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MengXi
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University of Waterloo engineering student.
  • Portfolio Update - Oct 2013 0 comments
    Nov 4, 2013 11:34 PM | about stocks: Q, FSLR, BBRY, SZYM

    Between midterms, assignments, and interviews, I finally found some time to do another portfolio update.

    A lot of interesting things happened this quarter and I will discuss in much more detail.

    With the Blackberry debacle, I realized I was in the same position 2 years ago, down significantly with no end in sight. With Blackberry losing corporate customers due to its recent management sell out, its a dire situation of what earnings would look like next quarter. My position in Blackberry all started with a small speculative position betting on a buyout of Blackberry due to its depressed valuation. In addition I wrote a cash secured put option (which in hind sight was a big mistake) putting me in exposure to over 400 BBRY shares. Now I realized the juicy premiums from a put option is highly leveraged and can be very costly. With the $9 buy out offer from Prem Watsa, I made another bet the deal will go through, and wrote another cash secured put option even further out of money. Again hind sight was 20/20, wall street did not believe the deal would go through, and pumped out all kinds of articles to cook up the bidding process. Let this be a lesson to myself so I don't look like a fool and be tricked again.

    Now move on to First Solar. First Solar had great earnings due to early revenue recognition. However due to higher gross margin predictions, the EPS number actually increased to the upper range of previous guided numbers. This led a huge run up in the broad solar sector and FSLR is now trading at over $60 a share. This is where I admit defeat on how to properly value a stock. I thought FSLR is over valued at $55 a share since I can purchase WMT at a similar price even though WMT's earnings were much more stable. It doesn't look that way as FSLR is now trading well above that level, perhaps due to optimistic projections about future earnings potential. All in all, the broad rebound in solar spells a really positive trend for the environment.

    Moving on to GT Advanced Technologies. It rose dramatically after hours after its partnership announcement with Apple. With multiple expected revenue sources in the future, it rose high into $9 per share mark. Again I held GTAT until it hit $7.5 expecting an announcement with either Apple or Samsung, little did I know such announcement has a much larger impact on share price.

    Moving on the portfolio summary,

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    For simplicity sake, this month is very bad for me as my gamble on BBRY went horribly wrong, as well as made bad decisions on proper valuation of GTAT and FSLR. Currently I am making another big bet on SZYM where I hold an aggregate of 560 shares or roughly $6000, stay tuned for Tuesday. You win some you lose some right? Hopefully tomorrow night won't be too disappointing.

    In summary,

    Wall street did not believe the Blackberry deal would go through, and pumped out all kinds of articles to cook up the bidding process.

    Same goes for the BB10 sales, the sales were very disappointing but numerous pieces beforehand suggested a blow out sell.

    Sometimes its best not to invest in these popular names as they are often subjected to manipulation and I am definitely not the smartest guy in the room.

    Stocks: Q, FSLR, BBRY, SZYM
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