I don’t know a lot about the Chinese Cloud, except that it is a few years behind the U.S. Cloud. I still hold Alibaba, the largest participant, and now have added Kingsoft – the number 3 Internet as a Service company in China. The company has just been added to the MSCI China Index and was brought to my attention by the Smart People researching tech ideas.
My purchases of Slack were off target, so not too happy with cost in relation to the recent trading range. Suggestions of takeover talks with Salesforce then materialized earlier this week, which did not give the shorts much time to close because of Thanksgiving plus shortened trading day Friday.
So I was pleased to be able to take a reasonable profit on all my holdings. If the takeover happens I might have done better, but doubt that there is much immediate upside at present market cap. If there is no deal I will reconsider if the price goes back from 40 to low to mid 20s.
In the meantime I am happy to have the additional cash available for investment.
After reading the research I agree with my smart people that this looks a long term hold for maybe doubling. Of course there will be volatility, as people are not fully aware of the potential from cloud based communications.
I also own Bandwidth in this space.
Funny to think that the very old fashioned corporate switchboards – with lots of wires sometimes misused by younger employees – have evolved into exchanges in the cloud. Woe betide you if you don’t know your party’s extension number – there will be no help !
Telehealth issues have been weak during the past few days, so I took the opportunity to add to American Well.
Shopify has also seen a reduction in share price recently, so added a few.
At some point people will do the math on vaccinations – and realize just how long things will take to get back to something approaching normal.
So we stay mostly away from the real world
As I have seen reports about changes to tax – primarily capital gains tax – I have been looking to move investments from the real world to the tax free areas. So I moved Teladoc to my tax free account, and made a bit of room by reducing Glaxo and Morrison’s (easy to buy back in the real world). That leaves Atomera as the only holding exposed to CGT at present.
The eventual aim will be to eliminate CGT exposure on high growth possibilities. I spent most of my life listening to people with huge gains who did not wish to pay tax. Unfortunately some of these holdings – like GE and the UK banks – have crashed and burned. Nowadays tech is the only game in town, but holdings may need to be changed to keep up.
Just after the acquisition by Marvell was announced, the Inphi share price was in the low 130s. Yesterday the range was high 140s to low 150s. Now that I have Marvell on board, I have sold 50% of my Inphi position.
Many tech stocks have been hitting new highs. It is difficult to say whether prices will come back a bit or continue to rise at this point in time, but the Inphi reduction will provide funds to buy more Marvell on weakness. As $66 per Inphi will effectively become cash, I suppose the stock will provide an escape hatch for institutional fund managers who are expected to be fully invested. They just need an analyst to publish a note on the merger which covers the possibility of third party intervention.
As the takeover of Inphi by Marvell Technology contains a cash element of over 45% at current values, this will be reflected in lower share price volatility. So it makes sense to start building a holding in Marvell before completing the switch by selling Inphi and adding more Marvell. The combined company should do well I am told.
When I noticed that the U.K. is going into lockdown for a month, I added to supermarket group Morrison who have greatly expanded their home delivery services this year. I also noticed that commentators are warning of higher food prices after Brexit. This would be beneficial to profits, bearing in mind that supermarket margins are always low and would most likely be maintained.
I was thinking of increasing some American holdings, but prices jumped – so I’ll wait and see.
My online health investment so far has been Teladoc, which is acquiring Livongo. Saw a recent Barron’s article about Cathie Wood of Ark Investments – who seems very keen on telemedicine – the same view as Beth Kindig. So the very recent new issue of American Well (AMWL) looked interesting, and now that the stock has pulled back from its post IPO high, I have bought a holding to add to this sector.
Inphi, bought a few months ago, is being acquired by Marvell Technology for cash and stock. If I cash in this profit the sale proceeds could go into Marvell. There seems to be a merger boom in the semis – Nvidia is buying Arm from SoftBank – AMD is buying Xilinx – now this (smaller) deal.
Noticed that U.K. income funds – where I used to invest – have been selling big oil. Although I hold some Glaxo, I can’t get very enthusiastic about funds whose top three holdings are BAT, Rio Tinto, and Glaxo. Big oil share prices reflect how traders see the U.S. Election – remain weak under Democrats, short term rally under Republicans.
Since I bought Glaxo the price has been falling so I averaged to take advantage of the near 6% dividend yield.
Crown Castle – a U.S. REIT that owns 4G and 5G infrastructure – has also gone into portfolios now that the dividend has been increased – the dividend yield is 3.4%. The company just focuses on the U.S. unlike some competitors. As 5G phones start to be widely owned the towers and boxes are pretty essential.
CrowdStrike is a cyber security company which has had a few past successes. Cyber security is a marketplace that looks a bit overcrowded, so just started a small holding here. Speaker Pelosi and her husband recently acquired 5,000 shares costing USD 650,000 – I somehow doubt that either of them know much about cutting edge technology ! So my guess is that plenty of work will be given to the company by government agencies.
When I reviewed investments yesterday there were a few stocks that I should have bought but have now run away. As I don’t own any retailers apart from a U.K. supermarket company Morrison’s – which seems to be going nowhere – I started a holding in Shopify – one of the new generation of retail disrupters.
I continue to search for interesting investments, but they are not easy to find in this Covid world.