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Why I Took Profit on Nvidia's Stock-Split?
Why I Took Profit on Nvidia's Stock-Split?
Balancing parenting and investing, I navigated a significant shift in my portfolio by taking profits on Nvidia at its peak. Read on to understand why I made this move.
Was it Father’s Day last weekend? Honestly, I can't remember. My head was buried in teaching my kids advanced math for their selective school exams. Can you believe that at 9 and 12 years old, they’re grappling with concepts like taxation and compound interest? It’s baffling that these are crucial topics for exams, yet they’re not adequately taught in schools. This leaves parents like me playing the dual roles of tutor and cheerleader, navigating the maze of education one complex problem at a time.
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But let’s get back to the burning question: why did I take profits last Friday? If you saw my tweet three days later, it might seem a bit confusing. So, let me walk you through the 1️⃣changes in my portfolio, 2️⃣ the three reasons why I decided to sell and 3️⃣ what my plans are moving forward.
1️⃣ Portfolio Changes: Before and After
Before (start of May 2024)
After (start of 7th June 2024)
Key Changes:
What Has Been Sold:
MSFT: No longer in the latest portfolio.
GLEN: No longer in the latest portfolio.
PDD: No longer in the latest portfolio.
No I did not sell any Nvidia stock. I am adjusting to own more!
What Has Been Bought:
AVGO: Increased from 8.71% to 11.52%
Top Three Notable Increases or Decreases:
NVDA: Increased from 19.78% to 24.03% (notable increase of 4.25%).
UBER: Increased from 10.74% to 12.13% (increase of 1.39%).
AVGO: Increased from 8.71% to 11.52% (increase of 2.81%).
Cash Holding Changes:
Cash: Increased significantly from 6.40% to 12.16% (increase of 5.76%).
Summary:
Sold Holdings: MSFT, GLEN, and PDD have been removed from the portfolio.
Increased Holdings: Significant increases in NVDA, AVGO, and UBER positions.
Cash: There has been a significant increase in cash holdings, indicating possible profit-taking or preparation for future investments.
2️⃣ Three Reasons Why I Sold
1. The 45% Surge in Six Months
Imagine this example: you start with $100,000, and six months later, you're staring at a $45,000 profit. It’s like discovering your favorite coffee shop started giving out free lattes with every purchase. Nvidia’s meteoric rise was the fastest growth I've seen in nearly two decades.
Now, don't get me wrong, I'm not predicting a market crash. I just prefer to secure my gains now rather than gamble on an even higher rise. It’s about locking in profits when they’re at their juiciest. Yes, I know it might seem like I’m timing the market, but hey, even if my last few tweets suggest a bit of market clairvoyance, timing is tricky business—better left to those with crystal balls, not mere mortals like me.
2. Cash in Hand for Political Bonanza
This summer is poised to be a political circus. We've got the UK elections, a potential snap election in France, shifts in the EU parliament, Modi’s power potentially waning in India, and the usual drama of the US elections.
Having cash ready for this volatility is like having front-row tickets to the greatest show on Earth. Sure, some might call it gambling, but I see it as an educated risk. The currency markets will be on a rollercoaster, offering opportunities left and right. So, keeping some cash on hand isn’t just practical—it’s thrilling. It’s not for the faint of heart or the everyday family investor, but for me, it’s where the excitement lies.
3. Refocusing on My Top Five Stocks
Looking ahead, I believe the market might climb even higher by Q4. This means it’s time to focus on my big bets: Nvidia, TSMC, AVGO, Uber, and HOOD. These are my top five stocks, and they each have a compelling narrative.
The three AI stocks are screaming "undervalued," and I want to ramp up my exposure. Meanwhile, Uber and HOOD are my potential 10x performers by 2032. I’m aiming for each to help me hit the magical $1 million mark. This isn’t just a dream—it’s a calculated strategy with room for a few twists and turns.
3️⃣ Plans Going Forward
1. Accumulate More of My Top Five
I’ll be buying more of my top picks whenever the market offers a good deal. Think of it as shopping during a stock market Black Friday—lots of value to be found.
2. Option Trade Nvidia
I plan to use option trades to snap up more Nvidia shares at discounted prices during dips. It's like scoring your favorite gadget on sale during Prime Day.
3. Swing Trading Familiar Names
I’ll be swing trading well-known stocks like AMD, Salesforce, and Snowflake. This keeps the strategy dynamic and adds a bit of zest to my investment approach.
4. Focus on Fewer Stocks
I’m narrowing my focus to fewer than nine stocks, instead of twelve. This shift allows me to dive deeper into each investment, turning my portfolio into a fine-tuned, high-performance machine.
In investing, sometimes stepping back is the best way to leap forward. Never Sell Nvidia, in fact more needs to be own as AI is here to stay!
As Warren Buffett wisely says, "Be fearful when others are greedy and greedy when others are fearful." And for a touch of humor, remember, "The stock market is filled with individuals who know the price of everything, but the value of nothing."
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