Weekly Update, May 28, 2018

The Actions Taken (last week’s plans)

  • Covered 3/4 of my short position in MWA for minimal gain – did not want to hold the full position over the long weekend.  The resiliancy of MWA run after earnings has been a surprise,
  • Traded in and out of ACBFF and CRON for ~10% gains; still hold small position in each as in my ‘big 4 Canada Weed’ stocks
    • One comment on ACBFF – my sale was really broken up into small lots (<100) … for most of the day, this and its cousin, APHQF, trade in small lots with larger trades coming in the last 10 minutes or first 5 minutes of market.  Taking large positions >500 seems like a liquidity risk and i will focus mostly on CRON and CGC to see if liquidity is better.

The Clues this Week

  • Equity / Stocks
    • A couple of posts on Canada Weed companies this week here a bit helpful, especially the second on on the different province-level legal structures for retail distribution
    • https://seekingalpha.com/article/4176516 – From one of the better technology analysts on Seeking Alpha, a review of AAPL.  While his take on AAPL is worth the read, his methodology is even better.  Thinking of DCF as a floor for some companies is an interesting approach, but for me i would want to include a larger set of DCF methods like https://finbox.io provides.
    • https://seekingalpha.com/article/4175850-american-gridlock – an often read author posted something that is a bit political and may distract people from the key message – the next cyclical downturn in US economy will be different than anything post WWII given the structural changes to demographics, economics, jobs and government social safety nets.
      • Actionable take-aways include:  a) Non-US investments (Canada, China and India are my current targets); b) high quality corporate debt (Apple, Berkshire, Microsoft); and c) multinational companies w/ global product / services reach, and d) small US companies with superior products / services (IOTS is an example).
    • https://seekingalpha.com/article/4176193-pattern-energy-group-go-wind-blows#alt1 – A good valuation study on PEGI.  I am over extended on PEGI in several accounts.  My goal is to collect the dividends for the intermediate term as i do not see material downside risk to capital ($17.00 would be an extreme macro event imho), and closer to end of year can make better tax management decisions on the range of positions.
    • S&P week was quieter than last week
    • A very busy ‘news and data’ week; ISM and jobs will be the ones most likely to spark irrational movements 
    • Jeff Miller’s weekly indicator set is interesting – look at 10yr, SP and inflation expectation 
    • https://seekingalpha.com/article/4177534-bristol-myers-squibb-one-stock-ignore – Here is an example of why i cannot confidently invest in Pharma companies (even though i have small positions in JNJ and PFE)
      • This is NOT to knock this author.  This is to suggest that i just do not understand the Pharma business well enough to form strong opionions (that can drive investment decisions).  I have also yet to find a Pharma author that simplifies this sufficiently.
      • While BMY may be a great investment, i just cannot bridge my ignorance to make that call w/ conviction.
    • https://seekingalpha.com/article/4177567-place-like-cone – Brad Thomas on CONE – while the data center REITs fit within my IOT narrative and i was once interested in them as growth vehicle (ala Brad), i find that risk to that assumed growth is greater than i want to take on w/ REIT investment.
  • Debt / Bonds
  • Automation and Robotics

The Plans for Next Week

  • Specific Analysis
    • Water component makers is next deep dive for possible new (revisit) narrative – XYL, PNR, ITRI, BMI and MWA are the current list
  • Actions Set Up
    • Weed Trades – CRON (holds support @ $5.90), ACBFF (holds support @ $6.20), CGC (unclear on patterns after NYSE listing)
    • Tech Trades – CLDR, FEYE, IOTS and CY
    • Investments – TU, RCI (value entry points not fully discerned – patterns still being understood)

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