Updated: Jun 8
What a nice first few weeks of April, heh? Tech came back as we spoke about and we levered up on specific names and now I have been unwinding some of it. I am bullish, but I get a bit of the worries when the VIX hits some lows like it is, and now that the tech index is at ATHs now, and SPX is blasting at ATHs, I feel we can reduce some risk in the active account. When everyone is participating, I may stand a bit cautious. We have had a fantastic year to date trading with over $100k in net profits, my long-term portfolio is up now, but I am letting that sit on cruise control as I focus on the highest quality trade ideas. This post is free, so if anyone wants access to the trade ideas, join the website for the research and ideas!
Earnings season is coming up, I reduced my options exposure to a smaller % of my portfolio, and I am going to let the trades come to us.
Rotation out of the overextended Growth Stocks was healthy, very healthy move, and we have seen this numerous times over the years. I track IGV for Growth Sentiment, if anyone was wondering. IGV has been on a power breakout, you can see my Twitter threads here.
I am not a "market timer", but more of a trend follower focused on the data presented to me. All signs pointed towards highs. We capitalized heavily off of that. I stand cautious now, but only a small hedge, my hedge was mostly de-risking options.. currently around 30% cash as of this writing in my active account. (Long-term account is always fully invested).
We have earnings coming up and investors will be focused on their businesses performance. Quarterly profits are expected to increase 24.5% compared to the prior year, according to Factset. You can get the report here. I read these fairly often and have been for years.
Well, I will continue to stay long my technology cloud names. Spending on enterprise software and devices will be leading the pack, long Anaplan and BlackLine. Most companies put the large-scale tech projects on hold in 2020 which we heard from the software companies we follow per earnings transcripts. The shift was more towards at home collaboration, now it is focused on efficiency.
Efforts to digitize businesses process are just getting started, and 2021+ will prove that. Now it is up to management of our businesses to execute on this strong tailwind.
I am not pounding the table anymore, I find it difficult to find places to put cash so my active account will probably be smaller trades as I see fit. Vol is low, complacency is high. usually not the best mix.
A sudden inflow of texts on weekly calls again, has me thinking...
Fiducia did enter a long put position roughly 4.8% of the active trading account on SPY puts, obviously that is for paid members only. We entered on Wednesday. I am a bit cautious, have my stops in and dont want to lose more than 25%, hard to market time but this is a risk I am willing to take.
Short puts on Apple for Jan 2023, I now have Short Puts on FSLY due to the R/R in the name next 2 years. Account has roughly 8.5% short put exposure. Selling the $60s and collecting a little over $15 in premium. Basically the business would have to fail to be sub $60 by Jan 2023. I will take the odds on that any day, personally.
My view is always focused on R/R, risk vs reward. As I search for a new business to study and research for Fiducia members, I am sitting tight. Have a lot of cash ready to use but nothing looks appetizing right now. I initiated a position in $IHI, medical devices ETF, I feel I should have exposure here since I do not cover it, will incrementally add to this ETF over time with profits from options.
New business I am looking into is Iteris, Inc. $ITI. Could be a potential infrastructure, smart road, 5G, IoT play and if Biden opens the governments wallet and spends on Infrastructure, I am sure that is a nice tailwind. Deviates away from my core SaaS focus, but I like opportunity when it presents itself. I also like making money.
This post was not really structured, just typing what I am thinking. Getting ready for my businesses to report their quarterly results, so now my days are spending re reading the previous transcripts and guidance.