Year In Review: 2017 Trades
Notes:
Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash. Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.
Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash. Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.
The purpose of this discussion and review is to analyze the trades I made in 2017 - what went bad, what went well, and what's still undecided. Hopefully we'll be able to glean some lessons from the experiences I've had and use those to become better in 2018 - so let's dig in. Below are all of the trades I made in the year. I'm going to try to break things down stock by stock, not trade by trade, but I'll do my best to keep all of this straight.
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| 2017 Trades |
Now let's get into the trades. My trade volume was a little higher this year, though most of it was stock purchasing, rather than stock selling. I had opportunity to add money into the portfolio and took advantage of it. The first buy happened early in the year when I bought shares of Ionis Pharma at $46.50 (Line 2). The stock was under some pressure as we awaited 4th quarter results, including sales information for Spinraza, which just started commercial sales. I expected positive results and for the stock to act accordingly. We got that, but then were quickly hit with downgrades and other phase 3 results that had a plethora of negative pieces put out and the shorts on attack. I did the best I could in this situation, I think. I was below my basis and I played some odds. It might be said that I should've sold some off of the big gain that happened, but I was also looking at it from a perspective of a stock that goes into the green likely isn't done. Speculative stocks move harder/faster and I may want to keep that more in mind and make sure I'm trading around my position some.
Next stock to discuss is the iShares Eurozone Fund, or EZU (Lines 5 & 7). As I've mentioned a number of times, I recognized the fact that the level of risk for investing only in the US has grown while the rest of the world is just starting to get better. I wanted broader exposure to help protect and potentially increase my return and I chose this stock to do it. I waited for a pullback in the stock, which was already up pretty nicely by the time I purchased in June. I was fortunate enough to get in around the low of that time for my first position. I tried to hold to my cost basis, but I missed another opportunity to buy in early July - hoping/thinking the stock would pull back a bit further. Instead it turned around, but I found an opportunity in August where it pulled within as close to the basis as I thought was possible, which wasn't fart off. I feel I've done a pretty decent job of building this position given the fact that it's been almost impossible to get it to pull back below my cost basis. I still don't have a full position and may be looking at yet another time I need to purchase shares above my basis. It seems almost impossible to get the fund to go below $43 and if it does, it's there for only a few hours. With the US Dollar starting to weaken against the Euro, it is likely to stay that way.
Not all of my trades were buys and I'm going to sit here and be just a bit proud of myself for that. After numerous painful lessons, I started treating On Semiconductor as the more volatile stock that it is (Lines 3, 8, & 9). The funny thing is that while it's still been volatile, it hasn't had the dramatic pullback or reversal from highs like we've seen historically. It can be said that I left gains on the table, but strategically I like the decisions I made and believe I have potential for better results going forward. The first sale was when the stock was well above my price targets. I felt greedy for not selling something. What I didn't know was that semiconductor stocks were about to get really hot because of cryptocurrency and stocks like NVidia, while stocks like ON also had their own value in automation industrially and automotively. But by selling, I raised cash to help get myself into the EZU and eventually Apple. The second sale included some unintentional button pushing that had me temporarily purchase 11 shares instead of selling them. Luckily I was able to sell a little higher to recover some of the added transaction costs. Not a mistake I was happy about, so let's hope I've learned my lesson after doing this for a second time in a few years now. This second sale eliminated my cash investment, leaving the rest to run on its own, which is now up an additional 16% from that point.
As I just mentioned, I used some of the proceeds from my sales in On Semi to buy shares of Apple (Line 10). I still wanted technology in my portfolio and I was faced with a situation where it was too nice of a pullback to not take advantage of. As such, I got a quick 10%-15% gain on what I invested and the stock has more than enough opportunity for larger, faster growth than On had. This stock I may also have to violate basis, as I struggle to see anything put enough pressure to take the stock below $168. In fact, I may have just missed my best opportunity to get the stock below 170 as an end of year trade.
The final sale I made in early December was a small set of shares of Citigroup. The stock had just gone through an impressive run-up and looking at the balances in my portfolio, I decided I wanted to be disciplined and take some profits to rebalance as needed and to protect from a pullback. I happened to be essentially right near the top when I made this move and the stock has since pulled back. I feel from a trade perspective, I've done everything I could here. I do continue to entertain buying those shares back again if the stock sells off enough. It's sitting right near its 50 day moving average now, if it breaks through, we might get a good buying opportunity near $70, if the company doesn't jump in and buy shares too early. I don't think this is reflective of the stock being bad, I just think it needed to pause. It's still the stock that's under valued compared to its brethren, but I think that will continue for awhile. Stock buybacks by the company over the next couple years will help make the stock more in line with its peers.
This leaves me with Cedar Fair (FUN). All of the purchases of that stock (Lines 1, 3, 6, & 11). All of these purchases were strictly in relation to dividend repurchases from all the dividends I collect through the year. The stock provides about a 5% yield, so I look to capitalize as much as possible on the return from it. That said, there was a period of time where this stock also got around my price limits and was a significant part of my portfolio. I should've done like I did with Citigroup and sold some profits to buy again at a later time. Instead, the stock took a tumble and has yet to recover to those levels.
So in conclusion, it seems I need to ensure I follow discipline a bit better. While this could be applied more to my buying habits, I think for the next year I need to improve on my selling habits. I can't always rely on cash injections to help me from selling to buy new opportunities. Might I miss some upside potential? Absolutely, but if I stay rational about my actions, I think I'll be capable of feeling even better about the actions I take with my portfolio.
Next stock to discuss is the iShares Eurozone Fund, or EZU (Lines 5 & 7). As I've mentioned a number of times, I recognized the fact that the level of risk for investing only in the US has grown while the rest of the world is just starting to get better. I wanted broader exposure to help protect and potentially increase my return and I chose this stock to do it. I waited for a pullback in the stock, which was already up pretty nicely by the time I purchased in June. I was fortunate enough to get in around the low of that time for my first position. I tried to hold to my cost basis, but I missed another opportunity to buy in early July - hoping/thinking the stock would pull back a bit further. Instead it turned around, but I found an opportunity in August where it pulled within as close to the basis as I thought was possible, which wasn't fart off. I feel I've done a pretty decent job of building this position given the fact that it's been almost impossible to get it to pull back below my cost basis. I still don't have a full position and may be looking at yet another time I need to purchase shares above my basis. It seems almost impossible to get the fund to go below $43 and if it does, it's there for only a few hours. With the US Dollar starting to weaken against the Euro, it is likely to stay that way.
Not all of my trades were buys and I'm going to sit here and be just a bit proud of myself for that. After numerous painful lessons, I started treating On Semiconductor as the more volatile stock that it is (Lines 3, 8, & 9). The funny thing is that while it's still been volatile, it hasn't had the dramatic pullback or reversal from highs like we've seen historically. It can be said that I left gains on the table, but strategically I like the decisions I made and believe I have potential for better results going forward. The first sale was when the stock was well above my price targets. I felt greedy for not selling something. What I didn't know was that semiconductor stocks were about to get really hot because of cryptocurrency and stocks like NVidia, while stocks like ON also had their own value in automation industrially and automotively. But by selling, I raised cash to help get myself into the EZU and eventually Apple. The second sale included some unintentional button pushing that had me temporarily purchase 11 shares instead of selling them. Luckily I was able to sell a little higher to recover some of the added transaction costs. Not a mistake I was happy about, so let's hope I've learned my lesson after doing this for a second time in a few years now. This second sale eliminated my cash investment, leaving the rest to run on its own, which is now up an additional 16% from that point.
As I just mentioned, I used some of the proceeds from my sales in On Semi to buy shares of Apple (Line 10). I still wanted technology in my portfolio and I was faced with a situation where it was too nice of a pullback to not take advantage of. As such, I got a quick 10%-15% gain on what I invested and the stock has more than enough opportunity for larger, faster growth than On had. This stock I may also have to violate basis, as I struggle to see anything put enough pressure to take the stock below $168. In fact, I may have just missed my best opportunity to get the stock below 170 as an end of year trade.
The final sale I made in early December was a small set of shares of Citigroup. The stock had just gone through an impressive run-up and looking at the balances in my portfolio, I decided I wanted to be disciplined and take some profits to rebalance as needed and to protect from a pullback. I happened to be essentially right near the top when I made this move and the stock has since pulled back. I feel from a trade perspective, I've done everything I could here. I do continue to entertain buying those shares back again if the stock sells off enough. It's sitting right near its 50 day moving average now, if it breaks through, we might get a good buying opportunity near $70, if the company doesn't jump in and buy shares too early. I don't think this is reflective of the stock being bad, I just think it needed to pause. It's still the stock that's under valued compared to its brethren, but I think that will continue for awhile. Stock buybacks by the company over the next couple years will help make the stock more in line with its peers.
This leaves me with Cedar Fair (FUN). All of the purchases of that stock (Lines 1, 3, 6, & 11). All of these purchases were strictly in relation to dividend repurchases from all the dividends I collect through the year. The stock provides about a 5% yield, so I look to capitalize as much as possible on the return from it. That said, there was a period of time where this stock also got around my price limits and was a significant part of my portfolio. I should've done like I did with Citigroup and sold some profits to buy again at a later time. Instead, the stock took a tumble and has yet to recover to those levels.
So in conclusion, it seems I need to ensure I follow discipline a bit better. While this could be applied more to my buying habits, I think for the next year I need to improve on my selling habits. I can't always rely on cash injections to help me from selling to buy new opportunities. Might I miss some upside potential? Absolutely, but if I stay rational about my actions, I think I'll be capable of feeling even better about the actions I take with my portfolio.
Nothing on this site should be taken as advice, research, or an invitation to buy or sell any securities. All views expressed are solely of my own and I am not a professional money manager. Please consult with your financial adviser before taking any action in your own portfolio.
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