Semi Annual Exercise Mid 2020
Six months ago, who thought the world would look like this? (Let me check my notes. Nope. I was reading about but didn’t start writing about the pandemic until February 2020.) Six months from now, who can predict how things will be. During the next six months there should be an election, an economy that’s stumbling to correct itself, protests, frustrations, and resistance to change that is being overwhelmed by circumstances and collective actions. So, sure, why not, let’s look ahead, behind, and in the mirror for a bit. This is my semi-annual exercise. The rest of the world may be in turmoil, and that may be the best reason to maintain some structure and continuity, while also trying to decide whether to change investments in stocks, time, and money. For this post, stocks.
Of my five remaining stocks (from what had been a diversified portfolio of about a dozen stocks about a dozen years ago) the price of three hasn’t changed much (AMSC, LCTX, NPTP) while two have more than doubled (MVIS, GERN). Of the five, all are Long Term Buy and Holds (LTBH): (AMSC 2003, GERN 1999, LTCX via GERN 1999, MVIS 1999, NPTN 2017 though that was in response to LMRA spun off from MVIS 1999). These are the remnants of that portfolio where many of those stocks were held for years then sold for significant profits (AOL, PIXR, SBUX, MSFT, CSCO, AMAT, FFIV, etc.). Are these the weeds that I shouldn’t be watering, or are they seeds that are about to sprout?
AMSC may not be dying off, but it also seems to be growing like a low ground cover rather than the towering tree that was supposed to “do for electricity what fiber optics did for telecommunications.” Of the five, it is my most likely candidate to sell, despite the need for its technologies that improve the efficiency of the power grid.
GERN started with four prime technologies aimed at revolutionizing health (GERN – Geron – gerontology, get it?), but is down to one which, if proven, can be a cancer vaccine for more than the blood disorders it is currently targeted towards. That’s worth hanging onto, but also risky enough that I don’t count on it.
LCTX includes one of those GERN prime technologies (stem cells) that is inspiring as it has the potential and has proven somewhat to repair damaged nerves in accident victims without the use of mechanical devices or implants. Yeah. I’ll hold onto that.
MVIS, ah MVIS. The more than doubled stock price reflects a cratering of credibility that drove the price from ~$0.75 down to $0.15 then the almost substantiated news that an MIVS component was spotted in a Microsoft Hololens unit. Add in the typical rumor mill of other contracts to be announced ‘real soon’, and the rise to a price of over $1.30 makes some sense. I may have missed the bottom, but with companies with communications as poor as MVIS’ I prefer to wait for significant, quantifiable, positive news. Risk and reward. Can’t ignore it.
NPTN replaced my shares of GIG that came from LMRA that came from MVIS. The need for high-speed electro-optical switches has increased through these years, which is why GIG finally became profitable (Yay!) and then was bought out (Boo.) for far less of a premium than a shareholder could’ve enjoyed if the company remained independent and public.
Which catch-phrase comes first in the list of many? Persistence pays. Address an unmet need. Buy low, sell high (buy small companies and sell them when they are large.) Embrace change. Don’t try to time the market Or. Don’t water the weeds (as I said above.) Cut and run. You can always come back later. Don’t try to catch a falling knife.
The pandemic, social unrest, climate change, and politics are having a massive impact on personal finances. As I mentioned in my book (Dream. Invest. Live.), one of the reasons I invest in small companies is to sell when they are large. Another reason is that small companies don’t necessarily trend with the market. The market, as reported, is not representative of every company or stock. The market is reported on as the Dow, the NASDAQ, and the S&P 500. Those indicies are dominated by fewer than a few dozen very large companies.
The very large companies tend to defend the status quo. I wish I hadn’t sold my AAPL in protest back when they fired Jobs, but look at what and how Apple managed to disrupt several industries after spending years in dire situations. IBM stock has not done as well.
I believe we need to use energy more efficiently, to introduce less traumatic and more effective treatments into medicine, to get past the era of the computer screen, and wider and deeper adoption of telecommunications. That’s what I felt at the end of 2019. It is also what I largely felt in 1999. The various crises we are experiencing don’t change that, and in some cases amplify the need. As the companies progress, they are also making larger positive contributions, which are hopefully reflected in the stock price.
The economy has been hit by the crises, but it has been fundamentally unstable for years. We continue to add poles to prop it up a bit longer, but I worry about the effects as some of the temporary props are removed, or fall part. Increased debt, fewer jobs, supply chain disruptions, and geo-political mismanagement will probably take longer to correct than the time it takes to develop a vaccine.
In six months, hopefully the US election will be resolved peacefully and justly, hopefully the pandemic will be under control, and hopefully justice will be fairly and evenly applied to people’s concerns. Hope.
My main investment may be myself. I’ll watch and manage my stocks, of course. In uncertain times, stress arises from a feeling of a lack of control. I can’t control the markets, but I can control whether I buy, hold, or sell. I can’t control the economy, but I can control many of my expenses, and I can try to improve my income.
Here are the links to the discussion boards I use. Those discussions are less philosophical and hopefully more practical. Feel free to comment here or there, and to pass along links to others. The bigger the discussion, the better the chance of valuable insights (as long as the trolls and flamers are moderated appropriately.)
The Motley Fool