🔥Weekly Portfolio Update 03.05.21🔥
Weekly Performance, Key Events in The Portfolio, What to Read This Week and More!
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📮Portfolio Weekly Performance Report
◆ Key Events in The Portfolio
New Speculative Trades - Spotify
As mentioned in one of my previous posts, I had allocated 5-10% of my portfolio to short term, speculative bets on a few stocks that have great momentum in the past few weeks or months. With no plan to hold on to these stocks for a long period of time, I had sold Okta and Square with gains of 22.89% and 9.27$, respectively. The whole idea of this strategy is to give us a safe space to speculate on certain stocks without exposing the portfolio to too much volatilities, which is why none of these speculative stocks occupied great proportions of my portfolio.
After closing my positions on Okta and Square, I had bought Spotify at a dip after it tumbled -11.26% from a week ago. The stock had pulled back significantly after its disappointing Q1 2021 earnings report, which pointed towards slower growth and weaker guidance than expected. There is a reason why I would never invest in Spotify long term. With today’s valuation, the company has to be able to add much more users than it did in the past quarter and with the world slowly heads into the post-pandemic era, some would think fewer people would be able to consume as much digital audio contents at home as more people return to work. Regardless, I do believe the stock will rebound from its dip, and we should be able to enjoy a decent price hike before it hit its peak again.
Biggest Monthly Gain Since November 2020
Thanks to the tech rally around the start of last month, our portfolio had closed at a spectacular gain of 5.44% in April, which also beat the S&P500. This is the biggest monthly gain since November 2020, when the portfolio rose by 9.45% as the market recovered from great vaccine news back then.
Quick Look into Tech Sectors
The Big Tech had always been perceived to be mostly overvalued in this day and age, especially after their astronomical surge in stock prices in 2020. Although our portfolio had been heavily weighted in the technology sectors, most of them had reported great growth in revenue and free cash flow in the recent Q1 2021 earning reports, which definitely helped a lot of the tech stocks to catch up to their sky-high valuations. I am about to share my quick analysis of 5 of the most prominent American technology stocks, famously known as the FAANG stocks, in the next article which will come out tomorrow. Remember to subscribe to the email list to make sure you don’t miss it!
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📖 Recap of the week
Berkshire Hathaway Annual Meeting 2021
Berkshire Hathaway Annual Shareholder’s Meeting is a major annual event that attracts many value investors to attend, especially the fans of Warren Buffett and his business partner Charlie Munger. This year, Warren Buffett had highlighted his predictions that inflation would rapidly pick up in a way that America has not experienced for over a decade. Mr Buffett thinks that the overall economy is currently in good shape thanks to the tremendous work by the US Federal Reserve in propping up the economy and keeping interest rates low. However, he also warned that it was hard to predict the future consequences of the generous stimulus plan from the central bank.
While Mr Buffett declined to offer a direct answer to questions about Bitcoin, Mr Munger criticised bitcoins as “a currency that’s so useful kidnappers and extortionists”. However, Mr Buffett did point out that special purpose acquisition companies(SPACs), which have become a hugely popular means for firms to go public over the past year, are similar to a 'gambling-type market' and unlikely to be a great investment.
As mentioned in the past, Mr Buffett had once again embraced the idea of investing in the S&P 500 index fund over the long run rather than picking individual stocks, even including Berkshire Hathaway.
"I recommend the S&P 500 index fund … I’ve never recommended Berkshire to anybody because I don’t want people to buy it because they think I’m tipping them into something," "On my death there's a fund for my then-widow and 90% will go into an S&P 500 index fund." - Warren Buffett
Read more for more highlights about the Berkshire Hathaway Annual Meeting.
Twitter Tanked 15% On Disappointing Earnings
Twitter ($TWTR) had tumbled as much as 15% after reporting its Q1 2021 earnings report last Friday. The company reported an expectation-beating revenue which surged year-over-year by 28.8% to $1.04 billion, which beats Wall Street’s forecast by $10 million. Its Non-GAAP EPS at $0.16 also beat the consensus estimate by $0.02.
As good as that sounds, however, its monetizable daily active users (mDAU), which gauge its user engagement, was recorded at 199 million, which was below the consensus estimate of 200 million. The company forecasted its mDaU growth to slow to double digits for the remainder of 2021, with Q2 being the possible lowest point. On top of that, it also reported a disappointing revenue projection for the next quarter, which is now anticipated to be in the $980 million to $1.08 billion range. Consensus had $1.05 billion.
As the stock plunged sharply after last Friday, it presents a great buying opportunity to investors who count on the company to be able to reaccelerate its growth for the next quarter and beyond.
🐦 Tweets to start the week
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Best, HaoNing