Portfolio Update (Nov 2018): Rise of the phoenix

After the dreading market sell-off in October, my portfolio jumped and returned about 11% in November alone, rising like a phoenix after getting burned. It was quite an emotional roller coaster seeing my portfolio value going up and down by more than C$3,000 within 2 months.

Now the portfolio gain is OVER C$16,000!!!

Now the portfolio gain is OVER C$16,000!!!

In past articles, I only compared my portfolio with S&P500 but I will add Nikkei 225 and S&P/TSX60 as benchmark from now on. I figured it may provide a better insight since I invest in American, Japanese and Canadian stocks. You can see that my portfolio (Blue) is still beating all three benchmarks (US: Green, Japan: Purple, Canada: Orange).

Nov 18 vs SPX and Nikkei and TSX.png

There were some notable changes in the portfolio.

  1. Call options on CVS (NYSE: CVS)

    Since the call option on CVS was going to expire in January, I was looking for a good time to close the positions before the expiry. Thinking that the stock may have approached a near-time psychological top (No data to backup, my pure instinct), I made the move when the stock price hit near $81.

    I purchased two call options when the stock price was near $72. I ended up realizing about U$750 gain from about U$2,000 investment (The figures may be a bit off, I’m writing this off top of my head). Not bad but it’s an ok result considering the amount of risk I took It could’ve expired with 0 value (thus U$2,000 loss) depending on the price movement. I probably should stick to regular stock purchase or shorting put options… I’d have to say I got a bit greedy in this trade and somewhat speculated (i.e. a gamble).

    As I wrote in my valuation article, I believe it’s a good stock to own as a long-term investment. I will go into a long position again if we face another market sell-off.

  2. Garrett Motion Inc. (NYSE: GTX)

    As I wrote in my another valuation article, I believe Garrett stock is a great investment at price below $14. When the stock price dropped to near $13, I shorted put options with the strike price of $12.5 and December expiration.

    Netting the premium of the put options, my average effective purchase price of the stock became about $11.5. The stock is now also trading at $11.5 so I’m pretty much at break-even now. I’m looking into averaging down if the stock price drops further. If my investment thesis is correct, the stock could double or triple within 5 years or so. IT’S ALL OR NOTHING! (Just kidding, my portfolio is decently diversified for the moment).

  3. Bear Put Spread on S&P 500

    To hedge against a potential market meltdown, I entered into a short-term bear put spread position (Long put at 2,600, Short put at 2,400, February expiry). If the market keeps going up in future, I may add more positions with longer maturity.

    For those who don’t know what bear put spread is, I may write an article on it later.

Are you curious how my portfolio may perform in long-term? SUBSCRIPE AND STAY TUNED!!!!!!!