At the end of 2021 I felt confident about 2022. Yes, I can be that silly. Some folks have given me credit for staying positive despite years of what some have called a perfect storm of bad luck. Some chastise me for being a victim, as if I knew ahead of time what was going to happen. (For details, scroll and browse through the last decade or so of this blog. If anyone does I’ll be surprised. People have their own lives to live.) I am what I am. I am where I am. And I intend to continue moving to a better place without changing my core values. Like I said, I can have silly notions. But on to the stocks!
For those who have never encountered my semi-annual portfolio exercise I’ll quote myself.
“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.“
The stories of my stocks continue to change because no company can remain static. Employees, management, markets, economies, and even politics mean it is impossible to remain the same, but I check every six months to make sure I didn’t miss something in my daily news feed. The stories of stocks and particularly the companies they represent are more interesting than most fictional stories, at least for me. Real people making real decisions without precise and complete knowledge generate drama and trauma, fears and hopes, risks and rewards.
Despite all of that the first half of 2022 didn’t change the value of my portfolio substantially. None of my stocks did so well that I am happy to sell and re-retire. None of my stocks did so poorly that I want to sell them. They all seem to have made encouraging progress, though progress that usually suggests significant, positive, quantifiable results later. Later. Patience, lad. Later.
I was about to list the world events that affected the investing environment but I suspect you already know about this year’s suite of events that are hard to ignore. One aspect of my investing style, Long Term Buy and Hold of small potentially positively disruptive companies is that their actions are easier to track. (For details read my book, Dream. Invest. Live.) A small company’s success with one product or a few can dramatically improve the company and the stock price, especially if they meet an unmet need. Even in a down market, a cure for cancer is hard to ignore.
Hmm. Especially in a down market something like a cure for cancer or a new technology or an ingenious solution can draw the attention of investors who are dismayed at stocks that were impacted by dire economic news. In an environment like that I call such stocks Lifeboat Stocks, something people swim to when everything else is sinking.
So far this year, very few are diving into the water to reach the inflatables that are GERN, LCTX, MVIS, SOLO, and WNDW. (aka Geron, Lineage Cell Therapeutics, MicroVision, Electramecchanica, and Solar Windows)
GERN and LCTX are leading edge biotechs that have been working on innovative treatments for so long that I wonder if that edge is blunted. They both are expecting (but not guaranteeing) commercial availability of their respective treatments within a few years. Six months have passed and neither stock is acting as if profitability is near. Within the next six months?
MVIS now has an unasked-for label of being a meme stock. I’m considering writing a book about MVIS (I’m a writer, in case you haven’t guessed), but I don’t know if the story will be a tragedy, a comedy, a celebration, a case study in business colleges, or some combination of all of that. With the right and accidental mix of publicity and progress the stock went from $0.15 to ~$30.00, but now is back to under $5. Ah, but they have progressed from suggesting good news within 2-3 years to 6-9 months, still.
WNDW has an innovative solution to solar power: transparent films that turn windows into solar power producers. Many buildings have more surface area in windows than they do in exterior walls or even in roofs. Office buildings are naturals. Greenhouses are an extreme example, and can help growers gain additional income. But the stock hasn’t reliably moved. Yet?
SOLO is the name of the stock and of the three-wheeled electric vehicle that is now for sale. Perhaps it is too early to get reliable sales numbers. Maybe they aren’t selling. Maybe they are and we don’t know. Maybe they’re too innovative. Maybe they’re an early entrant into the next phase of personal transportation that moves beyond the 1950s’ dream sedan paradigm. Maybe. We should know more within the next six months, especially as their higher-capacity factory starts up.
Currently, my portfolio would barely buy me a new car after income taxes and sales/excise taxes. MVIS alone got close to enough to buy me a tiny home on a large plot of land as long as I didn’t mind living off-the-grid in either a tsunami zone of a wildfire zone.
MVIS’s been there before, and there was logic behind it possibly going much higher. GERN could help treat blood disorders/cancers. LCTX could treat some eyesight issues (a type of macular degeneration) as well as regrowing nerve cells for accident victims. WNDW’s solar panels could be a phenomenal market by simply covering a small fraction of the world’s windows. SOLO’s solo car could be the start of something big by selling something small.
Yeah. I have good to great hopes for my portfolio’s performance.
Sigh. I also have decades of experience demonstrating that predicting the future is a silly game.
Shrug. One way to make money in America is to invest. There are no guarantees. The odds are better than the lottery, though the jackpots tend to be smaller.
I have that opportunity thanks to prudently hanging onto 2% of my portfolio as and after that perfect storm hit.
It is time for the weather to change.
My personal finances outside of my portfolios also elicit encouragement, but those are outside the scope of my semi-annual portfolio review. That story will be chronicled, as usual, in the rest of this blog. For more details about the stocks, here are links to various discussion boards where you can find my synopses, as well as others’ points of view. For more details about how I do what I do, there’s a book that I wrote at the request of several friends: Dream. Invest. Live. Maybe you can help my personal finances by buying a copy – though the frugal part of me recommends checking one out from a library.
The following links are to various 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. 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 (widest range of boards)
Motley Fool (oldest boards, but also the quietest)
Silicon Investor (also older boards, but populated with informed investors)
Reddit (many will cringe, but there’s impressive quality within the impressive quantity of posts and voices)
PS from July 5, 2022: For those who don’t have access to the discussion boards (or justifiably don’t want to wade through the trolls), here’s the content that I shared on the boards on June 30, 2022.
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.
Geron
GERN (market cap is $0.585B was $0.393B)
Geron is a leading edge biotech firm that has been hanging on that edge for at least as long as I’ve owned the stock (since 1999). Their primary focus has been reduced to telomerase and blood disorder treatments, ala Imetelstat, after having sold off other divisions to raise funds to continue the work. Though long delayed and anticipated they have finally reached Phase 3 for at least one of the treatments. They expect results early 2023 after which they plan to submit the drug’s application to the FDA. Commercialization could happen as early as 2024. That schedule is aided by Imetelstat’s Fast Track and Orphan Drug statuses.
This journey has taken so long that it is hard to believe it is near. Is their leading edge blunted? That heritage may also partly explain why there doesn’t seem to be a surge of interest. There is some renewed interest, but not what I expect from a biotech about to enter commercialization. Who knows more, the current shareholders or the reluctant ones?
DISCLOSURE LTBH since 1999 and continuing to hold. I bought more when they mentioned specific years for clinical trials and approval goals.
Lineage Cell Therapeutics
LCTX (market cap is $0.268B was $0.413B)
Lineage Cell Therapeutics (LCTX) is a leading edge biotech company working in several programs. Particularly interesting for me are two: repairing spinal cord injuries, and treating a particular ‘dry eye’ condition. Lineage’s stem cell work has competitors, but few (if any) have reached commercialization. Because they are working on unmet needs, like regrowing nerve cells, it is difficult to properly value the company. It is easy to imagine, however, that regaining mobility or alleviating blindness would be welcome, appreciated, and compensated.
As with other leading edge biotechs, the FDA’s conservatism can delay the process, at the same time that public demand can try to accelerate it. While Lineage is still in Phase 1/2, not 3, it can seem that commercialization and treatments are far off. The stock’s response to the company’s performance may have its own timing that can kick in without warning.
DISCLOSURE LTBH by habit, but having to remember that my LCTX/BTX holdings came from AST (2014) which was spun off from GERN (which I’ve held since 1999). I hear patience pays, but it is easy to have doubts after twenty years of waiting.
MicroVision
MVIS (market cap is $0.634B was $0.822B)
Oh, MicroVision; will it be yet again another 6-9 months, or 9-18 months, or longer?
MicroVision is a electronics sub-component manufacturer that is finally getting products to market for significant customers (Microsoft HOLOLENS) after decades of failed attempts. The company’s key technology is a mirror-on-a-chip (MEMS) that can be oscillated to capture, produce, or capture and produce images in visible light and adjacent wavelengths. I see them as having the potential to disrupt the laptop market as significantly as the laptop disrupted the CRT market. Ironically, their method of creating an image is similar to the scanning method used in CRTs.
MicroVision should be a case study in business schools. Great potential. Too long gestation. Shifting business targets and markets. Unprofitable despite decades of effort. The company is in possibly its best financial condition, partly thanks to management’s response during a recent buyout conjecture, meme status, and short squeeze. This year’s focus is LiDAR for autonomous vehicles; but word of displays, home automation, and various NDA work continue.
For even more details, follow my blog’s tags for MicroVision and MVIS, which reach back a decade.
https://trimbathcreative.net/tag/microvision/
https://trimbathcreative.net/tag/mvis/
DISCLOSURE LTBH since 1999 (though the very first shares are gone). Dilution no longer means that I have more than enough if the company finally succeeds and the stock reaches the heights I think are possible. I doubt I’ll buy more because of the rest of my financial situation, and intend to hold until much higher price targets are reached.
SolarWindow
WNDW (market cap is $0.152B was $0.171B)
Solar Window is manufacturing thin film coatings that are transparent allowing windows to act as solar panels. The advantage is particularly useful on buildings with lots more windows that walls; e.g. office buildings, greenhouses, etc.
The company is already in production. Considering the current energy situation, they may be coming to market at a good time. Despite their potential, they don’t seem to be getting much attention in the stock market. These next few earning reports may show whether there was a flaw in the business model or an oversight in the financial markets.
And then WNDW moves without any reason. A utility sector thing?
DISCLOSURE
Usually LTBH but only bought in recently because another of my stocks was bought out (just as they were becoming profitable). I bought in to redistribute the funds and increase my diversification.
Electrameccanica
SOLO (market cap is $0.160B was $0.262B)
Electrameccanica is a innovative electric vehicle manufacturer building and selling a three-wheel car aimed at the way most people actually use their cars: single occupancy commuting. They also have plans for other innovative electric vehicles, but for now the focus is on proving the value of their approach through sales of SOLO, that three-wheeled vehicle.
There is significant interest in electric vehicles, and a greater willingness to consider new ways of getting around. Risk and reward in play.
DISCLOSURE
Usually LTBH but only bought in recently because another of my stocks was bought out (just as they were becoming profitable). I bought in to redistribute the funds and increase my diversification.
Trimbathcreative's Blog (Tom Trimbath) 