Something Feels Off in My Portfolio-A Learning Moment in Which I Can Lay a Plan Out Pt. 1

Sorry for taking so long to make another article. I have been insanely busy with so much school work, but now it is Christmas break, so I have much more time, and I might even go down from a post every three days to a post every two days over the break. Also, since I told you guys to buy GigaCloud Technology, it has sunk 13%, so that’s a rough look for me, and I am sorry about that, but we’ll reassess a bit in this article.

As I said in my title, something feels a little off in my portfolio, and I cannot quite put my finger on it. It may just be because I have lost a not-insignificant amount of money over the past weeks, just directly missed out on a bit of money, and am/was riding at an all-time high in an overvalued market. Still, my gut feeling tells me that my portfolio needs re-adjustment. Yet, when I go through my portfolio, stock-by-stock, I feel pretty secure and optimistic.

Costco, Microsoft, and ServiceNow are three companies that I feel good holding forever. I am not observing any worrying signs about any of that trio, and at 19%, 13%, and 10.2% of my portfolio respectively, I feel extremely secure about 42% of my portfolio. Really, there aren’t even hints of warning signs at any of those companies. That leaves 58% of my portfolio that I do not feel as great about, which is 58% lower than I would want.

First, Ferrari at 16% of my portfolio. I bought Ferrari in May at about $416, in May again for $413, and in November for $431. I have been up 20% on the company at one point this year, but I have fallen down to pretty much nothing, at a 2% total gain. Some of their numbers from the most recent quarter were not as stellar as usual, and there are fears that Ferrari is getting caught in a luxury goods slowdown that has affected tacky bag maker LVMH. I do not have those same fears. Earning growth and revenue growth are still at a place I like, I love their CEO, and also, Ferrari is not LVMH or any of these other faux luxury companies that make awful products in China at insane margins for middle-class people to pretend that they are wealthy. This company is recession-proof, slowdown-proof, and everything-proof because real rich people will stay rich, Ferrari will stay exclusive, and people will keep buying Ferraris.

If Ferrari falls more, I will probably buy more, even at their insane valuation.

TQQQ is next, at 12% of my portfolio. I believe in the 100 largest technology companies in America, and I think their prices will increase over the next decade, so I want three times that growth. This is a hold, and I am up 63% on it.

Disney, Block, and GigaCloud are where we start to get a tad iffy.

Block is a stock I have become so bipolar and emotional about, which is so stupid and immature on my part. This is a stock I need to reset on emotionally and start clean and fresh on. I have an average price paid of $61, and the price now is $90. I wrote an article a while ago basically dunking on the stock, and writing about how my money would soon be out of the stock, but we will retcon that article completely now. I must have been mad or something because that was way too strong. They have established a rock-solid revenue base plus decent earnings (including a first profit this year). Their projected revenue growth rate of 10% is a tad weaker than I would want, but their projected earnings growth of 28% is pretty good.

In terms of less balance sheet-focused analysis, I like where both of their platforms are at right now, in general. Both Square and Cash App are in good spots. I really like this ecosystem that Cash App is building where you can trade, save, and pay all in one platform that is less shady than it used to be.

I just don’t want to get screwed on this company, and even though everything I just wrote tells me that I should feel good, I cannot shake the feeling that I need to sell out of this company, that I should take my 45% profit and split. The price is $90 right now. I will continue to mull this company, but if the price slips any more, say beyond $85, I am pushing the sell button with speed.

Disney is a stock I have held for over five years now, and I have eeked out, by the skin of my teeth, at a 24.5% gain. I have been through it all, and it has rarely been a fun ride. I am rapidly approaching tapping out of this company and admitting some measure of defeat. It has become increasingly evident that Disney is a good company with some great qualities that make it tempting to hold, but the market has them priced about right. I like where they are going, and I think they can become the solid number two in the entertainment industry, but I don’t want to be invested in the number two company, I want to be in the number one company.

I think Disney’s price will slip back into the $80s again, and I might buy there, but I fear that it is time to cut bait.

Okay, this is already too long. I am going to make a part two that covers GigaCloud and the plan for this portfolio in the future in a part two tomorrow.