having a monster week, and up something like 135% to 140% for me overall. Well out of value territory based on the current financials, going to review their battery business when I get time and decide if I want to stay in or hunt for other value to put into the portfolio.
Also pretty happy to see it appears the ATVI/MSFT merger will go through, so that position will pay off. Could also exit it early if I find a better place to put the money. Going to be tough to do full research right now while traveling, but I’ll try to do a little tonight.
Sold at $23.34. They’re merging with DISH, same billionaire near-majority owner of both. One of my concerns was him fucking shareholders over with a merger because he had a bigger position in DISH than SATS. Of course in that event, we would still get a win. Looks like that’s what’s happening. I’ll re-eval the new combined balance sheet tonight and decide whether to re-enter but not going to keep the exposure til I do another deep dive.
So I’ll have to dig in a little more, but it appears QIWI will remain listed on the NASDAQ and divest from Russia in order to try to get removed from the companies listed under the sanctions. At the current exchange rate it’d be about $3.25 a share, so that’d be a 45% rebate if I sold. But who knows how the market views that exchange rate, or how it views the stock once divested.
I did hedge it off into a profit even if it goes to zero, by buying WEAT. But I’ve been hoping to get something back off the initial investment. If they’re truly divested from Russia, it may end up being a buy or hold, too.
Gonna be a pass, so that position is over. Annoying, similar to the IBA play - nice profit and beat the market, but the merger screwed the shareholders much like the private takeover ov IBA screwed us.
Both were possibilities I saw when entering the positions, though, and both still beat the market nicely, so it’s all in the game, I suppose.
Since I’ve started the value investing (2/4/22), my value picks are up somewhere in the 50% to 55% range (I’ve made contributions to the accounts since then so I am ballparking it instead of doing the math). The S&P is up about 2% including dividends since then. I’m still not 100% stocks in those retirement accounts, and of course it’s a small sample, but given those returns I probably should be.
I get the temptation to just take 5.05%, but that’s another form of trying to time the market. Over the long run you’re going to do better investing it, but of course if the time frame of when you expect to spend the money is shorter, different story.
Moved ~all the dry powder in my IRAs into X between $31 and $32 today. I already had a position, and had valued it conservatively at $37 to $39 a share and planned to exit there. It came out that Cleveland Cliffs made public an offer to acquire them for about $34 a share approx half cash and half shares, then Esmark offered $35 for all public and outstanding shares in all cash. Both are competitors and know the industry and business well, and the leader of the Esmark offer is a former US Steel exec. So I think the offers are extremely unlikely to fall through, and now there’s the potential for a bidding war. Plus the name is now trending on Wall Street Bets so there’s the potential for them to do something stupid. They think Elon is going to get involved for the X ticker lol… I highly doubt that but he is obviously capable of doing stupid shit.
If it fell through it would likely drop to about $24 a share, so there’s a pretty reasonable margin of safety here. If it were just a single bid, I wouldn’t take this much risk for a 9-12% upside. But with the chance of a bidding war, and WSB getting involved, I think there is a small but not insignificant chance something crazy happens or the sale price ends up being like $40-50 a share. I think that’s more likely than it falling to $24 so I think this is great opportunity.
Definitely a bit uncomfortable with the size of the position relative to my portfolio and may throw a steel price hedge on tomorrow, especially since my PKX position is but I think this is the type of opportunity that’s worth piling into and taking some risk on.
Also after hours US Steel announced that these are not the only two offers.
ArcelorMittal has emerged as a third potential buyer, with CNBC reporting that they may have been the first to approach US Steel, and also that they’ve hired BOA to advise them on the potential bid. Some third party site that I don’t know much about, so grain of salt I guess, reports that the rumor is they’re weighing a $38 to $39 per share offer.
That’d be a pretty sweet return for the “all-in” move I made in the 24-26% range.
Esmark pulled out of the bid because the union is in the tank for Cleveland Cliffs, which makes them the only official offer on the table, so I bailed on the new X position. I’m down to my original allocation.
Yeah I remember when I was posting about picking stocks with a value investing strategy starting in February 2022. One of the big reasons was that I expected the stock market to either crash and then take several years to recover or trade sideways for several years and lose to inflation. So I didn’t want to be invested in the broad markets.
I was chided for that, but since then the S&P is up 0.02% (2.20% if you include dividends). Inflation since then has been running higher than that, obviously. I’m up ~50% since then, and that’s while being way less than 100% in stocks and not even getting interest on the dry powder I’ve been sitting on (but am finally working in).
High yield savings accounts and a variety of bonds all would have beaten an S&P investor over that time frame. The same could easily be true over the next couple years as well, and the liquidity allows one to pounce on good opportunities.
Basically millennials adult financial lives have been a series of black swans and unprecedented situations, and the current one we’re going through is a very weird tug of war between high/rising interest rates and a tight labor market that’s making things play out a lot differently than usual.
I’m not exactly timing the market, I’ve been 50% to 70% in equities over that time, largely based on the combination of what’s available to invest in that I think is profitable and how much time I have to run numbers and do research.
I’m basically saying I can beat the current market by picking stocks. It’s certainly not without risk, but I’m pretty confident I’m going to end up being able to beat the market over the long run. I think I’ve picked ~25 stocks and a maximum of three have failed to beat the S&P over the time I’ve held them.
I don’t have a big enough sample size yet to say I’m beating the market, but I’m on my way.
I’ve been documenting the vast majority of them on here and previously on UP, but if you think a separate thread is better, maybe I should do it. Can’t hurt, I guess. Can go back and show all the moves I’ve made in one place.
They’re not all created equal. The IBA one was a mortal fucking lock, I considered using the maximum leverage I had available to me (and probably should have done it). It was literally a bet against a natural disaster/act of God. In hindsight, bird flu ripping through their farms was for sure the vast majority of the risk there. Wish I’d bet more on that one.
ATVI was the riskiest, but I also feel like I ran pretty bad on that one and am still likely to prevail in the end. X was a good example of like a really good spot to get myself into, things falling apart on it, and still managing to get out without taking an L. And the downside risk there was pretty capped (20-25% drop).
ATVI was an exception, that was pure merger arb, but the other merger arb spots I’ve ended up in were because I bought the company as a value investment, understood the company reasonably well, and then when the merger happened I knew what a steal the buyers were getting.
Well the first thing is, I don’t have the right connections.
If I did, the hundred million dollar question would be how big could the AUM get before the strategy stopped working? One of the investments I posted this week has a $34M market cap. If I didn’t set a limit order, I would have moved the price of the stock putting a few thousand dollars into it. On the other hand, if I was running several hundred million in the right structure, I could have tried to buy the whole company or a big chunk of it and instead of waiting on someone else to do the things the business needs to do to unlock the value, I could have made them happen. Of course, buying 51% or 100% of a company isn’t as simple as setting a limit order and clicking buy.
The other thing is, running other people’s money, you really don’t get the benefit of the doubt for very long. Have one unlucky year to start and it’s probably a wrap. I think my strategy will beat the market over a big sample size. But over any 2-3 year stretch there’s going to be significant luck involved.
My strategy is laughably simple to get the list of possible investments down to 5 to 20 stocks each quarter. But then there’s a healthy dose of having a good bullshit detector and recognizing growth catalysts and opportunities, or recognizing spots where the market has priced in an event as a ~certainty when it’s just a probability.
A lot of it is also just tedious work that people don’t like to do. I mean, I always think of the scene in Big Short where the guy is like how do you know this and Burry is like, “I read them,” and the guy is like, “Nobody reads them!”
Sold HVT $31.55. Bought WSM $142.60. Bought WIRE $165.20.
HVT returned nicely for me, WSM is a better business at a similar discount. Sector could get beaten down here and I’ll gladly buy more WSM and could easily see myself holding it for a decade or more.
WIRE is a copper wire manufacturer trading at ~1.5 tan book. Benefitted a ton from inflation and so the market is pricing their earnings cratering. I think they come down somewhat, but long-term I love this business too. Benefits a ton from a shift to EVs and renewables, and there is a projected copper supply shortfall as demand skyrockets over the next 10 years or so. Similar to WSM this could get rocky short term, but it’s another business I’ll gladly buy more of in that case and hold onto for a while.