Monday, October 25, 2021

Too Many IPOs

I'm starting to get weary when the IPOs start flooding the market. I just checked my broker and this is their current offerings:


I'm not participating in any as I view them as low quality offerings. You have to question why the discount brokers are trying to peddle these to their customers.

 

Monday, October 04, 2021

September 2021 Performance

September was simply a lousy month, and nothing went up. It’s feeling like the typical seasonally weak periods of September – October. Hopefully we get through October and start rallying toward the end of the year. I did put ~ 5% of the portfolio in some alternative investments (still waiting for those to close).

As in my previous post, I did play Sogou. That was practically free money as all signs were indicating a closing in a few days. The market was highly skeptical for some reason even though it’s ADR sponsor published a report with a closing date. This resulted in a relatively large spread / annualized return. There’s a lot of inefficiencies with the Chinese securities and one can make some decent money with a little detective work.

One of my long term favorites, Constellation Brands reports on Wednesday. We’ll get a good read in terms of how booze is doing with the economy opening up. I expect a relatively strong report in terms of depletions, but I do have concerns with inflationary costs impacting earnings.

Hoping for a positive Q4…

 

2021 Performance = +2.65% with the running monthly returns as follows:

January -2.1%

February +0.6%

March +0.99%

April +5.77%

May -3.56%

June +4.0%

July +2.23%

August -2.8%

September -2.1%

Monday, September 20, 2021

Sogou Arb Play

Picked up a little bit of Sogou at $9.86. Today, BNY Mellon, Sogou’s ADS sponsor issued a Corporate Action release stating that the shares will be cancelled on 09/22/21. The payout will be $9.95 (taking into the account of the $0.05 ADR fee). A nice little low / no risk return…

Friday, September 03, 2021

August 2021 Performance

 

August was not a kind month as several large positions such as Visa, Mastercard and Constellation Brands declined in value. I can’t count out Alibaba, which is a relatively tiny position that seems to be heading to zero. The lone standout was Apple, which continues to amaze me. I also drew down some of the cash and went in to some alternative type investments so we’ll so how bad those work out.

I did participate in the merger arb play with Translate Bio by selling the August 35 Puts. I’m no longer willing to risk longer dated options with these merger arb plays as the antitrust regulators have been quite active these days. Sanofi pulled and refiled their filing with Translate Bio due to additional info requested by the Fed. I can see this heading toward a Second Request.

That’s all I have…

2021 Performance = +4.84% with the running monthly returns as follows:

January -2.1%

February +0.6%

March +0.99%

April +5.77%

May -3.56%

June +4.0%

July +2.23%

August -2.8%

Saturday, July 31, 2021

July 2021 Performance

Once again, my portfolio underperformed the overall market in July. It’s been a bit challenging as I continue to maintain a decent cash position. This is in contrast to my early investing years in which I was margined to the max. One thing I would say is that you can definitely sleep better at night with a cash position versus a high margin balance.

The only change to my portfolio was the closing out the short Put (expired out of the money) position in Kindred Biosciences. I was short the July $7.5 Puts. I try to find options that expire prior to the HSR announcement with the merger arb plays. The premium may be small, but it gives me greater conviction in going big.

I continue selling way out of the money Puts on the large tech names to generate some weekly income. Statistically, there is a very high probability that these options will expire out of the money. I always do worry about a black swan moment in which a big decline in a particular stock can literally wipe you out. As the saying goes, it’s like picking up pennies in front of a steam roller.

That is all to report for July.

 

2021 Performance = +7.87% with the running monthly returns as follows:

January -2.1%

February +0.6%

March +0.99%

April +5.77%

May -3.56%

June +4.0%

July +2.23%

Friday, July 02, 2021

June 2021 Performance

Nothing much happened in June, but the portfolio did quietly gain 4% for the month. There were no crazy moves with any of my holdings. I continue to slowly add to Ginkgo Bioworks with the position now making up ~ 2.2% of the portfolio. Cash holding remains steady at ~ 7% as I am unable to find anything attractive in this market.

I did enter into a merger arb play with Kindred Biosciences. This company is being acquired by Elanco for $9.25 in cash. I am playing this via short Puts. I don’t see anything that can derail this deal, but time will tell.

That is it from me…

 

2021 Performance = +5.51% with the running monthly returns as follows:

January -2.1%

February +0.6%

March +0.99%

April +5.77%

May -3.56%

June +4.0%

Sunday, May 30, 2021

May 2021 Performance

May was another down month for my portfolio, but I managed to put some cash to work (cash holding now ~7% from ~9%). Airbnb had a nice decline with the lockup expiration and correction in the technology stocks. I added to my Airbnb position in the 130s and looking to add aggressively if it ever hits the 120s.  

I’ve been keeping a close eye on Ginkgo Bioworks and am very impressed with this company. I initiated a 2% position in Ginkgo Bioworks after the SPAC merger announcement. I rarely invest in these unprofitable moon shot investments, but I really like the founder’s vision. This company is the real deal and the leader in the emerging synthetic bio space. I’m looking forward to seeing how this one plays out over the years.

No merger arb / special situation plays in April. Still continuing to sell way out of the money puts to generate some income.

 

2021 Performance = +1.46% with the running monthly returns as follows:

January -2.1%

February +0.6%

March +0.99%

April +5.77%

May -3.56%