Revenge Trading and Portfolio Cleaning

Time for a bit of a market update…

The markets are angry (my favorite Seinfeld clip). Michael has the best take on these changes.

The markets always make most sense in hindsight.

As a trend investor I prefer to focus on living in the future by following the smartest people that play with technology/toys and playing with the toys myself rather than trying to predict how the markets will look six months out. The trick is – at least with public stocks – is you have to be a disciplined seller when price trends change.

Take a look at the one chart that is likely having the biggest impact on stocks.

Earning TWO percent (basically risk free) is not something to get excited about, but when it was .2 percent just two years ago, it is a relative windfall for people with cash that do not love stocks today:

Next up…

I have been on a bit of a revenge trade binge since the $XIV whooping a few weeks back

I have shared all the ideas in real time on Stocktwits of course.

I put on a few trades that I believed were high probability. It was an extra few hours a day (for me at least) of scanning through my feeds and lists.

The first big win has been $OKTA which I took partial profits in. A second trade was buying S&P puts last week which I covered a little early yesterday, but was a good win.

Over the decades of trading/investing I have learned to get back on the bike very quickly after a big loss. The easiest way is to take the setups you are used to and decrease size while you gain back confidence. I generally increase size because of my focus and narrow my picks to setups that look and feel the best (my eyes/gut). I think sharing them in real-time really helps the most.

Next up…

I think it is a great time to cleanup your portfolio.

Let’s call it an early spring cleaning brought on by the correction and increase in volatility.

Last week I sold my Snapchat ($SNAP) in the 20’s (shared on Stocktwits). It was a stock I owned as part of my public venture portfolio.

I have too many individual stock positions (the good problem of a bull market) and since I am doing the cleaning, I am shedding the stocks that I have least conviction in for future gains. In the case of Snapchat – I do not use the product and it’s had a great run the last month. Users are revolting against the new product changes, but users revolted on Twitter as well (#RIPTwitter) when the stock was $14.

I am keeping my other public venture investments – Bitcoin, Ethereum, $MMYT and $CTRP

My biggest positions continue to be Apple, Google, Amazon, Zendesk, Nike, Schwab, Shopify and Tencent. I also own Mastercard, Visa, Disney, Zebra, OKTA, GRID, Twitter, NOAH, Palo Alto Networks, Mulesoft, Goldman and Mongo DB.

Still too many public market positions so I expect to keep pruning if the market chops and/or declines.

Hope this helps.

Also published on Medium.