Sunday, August 04, 2019

July 2019 Performance

Really didn’t do a thing in July as I saw no compelling opportunities. Just continued to ride my long positions and managed to squeak out a small gain. I continue to sit tight with some cash on the sidelines. In the past, I have been aggressive in the merger arb space, but I am treading more cautiously now. I’ve been in a risk off mode for a while. I know it’s boring not executing any trades. Just waiting for a good risk / reward opportunity to eventually show up.

Current portfolio weighting:


Apple 17.9%

Alibaba 4.4%
Mastercard 7.7%
Qiagen 4.9%
Sanofi 1.5%
Constellation Brands 22.6%
Visa 24.8%
Cash 16%

2019 Performance = +27.28% with the running monthly returns as follows:


January +7.4%

February +3.7%
March +5.06%
April +7.15%
May -7.90%
June +8.2%
July +1.88%

Tuesday, July 02, 2019

June 2019 Performance


June was a month where calmer heads prevailed with the resolution of the Mexico tariff threat. This obviously affected Constellation Brands, which manufactures most of their beer in Mexico. Also, the earnings report helped to alleviate fears in the slow down of their beer biz. I continue to maintain a ~ 20% + position in Constellation Brands and have no reason to sell anytime soon. This company is benefiting from the mega trend in the beer biz as the old legacy brands from Coors and Bud continue their decline. Everything from what I can see points to continue growth in the Mexican beer biz. Finally, I’ll be interesting to see how their stake in Canopy growth plays out with the introduction of marijuana edibles such as beverages coming this December for the Canadian market.

Surprisingly, all my other long holdings (Apple, Alibaba, Mastercard, Qiagen, Sanofi and Visa) generated positive gains in June. I continue to maintain a very conservative tilt by holding some cash. It’s not bad with cash yielding ~ 2% in this environment. Much better than the near 0% in the previous years.

In terms of risk arb plays, I did play around with Red Hat via Short Puts. I’ve recently closed out my position with a small gain. I went in big and just didn’t feel comfortable with such risk. So, I’m back to no arb / special situation positions.

Maintaining the status quo…


2019 Performance = +24.94% with the running monthly returns as follows:

January +7.4%
February +3.7%
March +5.06%
April +7.15%
May -7.90%
June +8.2%

Thursday, June 27, 2019

Red Hat Arb Play

I’m finally back in the merger arb game. Today, I initiated a position in Red Hat (Ticker: RHT) via Short Puts. It looks like all the regulatory approvals have been received and IBM (Ticker: IBM) has the cash to close this deal. So what’s left?

Wednesday, June 05, 2019

InflaRx Downgrade?

Huh? SVB Leerink cuts the price target of InflaRx N.V. (Ticker: IFRX) from $67 to $4 because of the poor results from the phase IIb trial for chronic inflammatory skin disorder. The stock is currently trading down ~90% at ~ $3.20 (closed at $37.29 day before). What a gutsy move to downgrade after the clinical results! Seriously!? There are very few analysts, who are good at their job. Majority just follow the herd mentality. That’s why I seldom pay any attention to the analysts calls.

Monday, June 03, 2019

May 2019 Performance

May ended with a big thump as President Trump threatened to impose tariffs on Mexican imports to the US if it cannot control the influx of people crossing the border. This obviously affected one of my larger holdings, Constellation Brands (Ticker: STZ). I do believe calmer heads will eventually prevail and the tariffs will not be enacted. This clearly creates more uncertainty in the market. How can you put money to work in this market when the administration can change the rules in an instant? Really frustrating for investors…

As the previous month, I have no arb / special situations plays right now. Just sitting tight with my long positions (same as previous months) and some cash.

I know, this is a real short post, but there’s really nothing more the add.

2019 Performance = +16.49% with the running monthly returns as follows:

January +7.4%
February +3.7%
March +5.06%
April +7.15%
May -7.90%

Wednesday, May 01, 2019

April 2019 Performance

I don’t know, but I continue to be very cautious with this market. April was another strong month with a gain of 7.15% with Constellation Brands (Ticker: STZ) doing the heavy lifting. Constellation is finally coming back after a nice earnings report. My other long positions: Apple (Ticker: AAPL), Alibaba (Ticker: BABA), Mastercard (Ticker: MA) and Visa (Ticker: V) performed well in April. I’m pleased so far with the portfolio performance considering I’ve been holding ~ 15% cash.

I currently have no merger arb positions. I closed out my position in Spark Therapeutics (Ticker: ONCE). I was heavy in Short Puts (not an All-In situation, but a decent size position) and long common. I was fortunate to close out a big chunk of my position on 4/2, the day before the second pull and refile.  Sometimes, you just have to go with your gut feeling and this was the case for me. I still can’t believe the FTC is scrutinizing this deal so closely.

So pretty much the same as the previous months. Just hanging onto the long positions with some cash on the sidelines to take advantage of special situation / merger arb plays that may pop up.


2019 Performance = +25.37% with the running monthly returns as follows:

January +7.4%
February +3.7%
March +5.06%
April +7.15%

Monday, April 01, 2019

March 2019 Performance

The strength of this market continues to amaze me. The market just takes bad news in stride and just climb a wall of worry. I really did nothing for March other than dabble with a small special situation trade with Eli Lilly’s (Ticker: LLY) spin off of Elanco (Ticker: ELAN). The portfolio was able to generate a positive gain of 5.06% for the month.

In the merger arb space, I’m still playing Sparks Therapeutics (Ticker: ONCE) via Short Puts and looking for a resolution this week. If all goes well with the antitrust review, this tender offer could possibly close this week. I still cannot see any antitrust issues with Roche’s (Ticker: RHHBY) acquisition of Sparks Therapeutics.

The other big news this week is Constellation Brands (Ticker: STZ) earnings release on Thursday. The stock sold off on the last earnings report due to weakness in the low end wine segment. Maybe they will announce the divestiture of their low end wine portfolio with this earnings report. I continue to like this company based on the anticipated free cash flow.

That’s all I have to report…

2019 Performance = +17.00% with the running monthly returns as follows:

January +7.4%
February +3.7%
March +5.06%