Hi everyone, I bought a little bit more BABA at just under 85 last week. The logic was that I don’t see many US companies that are selling for cheaper, and also because the recent BABA earnings report was positive. I like the stock especially when it’s trading under a 12 price to free cash flow ratio. It’s currently trading at a price/fcf ratio of just above 9.
3/7/23 BABA shares outstanding actually dropping, so buybacks are having an effect.
Hey everyone. Quick update on BABA. I noticed in the past that although BABA was doing buybacks, their shares outstanding weren’t actually changing much at all. However, with the recent buyback program, their shares outstanding are actually dropping significantly. Here’s a graph from macrotrends highlighting this:
Notice how they are aggressively buying back more shares recently, which was when BABA’s price was much lower (in the 60-80 range). Perhaps that’s why the stock refused to drop below 60.
2/23/2023 Bought a little more BABA and INTC. Finally bought some META a few months ago with an average at $117. Bought a small amount of SQ a while ago at just under $60. Thinking of selling all or some of INTC position.
Hey everyone, it’s been almost 6 months since I last blogged. I hope you are doing well!
I’ve made a few changes to my portfolio in the last 6 months. I haven’t sold anything in the last 2.5 years.
Currently, my portfolio consists of:
BABA: 66% (I’m down 16% from my average purchase price). I bought a tiny bit more recently at $95, and I love the valuation anywhere near or below $90 (Price to Free Cash Flow of around 12-13 at that price)
INTC: 12% (I bought more a few months ago because they didn’t get rid of their dividend, but now they cut it by 66% recently. I’m heavily contemplating selling my entire position for a huge loss – I’m 40% down from average purchase price)
META: 6% (I bought right before earnings a few months ago on accident, and then I bought more after it dropped from earnings, my average is at ~$117 and I’m up about 45% on it)
BILI: 3.5% (No changes here, I’m up just under 20% on this position)
ACAD: 2.5% (No changes here)
SQ: 2% (Bought a while ago at just under $60/share, wanted to buy more, but the price shot up immediately so it’s a small percentage of my portfolio)
DOYU: 2% (No changes here, down about 67%, but the position size isn’t very big.)
PRLD, STNE, and TLIS: 1.5% combined. TLIS has dropped ~97% since I bought it.
I have about 3% of my portfolio in cash, and am looking at buying more BABA if it drops to $85 or lower. I have also been looking at starting a position in GOOG. They have a pretty low forward PE ratio, and have a monopoly in the search engine space. They seem to be dropping recently because of Microsoft / OpenAI’s ChatGPT, which I use frequently. I don’t think it’s as powerful or as “scary” as many people claim.
BABA had a decent earnings report today, although the share price went down. From a fundamental standpoint, I love it at or below a 12-13 price/fcf ratio, which corresponds to a share price of around $80 – $90.
TLDR: My current plans are to increase my META position (if it drops), possibly decrease my INTC position, and start a position in GOOG. I also plan to buy more BABA if it dips to $85 or below.
9/19/22 No change to current positions. Still holding BABA, INTC, and BILI. META looks attractive at current levels. Bullish on indexes at current levels.
Hi everyone, I’ve been really busy with work so this post is a bit off the normal schedule. I have not made any changes to BABA, INTC, or BILI and am continuing to hold them. The market has been quite volatile, so let’s also take a look at some of the longer term charts of the indexes.
BABA weekly chart below. Delisting fears are back again and investors don’t like it. BABA has been stuck in the trading range of 80-120 for most of this year, and I suspect this will continue unless there is a major catalyst. For short term traders, it might make sense to short near 120, and buy near 80.
SPY weekly chart below. The market doesn’t like the high inflation reports. The Fed is raising interest rates aggressively to try to tame inflation, and SPY has been dropping to compensate. From a technical perspective, the index still looks to be in a longer term uptrend, but if we go slightly lower (near 360-370), I think the index will drop quickly due to panic sellers. If going long, you could use a stop loss at 370, and a profit exit at 420 (that’s a risk of 15 to a reward of 35). I am bullish at current levels for the short term (1 – 2 months) because the risk/reward favors the index moving higher.
META weekly chart below. I think the market has overreacted to negative news so being long at current levels for the long term (3-5+ years) would make for a decent trade/investment. I think that a mean reversion should take us back to around the 230-250 range.
6/26/22 Feels like BABA’s downtrend has ended. Looks better to be short than long at current market levels.
Hi everyone, I hope you are doing well! I think BABA has finally ended its downtrend that it started years ago.
Here are a couple indications of why I think this is the case:
- The stock tends to gap up (more buying in Hong Kong market) and also ends the day near its highs
- The length of this recovery in terms of duration / time is also longer than previous bounces. Most of the previous bounces stopped after around 14 days, although many did stop around the 28 day mark (which is the current duration of this bounce)
BABA weekly chart below. Notice how much longer this recovery is compared to the other bounces.
My INTC position isn’t doing very well, but I’m not very concerned because I like the company’s growth plan and more importantly the dividend yield.
I’m starting to really like META and NFLX from a valuation standpoint, although I still like BABA more. If META were to drop to ~120, that would be roughly the same valuation as BABA is at currently. I’m still holding a cash position that is roughly 10% of my portfolio value, and won’t hesitate to deploy it if META drops significantly from current levels.
The overall US market looks a bit shaky still because we are bouncing after a short term downtrend. Although I think we have another 5% upside from current levels, it seems better to be short here (or have no position) than to be long. If I were still doing short term trading, I would short in the 300-310 range and cover in the 260-270 range with a 10-15 dollar stop loss. Risk is 10-15 with a reward of 30-50, which is a risk to reward ratio of 1:2 up to 1:5
5/24/22 Started a small position in BILI, added a little more to BABA, and assigned shares on INTC from sold puts.
Hey everyone, welcome back! I’ve been very busy so this post is very late compared to the normal weekly posts. I made many changes to my portfolio in the last month so here’s an update.
I started a half sized position (3.5% of total account value) in BILI at $18.69 at market close today. I like the anime they produce, and the price is reasonable given their revenue and growth potential. I plan to have it up to a maximum of 7% of my total account value if it drops significantly lower to around $10.
BILI weekly chart below:
Also, I increased my BABA shares by another 15% at a price just above $88. This was about 2 weeks ago. Shares are currently at about $82 and my average is around $120. I’ve never seen such a financially sound company drop this much and to valuations this cheap. My plan is to sell it at or above 250, which is what I believe the company is worth today given cash flows and sales. I also don’t mind holding for 5-10 years.
Lastly, the INTC puts I sold closed in the money last Friday (I sold the 45 strike puts) so I now have a full sized INTC position which is ~20% of my total account value. I’m down a little on it despite getting multiple dividends. INTC weekly chart below:
I plan to go to grad school for my MBA and I’m currently studying for the GMAT. As a result, posts will likely be less frequent than once a week. Thank you for reading, and I’ll see you at the next post!
4/19/2022 Sold some INTC puts 2 weeks ago, looking to start a small FB or BILI position and/or add to BABA.
Hi everyone, welcome back! I’ve been very busy with my move to Austin, Texas, so this post is a bit late. Everything is settled now so these blog posts should be a bit more regular like before.
I sold a couple INTC puts 2 weeks ago. I sold the May 20th, 45 strike puts for $1.5 premium each. They are currently selling for a bit less, so I’m up a little bit on those. I don’t mind getting filled on them if the price is below 45 in a month. I plan to sell calls on it if I do get assigned (wheel strategy).
Also, despite BABA’s recent decline in price, I see no change in its’ fundamentals so I will likely be adding either a little more or diversifying a bit into something like FB. Although I wanted FB at 200, it’s still a decent buy at current prices.
INTC daily chart below:
FB weekly chart below:
BABA weekly chart below:
BILI weekly chart below:
I think Bili’s valuation is decent now, although it could certainly slide another 50% so I would start with a small position. I like the anime Bili produces so that’s another reason to buy some.
3/13/2022 Increased BABA position by 20% at 88.33 on Friday. Average is just under 130 now.
Hi everyone, I hope you had a great weekend!
BABA shares dropped significantly on Friday, and since the same delisting fears were brought up as a reason for the drop, I saw no reason not to continue averaging down into the position. I’m down quite a bit on it (average is just under 130), but increased my position size by 20% at 88.33 on Friday.
Facebook stock is looking better and better, but I like BABA more in terms of value. It is however about 40-45% of my total account value, so it’s probably best to buy some Facebook or other stocks next.
3/1/2022 No changes to positions, but looking to start a position in FB and possibly adding to INTC.
Hi everyone, welcome back! I’ve made no changes to my portfolio the last couple weeks.
I originally had a limit order for FB at 200, but decided to pull it a day or two before it actually hit 200. My rationale was that the market was feeling as volatile as during March 2020, so I decided to wait. I still think it’s a good buy at 200 or below.
INTC had a “bad” earnings report, so their stock price has dropped pretty significantly lately too. I have one more add left that I might deploy soon.
FB daily chart below. Anything at or under 200 to me is considered a good deal.
INTC daily chart below. It’s a bit below my average, but because of the dividends I received, am about breakeven.
2/14/2022 Sold QQQ at 347 last Friday for slightly above break even. Closely following Facebook stock and have a limit order at 200 (1/2 sized position).
Hi everyone, I hope you are doing well.
I sold my QQQ long position at 347 last Friday because volatility was picking up and I didn’t want a large gap down on Monday that would go through my stop loss. I originally bought it at 345 about 3 weeks ago, so I got out slightly above break even.
QQQ daily chart below:
Facebook (Meta) has been on my radar ever since the pullback down to about 290. After the disappointing earnings, it looks even better now in terms of value. Since I think large funds are still unwinding their positions, I have a half sized limit order at 200, and the other half will be purchased if it falls further.
Facebook daily chart below:
I’m still holding BABA (no changes there). I also haven’t touched any of my other long positions.
Let’s see what the market does this week!