The Profit Investigator

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The Investing Diaries - Jan 27, 2021

Well it does look like the market will take a bit of a break today as I sit and drink my morning coffee and the futures point to red. This continual upward motion has to take a break at some point and as the retail investor is getting a lot of the blame for the over-exuberance in certain stocks, it has to noted that they are not responsible for the market overall. The Fed has played a huge part in this, both with interest rates and continued dovish tone. The continued stimulus is also helping the investing, not necessarily because investors are dumping that cash directly into the markets (some are) but also because they are spending it and…you guessed it…stimulating the economy.

Now as we all watch this, and the elephant in the room of Gamestop (GME), there is now continued talk about the tech bubble and how many crazy things were happening then. There are a lot of pundits and analysts that are calling for a crash soon, and there are also the other bullish side that is saying these situations aren’t even close to the same.

Who do I believe and what am I going to do?

Well if you follow me, then you will see lately that I am beginning to shift some of my portfolio away from holdings that have been in my portfolio for quite some time. I moved out of Nano-X Imaging (NNOX) as well as Disney (DIS), VAALCO Energy (EGY), Ping Identity Holdings (PING), and Cleveland-Cliffs (CLF). This had nothing to do with disliking these companies but instead that I believed that it was more prudent in taking my profits, ranging from 400% to 50%, and placing that liquidity in a couple positions that I have been watching for some time.

The positions that I have taken will be written about more formally in an article but let me leave you with this:

From my view this market is volatile but it does not necessarily mean it is overpriced. Just like in any market there are vastly overvalued and undervalued companies and due diligence is continually needed to make sure that I invest in the latter. Bull markets raise all ships (most of the time) and can give a false sense of bravado. A continual plan, that is followed over the long term, is a way to combat this. Mistakes will be made, but consistent following a plan that you believe in, based in fundamentals and critical thinking, is a way to beat the market.

Until next time, happy investing!