What Happened in the Market (and the World) This Week?
The S&P 500 dropped 1.47% this week. Friday was especially bad with the S&P 500 dropping 0.72% which is largely due to what I think were some bank earning overreactions and maybe the fact that retail sales had another drop in December.
JPMorgan ($JPM) had a really solid quarter and handily beat EPS estimates. Even Wells Fargo and Citibank beat EPS forecasts slightly (which I guess is good since it makes the stock market less “overvalued” with more companies beating earning expectations) but these two banks missed on revenue and had some pretty dismal 2021 forecasts for net interest income.
President-elect Joe Biden revealed his COVID stimulus plan on Thursday which is incredibly generous 💸💸💸 but I guess it wasn’t enough or maybe there’s just a lot of people thinking the market is a huge bubble given how much stocks have returned in the past year despite the economy still being in the shitter.
I personally think the market is fine and with the Fed continuing to print money and keeping interest rates low. Yes, there will be volatility, but I’m not making any major changes to my portfolio right now.
News about my Stocks
Lots of news about the stocks that I own. Some notable ones:
Zoom announced a $1.75 B share offering and also announced over 1 million Zoom Phone seats have been sold. So despite diluting their stock by a few percentage points, they are absolutely crushing it with their secondary growth driver. Zoom’s stock rallied a ton this week because of the Zoom Phone news (plus they were totally oversold, just you watch in their March earnings report).
DocuSign announced a $500 M convertible senior note offering which will get rid of their 0.5% convertible notes due in October 2023 and get a new one due in January 2024 that’s 0%. After reviewing the PR, I would think this is fine and doesn’t really mean much to me.
It seems a lot of tech stocks are padding their balance sheets right now given the low interest rate environment. It’s great when you can raise a lot of cash when you don’t need it.
Alteryx and Snowflake announce a partnership and while I don’t know technically what this means, I would assume this has to be a good thing given how popular Snowflake is.
FuboTV announced they were acquiring Vigtory which will speed up their Sportsbook launch. After going from $61 to $24, it’s nice to see they’ve bottomed and are coming back. This news caused FuboTV to rally a lot.
This was Friday’s finish. It was a bad day for my portfolio and my portfolio lost just shy of 3%. However, it was overall a pretty solid week for my portfolio, finishing the week up 6% WoW and up 15.7% YTD.
$TWLO, $CHGG, $GME $TCS $ETSY $FVRR (I’m sure I’m missing a few here) all hit a 52-week highs this week before Friday’s slight bloodbath.
My Trades and Investments for the Week
According to Fidelity, there were about 46 transactions this week in my portfolio. Nearly a dozen happened after market close on Friday where I actually didn’t do anything myself, but Fidelity exercised a few of my in the money DocuSign call options ($42.50 and $50.00 strike prices) and some puts expire worthless and a $SNAP bull call spread fully paid out.
I sold a few covered calls Friday morning when I saw the market tanking, I just felt like some valuations for some stocks were just too high and I’m eager for earnings season to kick off since this can allow most of my stocks to start growing into their valuations or maybe some to come back to earth a little bit more and I can buy additional shares.
The big trade of the week is The Container Store ($TCS) where I purchased shares and bought more call options. I think I’m FOMO’ing a little bit after $GME’s craziness this week and hoping that my speculation on $TCS is correct. I feel like I’ve conducted sound fundamental analysis, which I will write about in a later post but Wall Street can be fickle. $TCS is up a ton this year already (22.43% YTD) and I was lucky since I bought most of my core position as it was starting to come back from its big fall in December around $9.50. Many people think The Container Store is too expensive (from a shopping perspective) and poo poo on the stock because of that but I’ve learned the hard way that just because you personally don’t like a stock doesn’t necessarily mean it’s a bad investment. For example, I personally dislike and don’t care for programmatic advertising and that was a big reason for my lack of investment and impatience with the Trade Desk, and that has proven to be a very costly mistake. In addition, I had a terrible experience with ServiceNow when I was at Sears and so I never invested in them, despite knowing they were publically traded and had a strong business. That stubbornness cost me a near ~10 bagger in ~5 years.
Next Week’s Plan
Netflix announces earnings next Tuesday, so I’ll be watching that since they are big enough to generally have a material impact on the NASDAQ. I’ve read that they might surprise a lot in their international subscriber growth based on similarweb data. Will be interesting and I enjoy reading their shareholder letter.