Recent trades

At the end of September Roku dipped below $100 and two lots of 50 shares were purchased at 98.90 and 99.13. The intention was to trade 100 shares out on a rally, so perhaps a sale will follow soon.

My Zoom holding was also doubled buying 150 at 74.97. While Zoom has a long runway and very high valuation, it would be a shame to miss out on the disruption of the video conferencing space worldwide.

You may remember that Snap provided a profitable trade over the last quarterly figures. Now analysts are becoming a bit more bullish, yet the share price is weak again.
So I bought 1000 @ 14.31 early October. Not sure whether this is another trading opportunity or a longish term holding. Can’t make head or tail of their Snapchat app but apparently it has appeal to millennials and might start making money soon.

Adding on weakness

The US tech sector has been weak of late, so a couple of holdings were increased.

Added to Slack at 25.43 and Mongo DB at 126.56. Both closed lower, but time difference prevents me from dealing in the afternoon NY time. Both of these companies have a long runway, but neither are affected by the present trade war between the US and China. The same applies to many high growth US tech stocks and good numbers should continue whether or not there is a recession in the US.

On the consumer side Roku enabled smart televisions are to be sold by Walmart under their own brand which is usually bargain priced. If there is a recession, I think more people would cut the cord and move to the cheaper internet alternative. And Roku now has its own output (with advertisements) for free, so user numbers should continue to grow even if subscription channels like Netflix experience a period of slow growth given the competition from Disney and others. All the subscription channels are available with a Roku TV or box.

Early September trades

I finally sold out my remaining position in Premier Oil. The holding has moved in and out of profit, so pleased to take a gain of 10p per share.

Roku has continued its upward path, so reduced a bit more at 167.43. This is still my largest holding, but it never hurts to take some profits along the way. The cash went into a new holding of Workday (WDAY) at 175.16, and as there was adverse reaction to Slack’s first earnings statement since it became a public company I was able to double my holding at 26.6.

Alibaba (BABA) has just announced the acquisition of another Chinese e- commerce company for 2 billion dollars. Kaola will strengthen its position in the growing Chinese import e- commerce market which is still in its infancy and offers good long term potential as standards of living continue to rise in China. Initial market reaction on Thursday was good, but the stock ran into profit taking Friday.

End August Review

August has been dominated by the ‘so-called” trade war with China in the US, and Brexit in the U.K. So it is hardly surprising that equity markets have been choppy.

Looking at the US holdings, the best by far has been Roku, up from 103.33 to 151.36. My new holding of Mongo DB rose from its purchase price of 142.83 to 152.31. My new holding of Slack fell from its purchase price of 30.67 to 28.64. Most other US holdings recorded small price movements, apart from Nokia ADRs down from 5.41 to 4.96 and Snap ((watch list holding with a view to repurchase) down from 16.80 to 15.83.

The U.K. market was generally poor, as I suppose international investors were selling. I think that Bango was the only riser, up from 124.5 to 129.5. Prudential were surprisingly weak, down from 1698 to 1368, and Superdry were down just under 10% at 395.4. Of the relatively recent investment trust purchases, Smithson held on to most of recent gains at 1256 and Fundsmith Emerging were down just over 4% at 1140 (not forgetting NAV which also moved down to 1263)

I will be looking to make further changes as opportunities come along, as I still own funds and equities that give cause for concern.

The biggest takeaway from recent movements has been to stick to an irregular rule of investment – “find smart people”. One from years ago is now retired, another from a few years ago has been dropped because I don’t like short term strategies on spread betting with stop losses. So I’m left with two – both of whom are a lot smarter than me.

Started a holding in Slack (WORK)

I mentioned that I had placed Slack on my watch list after the stock was listed a few months ago. In the event early prices up to 39 or so looked a bit too high for comfort.

I followed the price down to 30 at the close of last week, then saw a couple of articles about institutional purchases by Yale and BP Pensions over the weekend.

So I bought 400 at 30.67 shortly after yesterday’s opening – this starts a holding – like Mongo DB not a big position as yet.

Switch amid the turmoil

If you remember, Roku were about 103 at the end of July. During early August the upward momentum resumed. My shares are owned within two funds, and one fund has already reduced. So now it was the turn of my pension to reduce, as the valuation exceeded 10% of this fund. So I took a profit on 100 shares at 132.82 yesterday.

I was also looking to start a holding in Mongo DB, so I bought 100 of these at 142.83. Don’t actually know too much about Mongo’s software, but I’m told the stock is worth owning although averaging up or down will most likely be needed to put a holding together.

As regards Roku, this remains my largest holding – and I have been happy with the product too.

There has been market turmoil so far in August. As it is the holiday season the office juniors are in charge of the funds and markets. So do not be surprised- the stocks do not know that you own them.

End July update

Let me first tell you about my end month trades. Vodafone were down in the dumps but suddenly improved to just over 150p, so I sold my ISA holding at 151.29 p which gives a profit – put into ISA at circa 139p earlier this year. The improvement was put down to a merger of cell tower businesses in Italy and I am unsure about the effect of 5G on towers.

The other trade – in my ISA – was a purchase of Fundsmith Emerging Equities Trust (FEET.L) at 1195.25p. This is a small trust – market cap about £318m – standing at a discount to nav of approx 1300p. Not a great performer to date, but an internal change of management responsibility could be helpful.

Looking at month end prices, the main improvement came from the US stocks. BABA 173.11, NVDA 168.72, MSFT 136.27, SCHD 53.95, VIG 117.73, NOK 5.41 all up modestly and ROKU 103.33 up about 12%.

Despite the weakness in sterling to around 1.2120 today, UK stocks have had a much more difficult time. Improvements were seen in Smithson I T 1272p, Bango 124.5p, and Premier 84.04p. Prudential 1698p, Superdry 433.2p, and S4 155.5p were all down. Some stocks that I either used to own long ago or was thinking about before bad news came out have been very poor. Just look at the charts of Centrica and Metro Bank !

My watchlist includes SNAP 16.80 where my initial trade did well, and Slack (WORK) 33.42 while my cash position is about 20% on PA and 8% on Pension Fund.

Premier Oil /Roku

Did I tell you that I split my original Premier holding between two funds back in March. ?I used one fund for trading – and took a short term profit here – then bought back at an average price around today’s level. As this second trading attempt has pulled back from loss making to break even I have once again sold this part of my holding. That leaves the other half in my longer term fund, where the exposure is less than 3%. It also leaves the trading side with a nice overall profit on the two trades since March.

I am also wondering how the Roku share price will react to the next quarterly numbers due early August. Roku remains a pure streaming play – the only other one is Netflix who will need to spend more on creating content now that competitors are removing their toys from the playpen. The next wars will be all about content and getting people on the hook with low starting subscriptions, which should not harm Roku’s user numbers. However ARPU cannot be expected to rise while there is intense competition for new premium channel subscribers.

Some thoughts on Tech and a quick turn on Snap

Let’s start with Snap. When I bought the market cap was around 19.4bn dollars. A few days later this had risen to 25 bn after some promising user data was announced. The business is unprofitable and will remain so for a time, so I thought it best to take a profit at 18.03. That gave me a very quick return of 28%. I will watch and wait for any sign of testing of new support levels as I may buy back on a correction.

The enormous valuation on Snap got me looking at some other media valuations, and was surprised to see that Roku is valued at “only” 12.57 bn at present.

The tech boom is centred on US markets, because these have the largest concentration of tech stocks on the planet. Compare and contrast with the U.K.- where the decent tech companies like Arm Holdings ( now owned by SoftBank) are no longer investment options. The standard of analysis in the U.K. is also appalling – wise to assume either short pants or not up to the job – they can copy stuff about Amazon, Microsoft, and Alphabet from the companies own website information to investors, or plagiarise US analyst reports.

As readers will know I have a small holding in Bango, where the share price has been all over the place this year. The price has improved recently- giving a market cap of £92.7m (USD 115m). The best way to describe the business is that their audiences double revenues from the 5% of cellphone users who deliver 80% of app developer revenues, and they have contracts with all the major players who provide the apps to download. They were followed by an analyst at Cenkos – the company’s broker – who produced a forecast in March that was clearly wrong – or so thought Investors Chronicle ( U.K. Barron’s equivalent). But we had to wait until updated figures were available in July for action – Cenkos were sacked and later withdrew their forecast, and a new broker appointed .My problem with this is that if an institution was given a new mandate to manage – including a Bango holding – between March and July – they would have relied on Cenkos research and institutional salespeople to decide whether to retain or sell, thus creating a false market in the shares.

Although it will not make huge profits anytime soon, Bango has also moved into profitability this year, and the business seems to be growing at a fast pace. As it is a small holding and a small market cap I will let it run.


Bought SNAP

After doing and reading some research over the weekend I decided to buy a holding in SNAP, the owner of SnapChat. The price paid was just under $14.09.

I had not really looked at the company since early last year when it was recommended as a chart buy at $17.50 just before the price started to collapse. I downloaded the app and had a look around, and in my opinion it looks well suited to the 13 – 35 age group target – where it is claimed to have reach of between 75% and 90%.

As some quarterly figures are due later today, and the stock has high volatility, I did not buy a full unit – as valuation remains high and the kind of improvement that I am looking for in the business will be a slow process.