Stock Picks for September — How I manage my money

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Another month has flown by and here we are almost at the end of Q3 so time to have a look at what is on my radar and what trades I’ve made.

I would provide an update on last months stock picks however as they’re all unlisted companies it’s very much playing the long game here! The only thing to add is that I jumped on the opportunity to increase my initial investment in Moneybox which came about when they re-opened the round on a first-come first-served basis to offer up the shares that people had decided they no longer wanted after the cooling off period. I’m certainly looking forward to see how they perform in the next 3–5 years.

Anyway at time of writing my Revolut portfolio is currently up 21.9%.

Sometimes not everything turns out the way you want it to be and for me this was Uber who I decided to part ways with causing me a loss of 10% from when I bought them. I promptly decided to put that money back into Amazon as they’ve been performing fantastically this year seeing their share price increase 68% in the last 6 months alone. The thing to pay attention to here is with investing you have to know yourself when to get out and be prepared to take the odd loss. Since COVID-19 lockdowns started in March and they dropped they’ve not really gotten back to where they where and even though cities start to get back to normality I figured I could do better with that money.

NIO’s Electric Vehicle source: NIO

So besides taking a bit of a loss with Uber what else have I been up to, first up on the recent investments is NIO (NYSE: NIO) who are a Chinese electric vehicle manufacturer which I’ve had my eye on for the last few months. They have been referred to as a Chinese Tesla which I think is both good and bad; bad because Tesla struggles to make a profit and good because Tesla recently passed Toyota to become the most valuable automotive company. There are some interesting articles out there about where the stock might go but despite doubling its sales in August it still suffered from the Tesla stock split which had a knock-on effect to the rest of the EV market so I think the performance of Tesla will continue to affect NIO in the short term. The upside here is that NIO are cheap at the moment trading around $17 per share compared to Tesla’s $391 so let’s see how this turns out especially as Simply Wall St suggesting they are trading at 48% of their fair value! I’ll give an update next month.

Previous Apple Stock splits source: IG.com

Connected to the subject of Tesla is the Apple and Tesla stock splits which took place, but what the hell is that and why should I care? A stock split is quite simple where a company decides to issue new shares but it doesn’t effect the market capitalisation of the company instead making the shares more accessible to investors. So in the case of Apple (NYSE:AAPL) they did a 4:1 stock split meaning for every 1 share held before the split they would now have 4. This also changes the price with Apple trading at just under $500 on Friday and opening at around $125 on Monday which I see as much now affordable. Crazily Amazon (NYSE: AMZN) would have to do a 20: 1 stock split to get near that level! We can only hope!

source: Chip

My next investment for September was going to be the Global Fintech ETF I had written about in my last article but then Chip announced they were doing another fundraising round. Which at first was a little disconcerting because they had only just completed £2.6 million back in April to secure some extra runway and put them in a better position but this was going to be a convertible and would be matched by the Future fund and the British Business Bank and this was much more interesting.

What is a Convertible, I hear you say? Essentially rather than buying shares at X value today you’ll be buying them in the future at a future valuation but with an agreed discount. This means that the money that is invested today will convert (hence the name convertible) to shares at a discount in the future but until then it will earn interest.

In the case of Chip, they have a agreed future valuation of £80 million which will see a 20% discount, however if their valuation is more (most likely in my opinion) then you will get even more discount for example if it is £160 million then there will be a 50% discount. Also good to know is that in case it is less you will still got a 20% discount. I also mentioned earning interest and here people will be earning an additional 8% on top of their investment.

And just to add a cherry on top, the investment will convert into A shares rather than the B shares that I have been buying before which bring additional rights with voting but more interestingly you’ll be at the front of the queue in future investing rounds as you get pre-emption rights with A shares.

If anyone is interested in taking part you can get more information and pre-register here: https://getchip.uk/invest-in-the-future-of-chip

I’ll give an update next month on how the whole round goes but I suspect there will be many thousands joining Chips investor community.

Next month I’ll get round to the ETF as well and can give a short review of how that experience was.

As usual, leave your comments below.

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How I Manage My Money by Paul O'Neill

Writing down my personal journey to understanding finance through stock markets and start ups