Semi Annual Exercise Mid 2021

As I note at the start of my stock synopses;

INTRO Here’s my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

Every six months for over a decade I’ve conducted a simple review of my stocks. Stocks and investing can be made complex, but the idea is to reduce the process to its essentials occasionally. Why do I own these stocks and should I do anything about that? This would be a useless exercise for people who don’t hold stocks for more than a few months, but I tend to invest in companies that potentially have un-recognized potential for significant, positive, disruptive impacts on industries and markets. I don’t want to compete against finance institutions that have dozens of analysts investigating every aspect of mega-corporations. They’ll always know more and move faster than me. They, however, usually don’t want to have to investigate tiny companies that may be hard to understand or treat seriously. There, I have an advantage. Here is where I make sure the company and the stock continue to meet my criteria and my strategy. 

I’ve been investing in stocks since circa 1978. For years my approach incrementally improved and evolved into my current Long Term Buy and Hold approach (LTBH). For details go read (and maybe even buy) my book, Dream. Invest. Live. That strategy sounded fine and worked fine enough that I retired in 1998. Then about ten years ago, My Triple Whammy hit and there went 98% of my net worth. So much for retirement. The next several years made this exercise a semi-annual painful reminder of my situation. There’s a value to continuing an exercise routine, so I am told. Then, about a year ago a few things began reviving my hopes. In the last six months my hopes were encouraged, not flawlessly, but the general trend is so positive that my net worth has increased by more than two years living expenses in the last six months. My house’s value helped.

My two oldest holdings are Geron (GERN) and MicroVision (MVIS). One intends to treat cancer in significantly improved ways. My opinion of the other is that it can do to electronic displays what laptop screens did to CRTs and what CRT did to punched paper printouts. For two decades that seemed like such a silly notion to others that my opinion was a sore point in at least two relationships. They thought I was beyond silly. I thought I had a good idea that just needed more time. I admit that the company needed much more time than I expected. 

Geron now intends to make the treatment available within the next few, not several, years – pending success and approval, of course. In biotech, the success of the inaugural treatment may be enough to make the company profitable; and that success may be amplified if the treatment treats other ailments in the same category. Treating one cancer may mean treating others, too. 

MicroVision’s innovative display technology has finally met the need and the attendant technologies for interactive displays, and augmented reality, and sensor packages for autonomous vehicles and for home automation systems, and other products. Decades of attempts may finally succeed nearly simultaneously in different products, fortuitous synchronicity and diversification. But the products are close to, but not in, massive quantities.

My other two investments are Lineage Cell Therapeutics (LCTX) and Neophotonics (NPTN), both of which are echoes of the other two.

Lineage Cell is testing and planning to make available stem cell treatments to regrow damaged vision tissues and damaged spinal column nerves. The echo here is that the technologies can be traced back to Geron as it sold off divisions to remain solvent long enough to commercialize their cancer treatment. 

NeoPhotonics develops electro-optical switches, the sort of components that connect up the electrical signals inside phones and computers to the optical signals in fiber optics. I invested in a spinoff from MicroVision that had impressive offers, too; but a buyout left me out of the company (GigOptix). I continue to think the internet and phones are a  thing, so I think I’ll hold.

Within the first half of 2021, those stocks, my portfolio, rose ~150%. Nice, especially for six months of watching but doing almost nothing but staying informed. As so many people eagerly point out, I haven’t made that much money; it’s just on paper. For those who want to be pedantic; my unrealized liquid net worth before taxes and commissions and fees has increased by approximately 150%. That’s hard to fit into a conversation, though. I’m happy my portfolio went up 150%, which is at about two years living expenses.

And then there’s the non-liquid asset, my house. It has only ‘only’ gone up ~9% in six months, but the market that’s carrying it higher has also risen while relaxing protections and contingencies like inspections. As a real estate broker (required disclosure: Dalton Realty, Inc. WhidbeyRealtor.com) I understand the responsible benefit such protections provide, and the reality is that many buyers are feeling the need to outcompete other buyers. I can only advise and aid. (The plan is to publish a separate and lengthy presentation about that on one of my other blogs: AboutWhidbey.com.)

Real estate is also my income, ideally. Practically, that has been almost all work with hardly any compensation. In a seller’s market where there are several buyers for every listing, the news makes it sound like everyone is making money. As I’ve mentioned elsewhere (and quoting from a colleague); if sixteen people make offers, the seller and their broker can be happy, the buyer and their broker can be happy, but now 15 sets of buyers and brokers have to move on to the next listing and try again. Lots of work; hardly any compensation.

So, hard work and diligence have created a couple of months of living expenses so far this year, but my stocks and house have created a few years of living expenses without me doing much at all. 

Passive income and wealth growth are far healthier than hard work and diligence, at least for me this year. But every year can be different. Every situation will be different. Some stockholders will make much more, some might lose money. Some real estate brokers will make much more, some not at all. 

This year has been a financial ride that isn’t over. Developments that were rumored to happen in the first half of the year should, should, become commitments in the second half of the year. I will be much closer to re-retirement in the more optimistic scenarios. The world is changing. My blog about ‘news that is for people who are eager and anxious about the future’ (PretendingNotToPanic.com) is getting busier as the news swings back from politics to practical concerns. The various developments are not independent. 

In the meantime, I had to harvest a bit of my portfolio to pay bills while we fill in the gap between the rumors and the hoped-for news. Timing is no longer academic. MVIS reaching the community’s optimistic valuations would mean an easing of my stress. Near-term real estate transactions closing easily and successfully would benefit my checking account, and delay further harvesting of my retirement funds. And good luck can happen, and I buy lottery tickets. 

Thanks for staying tuned. I know for me the story has become much more interesting, and I don’t expect that to change. 

PS For those following my Signing Up For Social Security, there’s been a bureaucratic glitch, maybe. It’s hard to tell. That story continues, too.

The following links are to discussion boards I follow. Many of the independent investors who contribute to the discussions provide in-depth analyses that either aren’t available elsewhere, or would cost too much to buy. The other advantage is the diversity of perspectives. Unfortunately, I don’t engage as much as I did before. Some discussions have degraded due to lack of moderators, or have too many immoderate voices. Some boards are effectively ghost towns, or feel like cavernous empty warehouses. I suspect some of the tensions are associated with the subsequent delays in product announcements, program developments, and general business conservatism. Regardless, here are the sites I continue to visit, even if it is only to lurk and listen. 

I encourage you to tune in, because more voices (as long as they’re mature) make for a better conversation. Maybe I’ll read you there.  

Investor Village

LCTX

GERN

MVIS

NPTN

The Motley Fool

GERN

MVIS

NPTN

Silicon Investor

GERN

MVIS

Reddit

LCTX

MVIS

About Tom Trimbath

real estate broker / consultant / entrepreneur / writer / photographer / speaker / aerospace engineer / semi-semi-retired More info at: https://trimbathcreative.net/about/ and at my amazon author page: http://www.amazon.com/-/e/B0035XVXAA
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