Over the last two weeks I have sold out of every position in the portfolio and will be rebuilding it over time.
YTD the Growth Portfolio is a +14.7%. Puny, Meh and Blah when compared to other times and results - although much better than a kick in the cajones - or something like that.
Currently, in the Re-Building the Roster process, I have just two signed players:
SMCI and NVDA. Both of middling positions only one of which is destined to be a Starter.
Note: I am having fun with SMCI - which I earlier proclaimed as the âTrading Stockâ of the year, and have used Trading Blocks with it fortuitously while just edging a bit into NVDA.
On NVDA: I saw some investment guru guy on some investing show or another (about a week or so ago) and he made what I thought at the time was a pretty good argument for perhaps going light on NVDA. What he basically said was this (summarized and in my words):
When you think of NVDA - which is certainly a powerful company and the leader in this generations Once-In-A-Lifetime Tech Opportunity, I am reminded of CSCO, another company that some time ago in the fading past was a Once-In-A-Lifetime Tech Opportunity. At one point CSCO was just as lauded as NVDA is today and people poured money into it. Moderately early on, in the CSCO saga, the valuation reached the nose-bleed seat level at 60 times whatever. Since then CSCO has remained a very successful company beating and raising quarterly for many years; however, the stock has not accelerated beyond nose bleed returns since then. There is a point - and this is my general thinking on NVDA, that the company will reach a certain height/multiple beyond which its valuation will simple not continue to accelerate. Investors today need to ask themselves: at what point in NVDAsâ life cycle that will occur.
Now for me personally, I am a firm believer that the guy was generally right with the key question being when - specifically - will he be right. I have no idea and if you think on this stuff to much you will miss thinking of some other stuff and perhaps even give yourself a headache. So perhaps its best to treat investment in NVDA like running the High Hurdles.
In the Olympics the record for the 110m Menâs High Hurdles is somewhere around 13 seconds or so. That is rather swuft. How swuft? Well - if you have to go to the bathroom late at night time yourself and It will take several multiples of that 13 seconds or so just to find your slippers and get there. More curious still - the record holder is a guy named Liu Xiang - who, outside of the giant basketball player Yao Ming, is one of Chinaâs best ever athletes. Just between you and me, it is somewhat puzzling that the record holder for speed and jumping is a Chinese guy. It seems to me that usually the fastest folks on the planet come from Kenya or so and often America. Can those folks not jump? And while you are pondering that you might ask yourself what in the world has the High Hurdles event have anything to do with investing. WellâŚthats simple.
It doesnât take to awfully long in a persons investing career to determine and realize that practically every investor has their very own set of criteria - hurdles if you will - for selecting and investing. And whatever your particular investing criteria isâŚit must run its course before you pull the trigger. Moreover, the degree of difficulty (In other words the higher your investing criteria and hurdles) the more likely you are to place the odds of success on your side. And the timing part? Well thats the key:
You can buy the best companies at the wrong time and lose a great deal of money - at least initially, for a while and then again perhaps forever. Which - said another way - why you buy and when you buy are mission critical which is exactly what the investing guru was saying.
So⌠anyway, I have disbanded the team for now and will slowly - which is entirely dependent on a personal definitive concept of âspeedâ combined with potential and opportunity, rebuild the team. I am in much less of a hurry than usual which I attribute to deteriorating instincts and lots of other stuff. My goal is to have the full roster in place in time for the Fall and Winter seasons.
All the Best,
BDH Investing