Stock Talk

After several uneventful months where I stood on the sidelines, I decided to make a fair number of decisions in July, even with all the trade-trash-talking going on. The big trigger for me I think was that it was becoming very clear that interest rates are going to track downward and that may put a floor on stock prices in the short to medium term. So I thought this would be a good time to build up some positions. I still think stock prices are overvalued and continue to have a short position, however we can’t fight the Fed. Maybe I decided to jump in because I haven’t done anything in the past few months and I was itching to put some more money to work? I’m not going to deny that emotions and a certain level of a Fear of Missing Out (FOMO) could be at play here. 

Decisions Taken

Added to position in iShares Long Term Bonds (Ticker: XLB)New Position: Bought shares in Vanguard Growth Asset Allocation ETF (Ticker: VGRO)

New Position: Bought shares in Alphabet (Ticker: GOOGL)

New Posiition: Bought shares in Amazon (Ticker: AMZN)

Bought more shares in iShares Pharmaceutical ETF (Ticker: XPH)

Bought more shares in JP Morgan and Goldman Sachs (Ticker: JPM and GS)

New Position: Bought shares in CVS Health (Ticker: CVS)

Bought more shares in iShares Germany ETF (Ticker: EWG)

Bought more shares in Vanguard Emerging Markets ETF (Ticker: VEE)

In this first of a 3 part series, I share the thought processes that went into my investment decisions I made over the summer. In this episode I walk through the decisions I made in June.

Investment Decisions Taken:

Opened position in iShares Long Term Bonds (Ticker: XLB)

Sold position in Electronic Arts (Ticker: EA) for 11.6 percent gain (net Forex)

With the Federal Reserve signalling that they intend to lower interest rates in the very near future, I thought I would do a quick mind map and scratch what the impact would be on the types of investment decisions I would make going forward.

For the second month this year, the only investment decision I made was…to make no decisions. I decided to stand pat. In this post I share my thought process that led me to decide to stand pat.

Like anything there are some things that we don’t like to do but have to do in order to get to the bigger goals we want to achieve. Sports offers some interesting strategies for success that port over quite nicely into the investing game. In this episode I share some insights on how what strategies we can adopt to allow us to stay in the investing game and improve our probabilities for success.

This episode is about how the game of basketball and specifically the strategies behind it can teach us a lot about investing as well. I was originally going to do this around March Madness time, but never got around to it, so the timing is great! The game of basketball is so much different than when I grew up. It’s all about 3 points shots and perimeter offensive strategies. In many ways, the investing world has evolved quite similarly with the shift more index, low cost strategies.

April saw the markets continue to melt-up and regain their losses from 2018. In a couple of cases I was able to lock in some nice gains and pick up some shares in areas that have actually been lagging the market surge. What’s even more pleasant is that the stocks and ETF’s involved below are one’s that I’ve held in the past and I think there are some takeaways we can get from it.  

Decisions Taken:

New Position: Bought shares in Cal Maine Foods (Ticker: CALM)

Bought more shares in iShares Pharma (Ticker: XPH)

Sold shares in Disney (Ticker: DIS) for 39 percent gain (net Forex)

Sold shares in Southern Copper Company (Ticker: SCCO) for 18.2 percent gain (net Forex)

In the last of my 5 part series where I dive into answering a fundamental question that factors into every investment decision we make, I look at the nebulous concept of valuation from a perspective that goes beyond simply buying stocks with some low valuation multiple or ratio. I also try to bring the various concepts discussed together to provide some kind of framework that we can takeaway and carry with us as we go forward and make investment decisions.

I continue on my deep dive into figuring out what drives stock prices by looking at the one metric the rules them all and factors into every investment decisions we make. There are numerous mechanical and technical methodologies and strategies that are available to us when evaluating investment opportunities. At the end of the day all that due diligence may go for naught when we bring in this important metric that drives stock prices.

For most people investing revolves around the application of rules. Buy stocks with P/E ratios below X and have Debt/Equity ratios below 0.5. Index investing is better than active strategies, which is better than value investing. The reality mechanical strategies work until they don’t. In the third of our five part series, I dig deep further to look beyond mechanical investing strategies and examine the importance of how tendencies, principles, and to a certain extent fate, play critical roles in the setting of stock prices and how we frame our investment decisions. I also look at how we react to what market does, can also be a critical factor to setting stock prices and what investing competencies we need to develop to manage these tendencies to make more successful investment decisions.