Please allow this post. It may serve as a good lesson for others.
During the big crash in growth stocks early this year, I got panic and sold all my growth stocks.
I used the cash to sell puts. I didn’t do well with puts. Investment value is down about 5% since Feb 26, 2021. Selling option is not worth it! Lots of data entry, keeping track of numbers, worrying about stock movement close to expiration every month. The problem is I was not focusing on company fundamentals. I was focusing on the premium. So if I picked a mediocre company to sell puts on , I suffered loss. If the stock price move too far away from strike, the return is diminished. It’s hard to beat hyper growth stock return with short options. Short option was always slightly under performed hyper growth in my experience in the best case.
My last update was from Feb 26, 2021
The portfolio change Since Feb 26, 2021:
Some major change:
MWK 21% weight ! (ticker changed to ATER) down 89%, EXPI 20% ! weight downed 11%, FUTU 7% weight downed 32%, LMND 3.5% weight downed 40%.
UPST is up whopping 171%!
Overall, this portfolio is still up 12.8% since Feb 26, 2021! Wow! Yeah, it’s lots of luck for one stock UPST to up 171%. I had 21% weight in UPST back in Feb, 2021. Too bad I sold it in March. I was also too careless to pick some other stocks on this list. MWK was the worst pick.
I will get rid of all short puts and buy back some quality growth stocks. I’ll be more prudent this time and not repeat the same mistakes. A big cash pile for several years of expense helps! Note I already retired early from my job in 2019.
I think I became more humble after this experience and learned more about psychology during market crash. It’s strange that I survived the March, 2020 crash but caved in in March, 2021 crash. The difference was in 2021, I felt I have bigger at stake and more to lose because NW increased lot in 2020. and didn’t want to go back to work. I have to take care of olderly mom. It turned out hyper growth stock investing is still the best way to invest in the stock market.
With such careless picks in growth stocks, it’s still up 12.8% since Feb 26! Just LOL
With more prudent picks, it got to be able to provide consistent satisfactory return like Saul!
Ticker Weight(%) Price Feb 26, 2021 Price Now Change(%) New weight ATER 21.63% $39.88 $4.44 -88.9% 2.41% UPST 21.02% $65.64 $178.12 171.36% 57.04% EXPI 20.29% $60.39 $53.66 -11.1% 18.03% SLBG 14.39% $3.20 $3.3 3.12% 14.84% CRWD 11.80% $216.00 $245.82 13.81% 13.43% FUTU 7.33% $152.79 $102.97 -32.6% 4.94% LMND 3.54% $125.79 $75.84 -39.7% 2.13% Total: 112.82% Up 12.82%