This is what my portfolio looks like as of writing this blog post.
When looking at this picture some of you might ask but where is the Tesla short position which is a very good question. The answer is that although it is not directly visible on the pie chart it does appear indirectly. So let me explain.
I increased my Tesla short position
First let me get the most burning question out of the way. What have been my thoughts on my first ever short position after 2, 3 weeks? Well I can say already that even if I end in green I will not be winning much when taking everything into consideration as the amount of time I am spending now looking at Tesla stock chart has gone through the roof. That is the issue with short positions that you need to get the timing correct unless you are willing to carry a significant minus with the assumption that one day it will work out. As I do not want to put my long term portfolio in any kind of jeopardy, then the second option is not an option for me especially when dealing with such an irrational stock as Tesla. That means I will be sticking to my predefined stop loss.
There have been good news though. Tesla missed on earnings in a big way, and I was really thinking that the stock would go through a correction, but it did not. Instead, roughly 2 weeks later the stock is down only a few percent. Even worse was the fact that one analyst increased Tesla-s price target to $1200 right after. At that point I realized that analysts have every reason to cater to the masses. Telling people what they do not want to hear will only lose customers for you.
I do feel though that there is not much good news Tesla can come out with that would cause the stock to go even higher yet the amount of potential bad news is massive due to growing competition. That is not to say that maybe tomorrow Tesla will come out and say that they cured cancer in which case I will be done, but I think the odds are in my favor for the coming year.
That is why on Friday I decided to add to my Tesla short position. I almost doubled my position by selling additional shares at the price of $846.16. I sold when the price was down around 0.5% on that day. Soon after the price dropped even lower to -1,2%, and I was thinking man I am a genius. An hour later I was thinking the exact opposite as the price had increased to +1.6%. Thankfully Tesla ended that day with only 0.26% gain as a result I am feeling still quite good with my position.
I did lower the stop loss to $1000 from $1020 on my entire position. I was thinking of lowering it to even $950, but I felt it would make it many times more likely that my stop loss would trigger in the coming months in case of a fluke good news. Once Tesla falls below $800 I might rethink this. As a result of increasing my short position I did increase the potential loss in case stop loss triggers which now stands at roughly 3.6% loss of my portfolio. The entire Tesla short position is equal to roughly 19% of my portfolio.
To wrap up this chapter I will come to the point which started the discussion. How is the short position performance reflected on my monthly pie chart. When I sold Tesla stock I did get back dollars which at the moment are sitting idly on my trading account. So the actual amount of cash I am holding is significantly higher than shown on the chart. What I did was to deduct the Tesla negative position value from my cash balance. That means in case Tesla starts to fall in price my cash amount will start to increase. I will be thinking on how to visualize it better for the next months post so stay tuned.
I blundered my crypto Piggy bank a bit
The catalyst for increasing my Tesla short position was actually the fact that I decided to take some money out of my crypto position which has shown very nice gains in the last months and still continues to perform.
This all started a few days earlier when I decided to unstake my Ethereum position in Kraken. Staking is a way to earn 4% to 5% returns on your crypto position paid out in the same cryptocurrency.
For Ethereum the promised returns were 5% – 17% which made me stake my position almost instantly when I found out about this opportunity.
It was only later that I found out that in the case of Ethereum there is no easy way to unstake. Instead, you have to trade out with a very non-liquid pair which trades at a discount. Long story short. The unstaking cost me roughly 4% of my Ethereum position. Not the end of the world but lesson learned. Read the details before you do any type of transaction with significant sums.
Now that I had some fresh unstaked Ethereum in my portfolio I decided to sell some as I had not done so the last time I trimmed my positions.
I ended up trimming almost all positions that were making up more than they were supposed to based on my index strategy. That meant I sold
Cosmos, Chainlink, Stellar, Cardano and Ethereum. In total I sold off rougly 13% of my portfolio. Leaving me with the following holdings
As can be seen on the chart MWK has been on fire lately, and it is very close to growing larger than my so far best performer ACMR.
MWK is performing really well as they are buying up smaller companies and thus increasing their future revenue with a break neck speed. ACMR is also executing very well. They announced roughly 30% of expected revenue growth for 2021.
The most interesting stock by far has been CHRS in the last weeks. The stock has been flat lining for ages so when they announced a big partnership with a Chinese company and the stock went up 10% in the first hour of trading I thought to myself is this the moment it breaks out. As every earlier time I was wrong. The stock ended the day in red, but I do like that the company is adding more drugs to the pipeline and thus increases the potential for future revenue and profits. Although my position did not win from this announcement at least I started to feel more confident in holding it. I think the current price is looking very good, and I am starting to have ideas on adding to this position in the future, so I recommend checking the stock out if you are looking for ideas.
Thanks to the outsized stock and cryptocurrency gains I managed to again beat both the indexes which means that the year is off to a good start.
Investor ranking competition
I will end the post by letting you guys know that I started taking part in a non-official Estonian investing competition. I will be writing down my additions to the portfolio and the value of my portfolio which makes it possible to compare my portfolio to others. Furthermore, I am noting down my entire portfolio there. Bonds, cash, ETF-s etc. That means it is not very likely that I will be winning the competition, but I am doing it more with the idea to show that a person can have great returns with a highly diversified portfolio.
I have divided the actual portfolio amount on the webpage with a factor in order to hide the total size, but I will iterate again that this portfolio is literally my entire net worth. So regardless of the size my skin is 100% in this game.
The webpage can also give you an idea on what are the actual gains of my portfolio as I totally understand that the current images I am sharing in my blog are not portraying this very well. I want to let you know that I am working on fixing this but until then feel free to check out the webpage to see how my portfolio is doing. As of writing my portfolio has returned 16.5% from the beginning of the year.
Stay tuned, stay awesome and stay invested
The Hobby Investor that could