April 28, 2019
The S&P 500 was up 1.20% for the week and posted its highest close ever. It was 1 point away from hitting its intraday high set back in September.
Great first quarter GDP of 3.2% helped boost the market this week.
This week, I made one stock sale of Aurora Cannabis (ACB). This is a company I scooped up in December when the stock market tanked. I was able to pick up shares for the then depressed price of $5.51 per share. I sold two call options on it since then to bring my cost basis down even more. When looking for positions in my portfolio to sell, ACB looked like a good candidate. I sold enough shares at $9.16 per share to bring the cost-basis of my remaining shares to $0. Now all of my ACB shares are “on the house’s money”.
Why did I decide to sell ACB? While I still think cannabis companies are potential high growers (no pun intended), I’m not sure how to value them. It appears a lot of the current price is based on market euphoria rather than fundamental business reasons. Therefore I decided to let go of some shares and take the 66% gain – not bad for a 5-month return! Being in my Roth account is awesome because I won’t have to pay any taxes on that gain.
For my remaining ACB shares, I primarily own them for speculation. I think it has the potential to be a multi-bagger, but it also has the possibility to crash-and-burn. Given that my cost-basis is now $0, the risk is worth the potential reward to hold on to these shares.
There haven’t been any changes to my long-term strategy. As the S&P 500 reaches new highs, I’m keeping about 25% cash in my individual stock portfolios and waiting for another buying opportunity. The ACB sale helped me get to 25%.
My mutual fund portfolios are 100% in stocks since I have a 20+ year time horizon. I continue to dollar-cost average into them.
How are you guys handling the market? Share your thoughts by commenting below. If you like this post, share it on social media.
I/we are long ACB.
I wrote this article myself and it expresses my own opinions. I’m not receiving compensation for it (other than from Wolves Of Investing), and I have no business relationship with any company whose stock is mentioned in this article.