A Bit Of My Investing Process

Rats. Where’d that post go? I guess I’ll just have to paraphrase from memory. Expect inaccuracies. A few months ago someone online asked me if I have any ideas about which stocks will have explosive growth soon. They probably didn’t expect an answer, but we had a nice typed chat. Today, Lineage Cell Therapeutics announced earnings. No explosion, yet. It is in my portfolio. Outside my portfolio I do have a list. One of those stocks was up over 80% for a while, today. Is that explosive enough?

I won’t go into the details of my process. That’s why I wrote a book, Dream. Invest. Live. One friend half-jokingly summarized it as a ‘get rich slowly’ approach. My short version is that I look for small, simple, undervalued companies; buy their stock when they are overlooked and cheap; hang on as long as I think reasonable; and sell when the value climbs enough or dives down too far. 

For investing types, I usually screen for market cap < $2B, and frequently hold for years, sometimes decades (GERN, MVIS). I am attracted to innovative companies in markets with an unmet need, that have solutions that are positive financially and socially.

This blog contains the details of how my diversified portfolio of about a dozen stocks has reduced to five; but the short version is what I described in my Semi-Annual Portfolio exercise and review. Even shorter: GERN, LCTX, MVIS, SOLO, WNDW. 

No explosion today, and I rarely expect an explosion. I actually prefer stocks that start undervalued, may languish for a long time while the company progresses, then take months or a few years to steadily find a favorable stock valuation. Recently, it looked like MVIS had met those criteria as the stock went from $0.15 to almost $30.00 within a few months. I didn’t sell because I estimated it could quickly go much higher – based on assumptions that proved invalid. So it goes.

Google Finance

Note, my decision was based on the possible value of the company, not based on some percentage of the stock price. I haven’t repeated that analysis; but that story will probably be updated some time this year.

Lineage Cell Therapeutics is a biotech that I recently summarized as;
“…some of their proposed treatments is that they’re using stem cells (pluripotent cells?) to regrow tissues in the eye to treat Dry Eye Macular Degeneration (another long word) and regrow nerves in accident victims.” 

Successfully treating either of those conditions is something I consider very positive, and hence, potentially profitable.

Today’s earnings news was fine and within expectations. It was not explosive (a word I’m stuck on today since that person replying to my post used it.) The languishing continues, at least within the investment community. Within the company and the technical realm, it looks good to me. Keep up the good work, and good luck making a treatment that is effective, efficient, safe, and that hard-to-hit balance – affordable and sufficiently profitable.

Maybe next year.

I do, however, maintain a list of candidate companies, and a shorter list of stocks. About half the companies I follow are private, so, no stock. I can still cheer them on.

Let’s skip the suspence. This graphic holds the list.

Google Finance

Look about two-thirds of the way down and notice LUNR with a momentary one-day increase of over 80%. Looks like it was a nice one to have on my other list. Oh, well. That’s the benefit of a diversified portfolio, which I miss.

Ironically, using the term explosive is apt but maybe not desirable. It has a lunar program. Yes, out of this world; so, rockets are involved, but hopefully explosions aren’t.

There is no grand secret to creating such a list. I read. I listen. I watch. Articles, the radio (old school), and videos about topics that interest me also provide a list of innovators and innovations from entrepreneurs. If Boeing, or Pfizer, or AT&T have a solution, great, but they’re not going on the list. Adding an extra $1B to Boeing’s profits would be welcome and could nudge the stock, but add $0.1B to MicroVision and be entertained with the resulting enthusiasm – and a rapid and energetic expansion of their valuation, almost explosive, possibly.

There is no grand conclusion to this post. Sorry I wrote this with that news delayed so far. But, for me, my personal finances involve lots of possibilities and patience. LCTX announced earnings (or not), today. Progress is made. I already have shares. I’d like to have more, but I have about as much as I can afford. I also only spend as much time as I can afford. I don’t try to time those explosive moments. Getting in early means they can catch up to me, rather than me trying to catch them.

I follow my curiosity, take notes, as resources and conditions I may buy or sell but mostly hold, and wait, and wait. Most sentences after a line like that are waffle-worded: maybe, could, possibly, hopefully. Within my personal finance history of over 40 years, I’ve had enough mornings when I’ve woken up to a surprise announcement that the company reached a new level and their stock was rising 40% (several), 140% (a few), or 240% (one). These things haven’t happened sustainably recently; but I know they have happened, no maybes about it. I suspect (waffle word) they will again.

You are a different person, so your personal finances are different. I wish you well. I also hope that this very long answer to a long-ago question helps someone. Now, who were they…?

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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