Investing Update: Buying More Tesla & Shopify
What I'm buying, selling & watching
This week has sadly brought another reason for the stock market to be on shaky footing. Russia invading Ukraine has pumped even more volatility into the market. Like it needed anymore.
Since 2000 there have been 10 S&P 500 corrections over 10%. We are in the midst of the 11th since the turn of the century. After the end of the week gains, the S&P 500 now sits -8.59% year-to-date.
The Nasdaq has been in correction territory a bit more often than the S&P 500. It’s been stuck in a correction now for quite some time. This correction started back in November. Currently the Nasdaq is -13.50% year-to-date.
Expect this high volatility to continue. What worries me a bit is the size and speed in which we’re seeing these huge intraday swings. Thursday for example, we started the day down 3% and then end the day up 3%. That brings back too many memories of how 2008 was. I don’t ever care to experience that again.
I’m holding all my current positions moving forward and won’t be selling. I have no sell stop orders in. If things go down farther I plan to buy. The stocks that I own, I plan to own long term. We will come through this to the other side and the lower your cost basis is the happier you’ll be. Negativity and fear seem to always conquer the headlines. But the green days will be back. Buy in the eye of volatility.
What Hedge Funds Are Holding
The 13Fs came out for the end of Q4 2021. 13F filings are quarterly reports that are required to be filed by all institutional investment mangers with at least $100 million in assets under management. It discloses their equity holdings. Many view this as an insight into what the smart money is doing.
Whalewisdom tracks the holdings and movements by hedge funds. The five largest holdings saw some big jumps changes from the Q3 2021 rankings to Q4 2021 rankings.
Carvana (CVNA) 32nd to 1st
Mercadolibre (MELI) 23rd to 2nd
Nvidia (NVDA) 14th to 3rd
Microsoft (MSFT) 33rd to 4th
Twilio (TWLO) 39th to 5th
A Question Answered
If I’m looking to get into the stock market now that we’ve seen this large selloff, where should I start?
If I were to just start investing, I’d do what I did back when I began. I would buy the S&P 500 index. My first $5,000 or $10,000 would go into an index fund that is diversified across the 500 leading publicly traded US companies.
The mutual fund to do this with and what I own is the VFIAX. If you’d rather go the ETF route, you could buy the VOO or SPY.
Moves I’ve Made
Shopify (SHOP) Shopify sold off very hard after their last earnings report. They announced that they expected revenue growth for 2022 to be lower than the 57% they achieved in 2021. 57%! That is just fantastic growth and I’ve bought more shares.
Harley Finkelstein, the president of Shopify tweeted what Shopify has achieved.
Shopify’s stock price is back to April 2020 levels when its merchandise volume was $20 billion. Now merchandise volume is $54.1 billion. As businesses sell more, Shopify’s volume also rises.
Gross merchandise volume, the value of merchants sales flowing through Shopify’s platform, increased 32% in the fourth quarter from a year earlier to $54.1 billion. Analysts, on average, estimated $52.6 billion.Â
Shopify’s platform is for companies wanting to sell direct to consumer. If you want to sell directly to your customers, your partner is Shopify. Which companies allow Shopify to power their e-commerce website? Here is a list of the 15 largest companies, led by the largest, Tesla.
Ben Thompson who writes Stratechery just wrote an excellent piece, entitled Shopify’s Evolution. It’s in depth and very interesting on the long term outlook of Shopify.
Tesla (TSLA) With this continued selloff, I have been accumulating more Tesla shares at lower prices. In my last two investing updates I wrote on the multitude of reasons why I like Tesla. If the market continues to stumble lower, I will continue to add to my Tesla position without hesitation.
What I’m Watching
I currently have two buy orders in on what would be two new positions. They’re Microsoft (MSFT) and Peloton (PTON). The prices that I have in are quite a bit lower from where they’re at now. But in the event we see another very large selloff, they’re the prices I’d be willing to pay to invest in these two companies. We’ll find out if they hit those levels.
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Disclaimer: This is not investment advice. You should not treat any opinion expressed as a specific inducement to make a particular purchase, investment or follow a particular strategy, but only as an expression of an opinion.