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   Strategies & Market TrendsTrader J's Inner Circle

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To: Trader J who wrote (54541)4/4/2022 12:51:17 PM
From: Trader J
2 Recommendations   of 55911
Market thoughts & position thoughts: 4/4/22 - Market is firmly in a wait and see mode while it digests a lot of information as the war in Ukraine rages on.

Analysts continue to trip over themselves to call a bottom in the stock market to generate confidence for retail investors that the water is safe. I have a friend who is my primary market gut-check and strategy partner and he and I are the ones who can stay on the phone for hours to talk about market minutia, hidden opportunities and the "what is" of the markets that talking heads aren't talking about. He is the one that we were pounding our fist in unison on the topic of inflation, the Fed being politicized into doing nothing while Rome burned (not raising rates) and that we would see historic inflation increases. Basically, handing out new sheet music to the string quartet on the Titanic following the striking of the iceberg. In our view the word "transient" as it related to inflation was ridiculous, based on what we were seeing and tracking. This was in April/May of 2021.

Now, analysts are saying "the bottom is in!" Factor this as it relates to that statement. If the "bottom is in" then that means all the current events shaping current market conditions have been factored in as we will not go lower. So if Putin touches off a low-megaton nuke to quell resistance, if the housing market softens dramatically due to higher rates, inflation, etc. or if we enter recession or worse due to higher rates, energy prices, unemployment, etc, then the market will not move lower.

Ridiculous. All things remaining the same, the bottom may be in, but we have far too many tumblers in motion for the bottom to be in with any confidence. We're dealing with instability in Europe with dire long term potential if things don't go well, historic hyper inflation which won't be tamed with current .25 bps moves and there is every chance that a recession, or worse, globally, could be on the horizon. If you want to say the "bottom is in" have at it, but there's no way I can and I tend to be an optimist.

But I'm enjoying see the bounce and have every hope that the bottom is truly in, meaning that we've seen the worst of all the negative catalysts. If we have, then it's off to the races.

Stocks - What is working and what isn't from my portfolio:

Things have roared back and I've been rewarded for some of play that initially looked early. In fact, many WERE early but this is why I hold to a strategy of determining the length of the play and, if it's a long term hold, then a place of breaking up my purchases into 3-5 smaller purchases to average in if given the opportunity. Here is what has worked.

In the primary account that makes up most, if not labeled otherwise (Income, Trading, etc.) the top five positions are now:

BRK/B - Takes over first due to small % sell in ABBV
DE - Backed off recently from 52WH
ABBV - Solid income + growth
NVDA - Has roared back to #4 overall due to recent rally
JPM - War and other factors have taken down the banks. I'm fine holding with much lower cost bsis

How about a look at my bottom 5 positions making up the least % weight:

- ROKU - Holding. I also hold a lot more in a taxable account with a $27 cost basis
- TDOC - Still one of my favorite long term growth plays
- AMZN - Recent addition bought for split. Should have bought more
- MTTR - Long term spec on metaverse.
-TWLO - One of my top long term favorites from non profitable (but soon) names. Other is SNOW

Other names which have been working of late:

SQ - Bad first two purchases but lowered cost with a purchase at $101
LULU - Bad first purchase at $341 and almost doubled sub $300 but held off. Roared back
SNOW - Perhaps my favorite up and comer tech play. Two purchases at $194 and $170.
TWLO - Waiting for my next entry. Want to double up. FIrst purchase $178, missed recent opp.
GOOGL - Purchased on breakdown of rally following split announcement. $2890 and $2634
RBLX/DKNG/CRSP - All rallying back off bottom. Not adding more here but holding
AEP - Well, yeah, that sector has worked well.

Names not working well:

C/JPM/BAC - Banks aren't working but environment should favor them longer term. Holding for yield
ETSY - Really ping-ponging but still one of my favorite profitable names.
DKS - This name is a conviction buy for me right now. Too low and will be rewarded again. 1.9% div
PYPL - Finally separation between SQ and PYPL. PYPL has been toxic and will take time.

Items on the sell list if I need to raise cash:

LULU - The big rally in this name on earnings has been great. Really wish I had been convicted in my desire to purchase more below $290. Based on the move and the fact that I don't want too much retail, I still flirt with trading out of this name and taking the 10.5% gain following a bad first purchase.

REGN - Really love this name and hoping for a split. Has roared back nicely and is a premium name. I'll likely continue to hold. Currently #16 in overall weight in the primary portfolio.

KMB - Good solid div earner without a lot sizzle. Just doesn't fit much in this portfolio but I like the 3.75% yield.

I still have 10% in cash in the primary portfolio, more than I'd like but also am in no hurry to deploy it. If I truly thought the bottom was in and that there weren't enough negative catalysts to send us lower, I'd be buying with both hands. But I'm not. I'm playing the long game here and looking for conviction upside and growth models but with some tangible basis of fundamental valuation .... meaning that if they aren't profitable, they will be soon based on cash flow and market potential. But as can be seen from my top holdings, I still prioritize names I can trust. But, the recent rally has started to making my other more speculative/growth names percolate up the list, most notably SQ, SNOW and ABNB.

We're in a period of significant Fed tightening, continuing inflation that won't be significantly tamed for some time + the ongoing obvious geopoli events playing out. Lots of reasons to remain on the sidelines or keep a healthy amount of cash. I'm not a sideline dweller and prefer the latter.

Overall, when I look at all my individual portfolios, I'm very pleased with the balance and mix represented. So important to be able to sleep at night and objectively view your portfolio for, now what you want to see, but what you have. There's a big difference.

Cheers all, stay safe out there.


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To: Trader J who wrote (54542)4/4/2022 12:53:19 PM
From: Trader J
   of 55911
QCOM: Dang it. Missed my entry because I got sidetracked. It was my best idea heading into late last week and I just slipped up with reviewing to end the week like I try to do. Name has been punished and provided a fantastic entry for those remaining patient. I'll sit on my hands again for a bit.

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To: Trader J who wrote (54543)4/4/2022 12:54:40 PM
From: Trader J
   of 55911
CLF - One of my favorite traders and would have been nice to hold onto this after my last successful trade. But as it stands, it rose another 50% to $32. I would be taking this off the table at this price if I had held the position.

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To: Trader J who wrote (54544)4/4/2022 1:00:06 PM
From: Trader J
   of 55911
SNOW: Has been a monster since my purchases at $194 and $170. Can't say I'm going in for another piece here after the rally but this is one of my conviction tech trades. They are not profitable yet but will be soon. They are in a HUGE mega-potential space and are a blue chip name. This one is a very long term hold for me and expect it to be back over $300 in short order unless the market melts down.

This is a name you buy and forget for at least 7-10 years. Then, when you look back at it, your $10,000 purchase is worth $X00k+, if they hit and continue their growth. I'm focusing more on their quarterly earnings and seeing profitability in short order. SNOW and TWLO are my two favorites for this type of potential.

The trader in me would like to take the 30% and wait for a chance to reenter lower but not going to play that game with these names.

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To: Trader J who wrote (54542)4/4/2022 1:04:39 PM
From: Elroy
   of 55911
Just glancing at your portfolio, I noticed this one.

ROKU - they do streaming TV? Isn't that commoditized? We recently moved from overseas, and bought new TVs. We have Netflix, Apple+, Paramount+ (free with T-Mobile), HBO Max (free with T Fiber) and we pay for Disney+.

The only one we pay for is Disney+, and we pay a bit ($4 per month) to get a second Netflix screen (we get the first one free with our T-Mobile cell phone plan).

How does ROKU fit into this streaming mess? With Netflix collapsing, and everybody offering a streaming service, what's the ROKU long term competitive advantage?

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To: Trader J who wrote (54545)4/4/2022 1:17:27 PM
From: Elroy
   of 55911

This is a name you buy and forget for at least 7-10 years.

And this

I'm focusing more on their quarterly earnings and seeing profitability in short order.

Don't quite add up.

Do you know why SNOW is better than other software companies in the cloud space? Yes, it's a huge market and growing rapidly. Why will SNOW be the winner 7-10 years from now? Any idea?

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To: Elroy who wrote (54539)4/4/2022 1:39:25 PM
From: Madharry
   of 55911
kweb might fit the bill for you though its mostly internet focused.

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To: Trader J who wrote (54542)4/4/2022 1:51:12 PM
From: Madharry
   of 55911
as always a thoughtful post. I spent some time over weekend ruminating over my portfolo. my dividend income relative my expenses portfolio breakdown. I looked at the increase in home prices over the past two years. for most parts of the country the rise has been 30-37%. the stock market for most people has been up considerably as well. other segments of the population have benefited from the child care credit.
went to a new bar/restaurant for the first time. a bit of a dive. the burgers with one side were $12.75 on up. no shortage of customers. there doesnt seem to be a shortage of jobs either. I just dont much downside here barring a nuclear event which is always possible, but i cant quantify that in my assessment. I think there are plenty of values out there.

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To: Trader J who wrote (54537)4/4/2022 6:17:01 PM
From: Madharry
   of 55911
I dont think i have seen so many stocks that look like values to me in a long long time. we will see if I am just kidding myself or not in the next year or two. What has happened in china makes no economic sense. Softbank has made something close to 200 investments in 2021 many into chinese companies. If the chinese are not going to be cooperative and help those company list on Nadaq someday it would be foolhardy for Softbank to make any new investments in Chinese companies, and that holds true for every venture capitalist out there. the entire private banking industry might as well close up shop and go elsewhere. Nothing can topple a government faster than no jobs and no food. I dont know what sort of safety net is provided for the unemployed in china but my guess is its not much. On a short term basis I am encouraged by Apple and Google having positive days.

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From: Trader J4/6/2022 10:00:41 AM
   of 55911
TLRY Earnings: Interesting release and showing some of the potential. This is a stock that wants to run but it's going to take some of the positive catalysts to play out over time before realizing full potential. This earnings report is showing some of the financial efficiency moves paying off and the stock is reacting to the positive comments about future revenues.

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