It’s been almost a month since I started this blog, and I’m happy with the views I’m getting and the interaction from my fellow investors. I figure it’s about time I went over how I’m feeling about my investing results. Of course everyone can see my portfolio, usually updated daily, but I’ll go over each position so you can get inside my head a bit. I’ve already written a much more detailed analysis of each company mentioned below, feel free to look them up.
I’ll start with the big red elephant in the room: Chesapeake Energy (NYSE: CHK). I’m writing this just after listening to their Q2 conference call, on Wednesday, August 5th. The call didn’t really give me much new information to work with. The company is lowering costs, increasing efficiency, etc… They’re trying to improve their balance sheet, and might sell some assets to do so, but reiterated that they won’t have to dilute shareholders to keep afloat. There was some positive talk about a new pipeline coming online in November that will allow gas from their Utica interests to be sold for better prices in the gulf coast, for export. A few weeks ago the company cut the dividend as well. I see that as a positive. I didn’t buy the stock for the dividend it provided.
The basic story here is the same: can the company survive this low commodity price environment? I still think they can. When prices improve, Chesapeake should be very well positioned to take advantage of it. I have 2 buy points in this company, at $15.17 and $12.30. I have a limit order in at $6.25. With the price currently at $7.03 and falling like a rock, all indications are that my order will be filled and I’ll soon have an average price of about $9.50. I was well aware that this was something I’d be holding awhile to see returns on. With hindsight of course I wish I’d waited before jumping in, but I’m comfortable with my position.
I’m happy with my position in Daktronics Inc. (NASDAQ: DAKT). It’s up about 14% on my small initial buy. I had no near term catalyst for this to rocket up (not that it has), and planned to simply accumulate some shares of a great company in a growth industry. Nothing has changed; if it goes significantly lower than where I bought it, I’ll pick up some more. My limit order is for $8.30, but that’s probably wishful thinking.
First Solar, Inc. (NASDAQ: FSLR) reported earnings this week, and things seem great at this company. They earned 93 cents a share, while the analysts were expecting 36 cents. This position is up about 14% as well. Great bookings out to the end of 2016, improving technology, improving cash position, just about everything I wanted to hear. And it seems that their position in 8point3 Energy Partners (NASDAQ: CAFD) is going to be very beneficial to them. I REALLY like this company. I bought in at $45.50, and it’s now at $51.92. If it runs up to around $60 on the back of this great quarter I might consider selling, then hope for a pullback to get in again. I wish I’d bought more, but it didn’t come down to my second buy point. Hopes and wishes, perhaps not the most effective concepts in investing, but I’m sitting pretty on this one!
I bought Constant Contact (NASDAQ: CTCT) and Mattel Inc. (NASDAQ: MAT) very recently, and they haven’t done much. Ok, Constant Contact is up 10%, and that’s great, but it’s probably going to be pretty volatile, so that doesn’t really mean much. Mattel is essentially unchanged. I have orders in to buy both at lower prices and would be happy to get them.
I’d like to take a moment to talk about some of the responses I’ve gotten to this blog. I’ve connected with a few like-minded investors, many through StockTwits.com (http://stocktwits.com/StockPickingBartender), some through a few other places, and I love discussing all this with them. I personally know very few people who I can talk about investing with. “You have a blog about the stock market? Ya, ok, I’ll look it up. Hey did you see that pitch/catch/hit/goal/whatever?” Always feel free to comment or message me, I love it.
A few people have asked me: why bother? Why bother writing up a detailed analysis of a company if you’re only investing $375 in it? Or even if you follow your plan and buy in 4 times, you’ll have less than $2000 bucks in the company. What’s the point?
I understand the question, really. Say I invest a thousand bucks in a company and it doubles, or maybe it goes bankrupt. Either way, I only gain or lose $1000. Chump change right? Well, not exactly, but certainly not life changing. When I’m 80 I won’t look back on it and think that thousand dollars had any real impact on anything. So WHY bother?
Because while I’m starting small, I don’t feel as though the amount invested should have any impact on the process. I’ll still need to do the work involved in buying, owning, and selling a position, no matter the size. I feel fine making these small investments while keeping the majority of my trading account in cash. I happen to LOVE cash, and I’ll keep adding more to my account. Eventually I’ll be at the point where my initial buy will be $2000 instead of $375. It might take awhile, but I think I’ll be happy to have had the experience of smaller investments to build upon.
And as far as writing a detailed analysis for anyone to read… I love to write, and it helps me think about what I’m doing. Not only am I showing others what I do and how I do it (good or bad), but it’s like opening the process up to myself. It’s a Zen, flower power, ‘pass the dutchie ‘pon the left hand side’ kind of thing. Thanks for reading, and good luck out there.
As always, feel free to look at my portfolio and see how I’m doing. And please READ MY DISCLAIMER. Make your own decisions, do your own research, and never rely on any single source for information. I am not a financial professional; do not rely on me as such.
Michael, the Stock Picking Bartender