The Investing Diaries - Jan 12, 2021

Wow there is a lot going on right now in the world yet the market yesterday was seemingly flat. I went to write yesterday, but with placing a house on the market it just wasn't in the cards. Yesterday was a time to relax and get away from the phone and computer and I did just that. Yes, that means I had no clue what was going on in the market, and it was OKAY!

That is the difference between investing and trading,y money is working passively and is not setting that I have to watch like a hawk and be ready to push in my chips on a moment's notice.

That of course doesn't mean that I do not watch it carefully and research immensely.

Let's take a look at my portfolio because there are a couple of positions that I would like to touch on briefly because I will be making decisions about them soon.

The first is Disney (DIS). When I look at my position, that I have already cut in half I see a company that is so highly valued right now that I'm not sure the elimination of the parks is even there. We're talking about a company that makes a majority of money from parks and yes they are moving into the digital platform with Disney plus, but right now what I'm seeing is a valuation that just isn't warranted. When you look at Disney and you look at what they're doing when they reinvest money I'm not sure that the current price warrants any significant short-term (1-3 years) returns. This means for me that I probably need to take my money out of Disney to try to find other opportunities or have cash on hand in case there is another downturn.

The second company that I'm looking at is Cleveland Cliffs (CLF). This is a company that was beat down heavily when the CoVid downturn occurred and and is now back at some former valuation levels butthey made acquisitions that may make them supremely more valuable than they were before all of this occurred. Now add those acquisitions to an economy that is potentially reopening, and I say potentially because there are a ton of different factors coming to play right now whether it be with the vaccine, outbreaks, or political agendas that could affect various industries.

These are just two examples of some things that I'm currently looking at inside my own portfolio and trying to make some decisions going forward. There's a lot of uncertainty currently in the marketplace as you can see by things like Bitcoin rising off the charts. There's reason to believe, In my opinion, that we could see a potential downturn very soon in the market not quite to the point that last March was because of the pandemic but more in correction territory of somewhere near 8 to 10%. This is why I really want to be careful over the next two to three months and evaluate my portfolio with a fine tooth comb. My example above about the two companies, Disney in particular, are very broad in nature and doesn't mean that I'm going to do exactly what I said in terms of adding or subtracting them from the portfolio. What I am simply saying above is evaluating how much potential return risk/reward that you have available to you in the portfolio and making decisions weighted off of that.

Until next time, happy investing.