Trying To Navigate The Ups And Downs
The Corona Crisis will have peaks and valleys and it's difficult for the inner self to keep up. Just when one accepts the current phase of the crisis, a new phase begins and crisis response also begins anew, shaking off any complacency / peace / zen previously and tenuously gained.
I've sort of mentally adjusted to the next several weeks of no school, sporadic work, uncertainty. But now summer is approaching and trips are being cancelled, camp is in question, work is an unknown.
The kids are understandably out of sorts. There are certainly positives to a simpler life without all the modern structures and activities. BUT. An activity like soccer practice was really good for them -- they worked hard, exercised, learned, interacted with other kids. We're feeling the loss.
Will summer be a new season or just a continuation of virus avoidance? And then, what about next fall and winter? Will there be a viral second wave?
Is there a light at the end of the tunnel, or is that an oncoming train?
Over the past few days I think I've lost sight of the fact that these are all the wrong questions. Life is and always has been uncertain; it's just more acutely uncertain right now. The way to navigate change and uncertainty is the same as before; it's just more important right now (and more difficult) to actually navigate rather than be swept along.
There's some news today that might impact our return to normalcy. Apparently Gilead (GILD) has a promising treatment for Covid-19. The news will send markets higher. I don't have a position in GILD, but I've had a position for a while in Moderna (MRNA), a company working on a vaccine. MRNA has been bolstered by government support for its efforts, and is now getting over $400 million in federal funding to speed up development -- sending the stock up another 20% after hours.
I don't know anything, really, about vaccine development, and I invested in MRNA long before the virus was a thing. I own a basket of biotech stocks focused on new genetic techniques and technologies. I've learned to ride some of these out as they can go way up and way down. Many of these stocks stink, but one winner can make up for a lot of losers.
I've had time lately to work on my investment spreadsheets, and it's been really helpful to get a better sense of my entire portfolio and how it's acting day to day. I know which stocks and sectors are working and which aren't, and I can adjust quickly ($0 commissions so it's easy to buy and sell). I'm learning again how important it is, with limited funds, to ditch losers before they become big losers, and stick with winners so that they can become big winners.
Examples from this week: a bank stock and a video game stock. JP Morgan Chase is probably the best bank in the world. I think I bought the stock at a good valuation and initially thought I'd hold long term. But, after reporting earnings, JPM popped and then finished lower -- a bad sign in the near term. It has since fallen even more.
Activision (ATVI) is one of the best video game companies in the world. I bought some ATVI during the crash and it has bounced back nicely. A lot of people are home playing video games, and of course this was already a secular growth trend.
So I see those 2 stocks, JPM struggling and ATVI shining, and I think about where I would want my portfolio to be if I were starting from the present moment. Do I want more capital sitting and waiting for JPM to take loan losses, or do I want more capital positioned in ATVI as new gaming consoles (Playstation, Xbox) are released later this year? The clear answer was ATVI, so I dumped the bank and added to video games.
As a personal investor, I can't invest in everything so I need to choose between sectors. As I mentioned before, my biggest position right now is in gold miners, but as they rise I plan to trim that and add more to video games, biotech, and a sprinkling of other picks. But if a sector is not working, I should be quick to acknowledge that and adjust.
Psychologically, it's very difficult to enjoy a portfolio that is frequently flashing red than one that is going green. Therefore, I'm adding this as a principle for my portfolio: cut losers at -7% to -10% and move on. Let winners roll.
There's probably a life lesson here. In the peaks and valleys of experience, quickly move on from the "down" events; be as grateful as possible for the up trends. Navigate rather than be swept along.
I should quickly note that regarding the broader market, the GILD news could be good, could be nothing. I think the market wants to go higher and I'd like to trade the move as I wrote a few days ago, but it's more and more difficult to buy a move that is up so far so fast. It's the reverse of selling / shorting when the market was already down 30%. In a volatile market, you don't want to be behind the curve, trading last week's opportunity.
What I'm Watching: The fireplace.
What I'm Eating: Whatever is in the fridge. People aren't going to restaurants but my sense is people are eating a lot of comfort food right now. I get it. The day we get a vaccine, the gym will be more packed than January 2nd.
I've sort of mentally adjusted to the next several weeks of no school, sporadic work, uncertainty. But now summer is approaching and trips are being cancelled, camp is in question, work is an unknown.
The kids are understandably out of sorts. There are certainly positives to a simpler life without all the modern structures and activities. BUT. An activity like soccer practice was really good for them -- they worked hard, exercised, learned, interacted with other kids. We're feeling the loss.
Will summer be a new season or just a continuation of virus avoidance? And then, what about next fall and winter? Will there be a viral second wave?
Is there a light at the end of the tunnel, or is that an oncoming train?
Over the past few days I think I've lost sight of the fact that these are all the wrong questions. Life is and always has been uncertain; it's just more acutely uncertain right now. The way to navigate change and uncertainty is the same as before; it's just more important right now (and more difficult) to actually navigate rather than be swept along.
Focus On What's Working
There's some news today that might impact our return to normalcy. Apparently Gilead (GILD) has a promising treatment for Covid-19. The news will send markets higher. I don't have a position in GILD, but I've had a position for a while in Moderna (MRNA), a company working on a vaccine. MRNA has been bolstered by government support for its efforts, and is now getting over $400 million in federal funding to speed up development -- sending the stock up another 20% after hours.
I don't know anything, really, about vaccine development, and I invested in MRNA long before the virus was a thing. I own a basket of biotech stocks focused on new genetic techniques and technologies. I've learned to ride some of these out as they can go way up and way down. Many of these stocks stink, but one winner can make up for a lot of losers.
I've had time lately to work on my investment spreadsheets, and it's been really helpful to get a better sense of my entire portfolio and how it's acting day to day. I know which stocks and sectors are working and which aren't, and I can adjust quickly ($0 commissions so it's easy to buy and sell). I'm learning again how important it is, with limited funds, to ditch losers before they become big losers, and stick with winners so that they can become big winners.
Examples from this week: a bank stock and a video game stock. JP Morgan Chase is probably the best bank in the world. I think I bought the stock at a good valuation and initially thought I'd hold long term. But, after reporting earnings, JPM popped and then finished lower -- a bad sign in the near term. It has since fallen even more.
Activision (ATVI) is one of the best video game companies in the world. I bought some ATVI during the crash and it has bounced back nicely. A lot of people are home playing video games, and of course this was already a secular growth trend.
So I see those 2 stocks, JPM struggling and ATVI shining, and I think about where I would want my portfolio to be if I were starting from the present moment. Do I want more capital sitting and waiting for JPM to take loan losses, or do I want more capital positioned in ATVI as new gaming consoles (Playstation, Xbox) are released later this year? The clear answer was ATVI, so I dumped the bank and added to video games.
As a personal investor, I can't invest in everything so I need to choose between sectors. As I mentioned before, my biggest position right now is in gold miners, but as they rise I plan to trim that and add more to video games, biotech, and a sprinkling of other picks. But if a sector is not working, I should be quick to acknowledge that and adjust.
Psychologically, it's very difficult to enjoy a portfolio that is frequently flashing red than one that is going green. Therefore, I'm adding this as a principle for my portfolio: cut losers at -7% to -10% and move on. Let winners roll.
There's probably a life lesson here. In the peaks and valleys of experience, quickly move on from the "down" events; be as grateful as possible for the up trends. Navigate rather than be swept along.
I should quickly note that regarding the broader market, the GILD news could be good, could be nothing. I think the market wants to go higher and I'd like to trade the move as I wrote a few days ago, but it's more and more difficult to buy a move that is up so far so fast. It's the reverse of selling / shorting when the market was already down 30%. In a volatile market, you don't want to be behind the curve, trading last week's opportunity.
What I'm Watching: The fireplace.
What I'm Eating: Whatever is in the fridge. People aren't going to restaurants but my sense is people are eating a lot of comfort food right now. I get it. The day we get a vaccine, the gym will be more packed than January 2nd.
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