Stock Picks for February – How I manage my money
Christmas is far behind us and we should all be hopefully back into some sort of rhythm again, even if it is the same rhythm we ended 2020 on. On the upside, we can all look forward to summer with the longer days and nice weather (unless you live south of the equator) which we can enjoy from the comfort of our home offices or wherever you may be working.
I don’t think anyone quite expected January to start off the way it did with riots in Washington but a successful transition to a new President was made, who promptly set about undoing some of the things the previous one did. I think with President Biden big tech should have an interesting time as well as green energy; so these will certainly be on my radar but I also need to dig further into what his policies will be over the next 4 years to try and understand how the market will react and identify some potential opportunities. At the other end of January we had Gamestop and AMC who were being shorted by hedge funds expecting the stock to go down, however the members of Reddit’s r/wallstreetbets had very different ideas and ultimately grouped together and started buying shares to drive the price of the stock up with Gamestop seeing an increase of over 2000% from $19 to $468 at it’s peak. At this point lots of brokerages then restricted trading of both stocks which only further added to whole thing. Elon Musk even got in on the action along the way when he tweeted “Gamestonk” which further increased the price. I’m interested to see how this works out in the long run because I see it as full on market manipulation, kind of the same thing from the 1987 movie Wall Street with Charlie Sheen and Michael Douglas with them altering the prices of stocks through insider trading. Except in this scenario, it was through social media and the average retail investor grouping together to play the markets at their own game. Some people even made some serious money trading options on this thing, check out u/deepfuckingvalue!
Back in my world where I’m not YOLOing meme stocks, my overall portfolio sits at a nice +48% (up 10% compared to last month) with some strong performances from Footlocker who have now surpassed their pre-COVID share price delivering an overall return of 97%, as well as Virgin Galactic who are now up 157% for myself. I am looking forward to their next test flight with the window opening on February 13th. Although I am interested to see if there is a SpaceX IPO and what effect that has given what has happened with Tesla, however for the time being people might just have to be content with an IPO for the Starlink business. My purchase from last month (Sylvania Platinum) has also continued to perform well and I hope they realise the upper potential estimates of £2.49 a share from their current position of £1.01, this is up from their starting position of £0.44 when I got involved.
Shifting to a forwards looking view, I have continued with with my new habit of putting some money into ETF’s and I have continued with the Vanguard S&P 500 ETF which should match the overall performance of the market. This also provides some mitigation against the riskier parts of my portfolio. On the subject of risk, I should be able to share an update on some of the startups I invested in, specifically Chip when the convertible, well, converts as to their valuation and what this means going into the future.
Besides ETF’s, I have also added Microsoft (NYSE:MSFT) to my portfolio this month. Besides trying to minimise exposure from the riskier stocks in my portfolio by bringing in something more stable with a solid balance sheet. I also wanted to start adding companies that pay dividends that I can also re-invest as this provides some additional income. According to Simply Wall St they are also slightly undervalued which provides some room for further growth in the future.
I have a couple of other companies that I will be adding to my portfolio in the coming months who fit a similar profile to Microsoft such as 3M (NY5E:MMM) which has good financials and provides dividends and will help provide more diversification as well as stabilisation to my portfolio.
You can come back next month to find out which other stocks are on my watch list!
Re-capping things:
- 2021 has started off quite erratically with riots and crazy stock prices for Gamestop and AMC, let’s see what February has to hold?!
- Overall my portfolio is up 48%. Good start!
- More ETF purchases and added Microsoft to my portfolio. Sticking to my plan.
Please let me know if you have any comments below.