Weekly Update – CashRichStocks

What an amazing week! Jim Cramer on CNBC was calling this ‘Hell Week’ everyday and he wasn’t far wrong. It’s not been since March that I last reported movements like those below and I think there is a good chance a similar pattern plays out. Here are the movements for the current holdings during the week:

$BABA -8.82%
$GOOG -1.78%
$AMZN -3.69%
$AAPL -6.88%
$INTC -10.72%
$MSFT -1.37%
$CSCO -2.88%
$XOM -1.17%
$JPM -3.11%
$PFE -1.62%
$BTC +9.10%

The stocks are red across the board thanks to the turn in sentiment and expectations regarding US-China trade negotiations which President Trump sparked with a Tweet last Sunday.

It’s not really worth looking at this as a big sell-off, mostly the markets have just been giving back gains that can now be seen to have been unwarranted, based on unfounded optimism that a good trade deal would get sorted. I think this week shows that that ship has sailed for the time being.

It’s interesting that I lost 4 copiers this week during this market weakness and I think that’s a really good example of how easy it for the markets to shake the weak hands out of their investments. The portfolio is barely a few % down for the week yet people can’t handle it. Imagine this on a global scale with people not willing to bear even a small drop in their equity value.

$INTC is the drop that really stands out. It is bit of a disaster to be honest. I’ve been investing in them for year on-and-off and this an uncharacteristically bad run from them. First the earnings and forward guidance, then comments from the CEO which he thought would sooth investors but it just instilled doubt about the statements make. The broader market sell-off just multiplied the damage to make it look worse than it is. The 2nd quarter will fix some of this but it’s going to take time for the next earnings report and for some confidence to flow back.

$BABA saw a lot of volatility because of it being a China based company, and this is reflected in the fact that $China50 was down over 9% at one point during the week. Earnings report is coming up soon and that should show some nice growth in cloud and payments to get investors buying into the lower price. The frustrating thing on this one was that I was looking to take profit at $200 and it got close which would have meant I could be buying back in now instead of having to wait for another recovery. Our opportunity will come though as Alibaba has a fantastic future.

$AAPL weakness this week was all about China. They need China sales for the iPhone and they are exposed to risk of being caught in the crossfire of this trade war. Some reassurance comes from the fact that they are planning some huge buybacks that will equal more shares at the price falls and the fact that $BRK.B are still interesting in picking up more Apple stock.

There’s nothing major in the rest of the equity positions. Some of those that fell the least have not seen big rallies lately so I think there was less profit taking to hurt them and they were not targets for short sellers.

$BTC had another great week, the only positive mover for the portfolio and one that helped minimise the damage. After a little stumble following the Binance hack it found it’s footing and powered higher again, partly due to expectations that Fidelity will be going live with their digital asset platform shortly and that could be a boon for the crypto sector.

One last thing I want to mention this week is something regarding $GOLD as I’ve mentioned a few times that I was thinking of taking a position to help hedge against stock market volatility. Price never fell to the level I wanted so the portfolio is without Gold, but taking a look at it’s movement during this ‘hell week’ it’s up only 0.57% providing stability, but it wouldn’t have provided any gain to offset the equity drawdown and shows that money did not really flow to Gold as a safe haven this week. Just an observation but something I wanted to cover.

Stocks did recover a bit into the close on Friday and it is going to be interesting to see where sentiment heads next week when market participants have had to digest and review the moves and political commentary regarding US-China.

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Please read my bio if you are interested in copying me. My strategy is relatively low risk one as it mostly involves mega cap companies who have extremely strong cash positions.

Many of these companies are literally creating the future and it’s exciting to follow and benefit from their incredible innovation and growth.

I am an experienced investor and am not interested in taking silly risks to try and make 100% in a year. I offer a mature approach to active investing with a strategic focus on cash rich companies, which in the current business cycle happens to include some very exciting tech companies, and I intend to be here for a long time to come working on this account.

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