Bought:

16 shares of NVIDIA at 445.125

90 shares of AMD at 86.2

45 shares of MSFT at 213.68

16 shares of NVIDIA at 452.4

Total: USD $31,734

I’ve been adding to current positions rather than starting new ones. Nvidia has earnings coming up, and my guess is that they will be good. While I have been eyeing Tesla, Netflix, and Facebook, I don’t want to maintain small positions. I would want a decent amount invested, like $50K, in order to feel any return. A 10% gain on $10,000 is just $1,000, which just doesn’t move the needle for me. But I don’t have $50k in cash lying around, and I’m more or less fully invested at this point.

None of these recent purchases are considered cheap by any means. People have been saying that tech has run up too high, and to look at the hospitality or banks sectors, since these are cheap.

I don’t disagree with the logic, and I may start picking up some too. But this COVID-19 situation has been very persistent. While we were saying that end of the year still had hope, I think it has been dashed by the second and third waves of infection. Even 2021 is dicey now. Governments have seen what happens when things open up, so they will be cautious in easing up. As we have no idea how long this situation will last, I find it hard to go into distressed businesses and hope for a recovery.

I rather buy an expensive business that has good prospects whether the pandemic drags on or not. Rather than a cheap one that is entirely dependent on how the virus and governments react.

Even if a vaccine comes out, it will take months or a few years to distribute and immunise the entire world. Its arguable that the decline in hospitality and property is just starting. For one, their assets haven’t really been marked down yet. If that happens, it sparks off a domino. Property owners have to mark down their assets to market value as required by regulators. As the revenue and collateral has dropped, banks are obligated to ask the property to put up more cash on their loans. If there still aren’t sales to support the business, it goes into liquidation. In such cases, shareholders are wiped out. It can happen very fast.

It’s not really a question that travel will come back. Travel will sure come back. But the problem is 6 months, 1 year, or what? Most can survive little revenue for months, but no one can last years, without at least taking on a lot of debt.

That’s my thinking anyway, and I’m investing as such. But no one really knows how it will turn out. We’ll see how it goes soon enough.

3 thoughts on “Portfolio Transactions Aug 2020

  1. Tq for sharing, bro,… Any reasons why you have not invested into any vaccine counters, which are still reasonably-priced today ? For thematic plays, vaccine ctrs would be at the top of the ladder compared all ‘thematic ctrs’.

    CK

    1. I’m just not familiar with biotech stocks bro. It is really like playing the lottery as you don’t know which one will actually come out with the vaccine. I don’t know who will win. With AMD, I know with some certainty that they will steal market share from Intel. I invest with what I’m familiar with, and just so happens it has made money

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