April Portfolio Analysis
52-weeks: Portfolio UP 77.3%
January: Portfolio UP 39.5%
February: Portfolio UP 18.6%
March: Portfolio DOWN 0.90%
April: Portfolio UP 29.7%
Year to Date: Portfolio UP 112.7% (not a typo)
As of May 1, 2019
Positions (percent of portfolio):
Ciena (CIEN) - 0.92%
Diodes Inc. (DIOD) - 0.20%
Enphase (ENPH) - 85.7%
Ericsson (ERIC) - 1.60%
Infinera (INFN) - 0.66%
Inseego (INSG) - 0.79%
Lumentum (LITE) - 1.21%
Micron (MU) - 4.05%
MJ (cannabis ETF) - 1.08%
Skyworks (SWKS) - 1.30%
Transenterix (TRXC) - 0.3%
Vericel (VCEL) - 0.03%
VMWare (VMW) - 1.96%
Cash - 8.00%
Current Positioning
Some may have noticed I did not post a March Summary. There were two good reasons for that: First, I withdrew triple my normal distribution in March (taxes, medical costs and what not). Second, my portfolio morphed dramatically (for me) throughout both March and April. It was a portfolio in transition.
We live in turbulent economic times. We are beset by winds from all sides. We’re seeing the impacts of trade wars, tariffs, China treaty negotiations, Brexit, and China-specific concerns regarding IP theft (ZTE) and cybersecurity (Huawei). Daily rumors, tweets, press statements, etc. whipsaw the Market. My portfolio reflected that volatility because I’ve concentrated my investment dollars in specific market sectors that I believe will be major future disruptors: solar, optical networking, data handling and 5G (all are “China sensitive”). Although it’s not immediately obvious in my summary of shares held and in what percent, between March 1 and May 1, my share counts fluctuated dramatically (almost daily) as I was selling the rips and buying the dips. It started when I began top-slicing ENPH to invest in other opportunities. Later, I was buying ENPH to replace the shares I had sold with discounted shares. My VMW share count fluctuated significantly, too. Generally speaking, most China-related stocks were taking a beating. Makes sense. Global supply-chains have been seriously disrupted. No one knows when tariffs may be imposed or reduced. Datacenter growth has stalled as a consequence of the uncertainty. Optical networkers and 5G-related companies suffered hits, too. But, hey, that’s investing.
I sidelined a number of companies during this turbulence. Gone is AAOI and any metals/minerals holdings. I ended up making deep cuts to my DIOD, INFN, INSG and MU holdings. I use the term “sidelined” deliberately. I intend to circle back to these companies if/when the shares offer a sweet discount. I believe all of these players will prosper in coming years. At present, the Fear & Greed Index has drifted into Neutral territory from Greed readings weeks ago.
I also reduced my TRXC and VCEL holdings. I had unrealized gains to realize and it felt to me that both companies (INSG, too) were suffering from “high expectations without much supporting data syndrome” That happens with companies that still have that “New Enterprise” smell. I’ll know a lot more about their prospects this week when they all report earnings.
I added shares of CIEN, ERIC and MJ. CIEN is a player in the 5G business. I’ve begun to study the financials. ERIC was a surprise investment. I hadn’t considered ERIC in any way, shape or form for 20 years. What I’ve now learned is that ERIC is one of three principal network installers: Huawei, Nokia and ERIC. ERIC shares will be coming on strong when the transition from 4G to 5G networks ramps ever higher.
Finally, I invested in MJ, a cannabis ETF with a formal name too difficult to remember. The cannabis sector (in all its variants) will experience significant growth. There will be multiple winners and losers. Given that I’m not prescient enough, and too lazy, to do the necessary research, this ETF should do the trick (much like Biotech ETFs are a safer way to play in that sector).
I added to a few positions: SWKS and LITE principally because I felt the prices were reasonable. ENPH was my biggest increase. This has become a familiar ebb and flow. When ENPH announces positive news, the share price moves up rather dramatically. Not too much later, the consolidation phase begins and share prices fall (rather dramatically). I’ve taken to significant top-slicing when everyone’s celebrating. My goal, though, is to repurchase all those sold shares before the next earnings report. So far, that strategy has served me well. At some point in the future, ENPH will begin acting maturely. But not yet.
Just One More Thing
I previously noted I invested in VMW with this parenthetical remark: “(yes, yes I know that Nutanix is the overwhelming board favorite)”
Year-to-date performance: NTNX is DOWN 5.39% and VMW is UP 48.2%
Good night and good luck.