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ALL EYEZ ON ME
With a backdrop of rising inflation, down markets, and lots of chatter about recession, here is what I have been trading. First, I have NOT been doing much trading at all. When the market is choppy, treat it like high waves on the beach -- DO NOT GET IN.
I exited a number of traded and YES many of them were performing poorly and trading at a loss. As the song goes, you have to know when to fold them and take your lumps. I recall many years ago I forced myself to learn how to play poker. I hate the thought of putting up money and more importantly losing it, but poker teaches you risk management (how good is your hand), how much to invest (in poker this is your bet), and last but not least how to read a room (in poker this is anticipating your opponent's hand).
In this market, I had to get back to basics and start playing poker.
Risk Management -- I sold my "No Scrubs" stocks. They were broke azz stock not doing much for me or I didn't think they had an opportunity to go much higher. Clearly the market's mood (called sentiment) has changed and it's a risky environment.
How to Invest -- I went Coke Zero, Crystal Light, and Michelob Ultra, I started cutting back the sizes of my trades. I can't afford to make big mistakes in a down trending market with talks of recessions every day.
Read The Room -- People are driving less, spending less, and homes are actually staying on the market for a few days.
So in response, I've been trading stocks that fall into the following categories:
PAIN TRADE - When something hurts, I buy it. I own a Plug-In Hybrid Vehicle and work from home. So I don't even know what the price of gas is and I make a trip to the gas pump about once every 2 months I would say. But I know you're hurting, so I buy the industry that's applying the pain. Oil and Gas stocks are bursting at the seams with cash, and even my old buddy Warren Buffett is in on the act with his investment in Occidental Petroleum. I personally think he wants to buy the entire company...let's wait and see.
OUTSIDERS - I've been an underdog all my life, so I appreciate when high a stock has been kicked down so good, that there still is an opportunity to get up. I've recently traded Snap, Snowflake, Roblox, Teladoc, Zoom, and Coinbase to name a few, for just this reason. They don't align with my goals, but for now I look for underdog prices in a difficult market.
ARB - Short for arbitrage, Twitter and Activision are places where I've stuck money in hopes of the companies getting bought out. A company slid into their DMs and presented them with a ring -- and I hope they get to the alter. There are many risks with this strategy and Elon Musk dissing Twitter and Microsoft needing to get regulatory approval to buy Activision will be no easy path.
Tegna - Is my version of a investor's lotter pick. I bought a large number of shares back in 2019 around the $15 dollar range. I believe media would see it's day again due to the presidential showdown. Tegna has paid off and they too have a company that slid into their DMs. I hope they get bought out at $24 dollars but risk is on the table. Media unions have come out strongly and made their opinions heard. They are concerned the merger means loss of jobs. I am torn here, I think have these people forgotten we live in a capitalist society. I actually lean towards their perspective and being a person of color, people that look like me are often the first to be let go at many companies. But then I wonder why support for programs and industry groups that support empowering workers is so low? I guess many don't care UNTIL it impacts them. Tegna's CEO has come out and indicated no jobs would be lost as she is a veteran of the media industry and values local media. I don't know what will happen here but as the stock inches up -- my knowledge of Wall Street tells me the deal gets done and someone does a lot of government lip service that stringent due diligence was done. Either way, I think this remains a strong lottery pick because if you look back at my blog, Tenga at one point had 4 suitors. This is a company that will be bought my someone and I just hope it's a happy marriage.
