Thread by @Melendhar

Portfolio update

Part 1 - COMMODITIES

#THS remains in portfolio as my biggest holding. I believe the company should do well within the next 2 years, its highly cash generative & once the current chip shortage is over, margins should slowly keep going up in line with PGM's /1

(not that they are bad atm)All gains from this investment have been recently wiped out, but its a conviction play and I would be extremely surprised if sp stays at current level for longer. A quick twitter search should highlight opportunities/financial aspects of the business /2

I have missed most of the massive gas rally, only having exposure through #RDSB #BP in family portfolio, but missing my entry in SQZ which I have been watching for a long time. Although the gas rally exceeded all expectations, I can only blame myself for not paying closer /3

attention in the last two months. Sadly partially due to long sickness. With coal & oil also on the run to new 52w highs, there might be still some good money to be made (without having to FOMO at the top, which you wouldnt want to do). #GKP seems to offer the best risk/reward /4

in o&g at the moment (imho). Wife has some shares, I wouldnt mind buying too (on any bigger dips).

Interesting couple of conversations i witnessed recently - about not going in heavier in shares that performed well. I thought i share some thoughts on this:

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Please keep in mind that none of us knows the future, investing imo is more about having a system/strategy in place and following your plan. In the long run, IF YOU FAIL TO PLAN, YOU PLAN TO FAIL. And it doesnt matter if a share price went up a million % or went down. /6

Obviously yes - making money is the ultimate success indicator, but I personally dont look at my gains/losses through the perspective of how much i made/lost. Whats more important to me is - If i executed my entries/exits based on my strategy? Was it a rational decision at /7

that very moment? Based on the info I had about the company/market? Always easy to talk about investments in retrospective. "Should have added more / should have sold earlier". I see plenty of investors on Twitter who have excelent calls, but often end up being unlucky /8

(external factors) & plenty of punters putting money in shite companies and being congratulated by newbies for making money, just because an RNS came out that no one (including them) expected. Watch who you follow. /9

Portfolio update

Part 2 - CRYPTO (rant?)

A lot of excitement can be felt in the crypto industry again- I dont think I would want to be "all in" in this space, but having reasonable exposure (reasonable= different for everyone) could offer big opportunities in the next two Q /10

I decided to be with "one leg" in.
I kept adding to my #ARB position in the last two weeks & its now my second biggest holding, sitting at around 10% of portfolio across accounts. Position is at a small loss as of Friday close, but im not concerned. /11

I also intend on buying shares of a couple of competitors to spread out the risk (up to another 10% of portfolio max) & there is a rason why.
I always considered Argo to be the best of the best across the crypto mining industry, with the CEO (Peter Wall) being very responsive /12

&trying his best to listen to share holders. He was buying shares when the company was at 3p and everyone was complaining that he doesnt own any; he has drastically decreased admin expenses (was a big thing in my book) & always talked during our calls about the downsides/risk /13

& being prepared for the worst. In the meantime competitors just kept raising money, having massive expenditures (interestingly i have not seen a single analyst picking up on this) and blindly buying machines without any conideration on the $ spent. Whats worse /14

this reckless strategy (or lack thereof?) combined with the chip shortage and everything else that happened in the last 12m, has given the bigger crypto-mining companies an edge, as they ended up accumulating a considerably higher Ph/s rate than #ARB. Annoying, as its /15

an example of how dumb money outperformed (at least temporarily) a sound plan/strategy. Whats also worth noting was that Argo tried to play open cards, giving investors good insight into the operations, margins etc, while most of competition - quite the opposite - as little /16

info as possible,only talking about numbers if the data was positive (or they have been forced to) Investors blindly ignored this & funnily enough, whats more - it partially backfired as I have seen plenty of abuse towards Argos management when things went not as planned /17

I observed a lot of childish behaviour instead of constructive feedback.
As an investor always keep in mind if you would prefer shareholder engagmenet in line with what Argo was doing (video explanations of most RNS, regular twitter Q/A sessions etc) or being pissed at, /18

like its the case with most other stock listed companies, where the management often doesnt even bother replying to your emails. Act accordingly and behave like adults.
But my sidenotes aside & back to the main point- we are in Q4 2021 now and there is a realistic chance for /19

an extended #btc bull run, accelerating in the next months and the companies with the highest mining output (Q4 & Q1) & the biggest HODL (to Mcp) will generate higher returns for investors imho. So its worth looking not just at Arb but a few other names for reason ment.above /20

Portfolio update

Part 3 - RISK

Terrible price action in #DDDD - luckily its more of a punt than a proper position for me (now over 25% down i believe). News needed to put a hard floor on the falling share price. I dont intend on selling at a loss, unless /21

future newsflow disappoints. Worth noting that as it is the case with 4D Pharma - there is nothing really stopping a non profitable business from going all the way down once sentiment changes. Many other (profoundly more richly valued) nasdaq/meme shares spring to mind /22

I have maintained a high cash position in portfolio since February. I dont feel fully comfortable being 100% invested looking at current market conditions (as has been also the case back in Feb) and do expect that this "everything bubble" will pop at some point earlier or /23

later. Not necessarily in the next couple of weeks (might as well end up being a couple of years from now) but I see way too many people only looking at upside and ignoring risk. Would you play russian roulette with a 25% chance of getting killed? /24

I imagine not & using this as an analogy, even though odds might be in our favour, I would rather be careful to not have my account blown to shreds just because I ignored the bigger picture & what is happening across the world /25

Sadly in case of a global crash / bigger than average correction Im fully aware that my portfolio will also get affected, but my biggest holding is a company with a p/e ratio of 2-5 (depending on changing commodity prices), so it would be more of an annoyance /26

- more time needed to go back to a fair valuation. I mitigate this risk by having cash at hand to at least partially benefit in case if a crash does happen. This also makes me sleep easier at night, even though my portfolio allocation is far from perfect. /27

How would the perfect distribution look like (from my perspective) ? More or less like this atm:

1/3 commodities
1/3 crypto
1/3 cash & trades

Have a good weekend

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