Tech Stock Analysis in Tough Times

03.08.21

This month we have some great stocks on tap for review. Next week we open with that great growth opportunity: Palantir. That puts us on track in this extended month to put out all three and start April right on track.

This week we wanted to offer a word of caution. With so much anxiety in the market again there seems to be a war on tech stocks. Many may be worried that as we progress through our tech-fueled portfolio lives and the apparent war on tech and growth stocks now going on in the stock markets, we will take big losses. However, remember we are investors not traders. Plus we never invest the money we need now. We don’t advocate for the whim and fervor of the latest news, but moreover the value of tomorrow built on the disruptive tech we discover today.

Our strategy in our own portfolio is built to focus on our best tech names. We do our best to employ a strategy that is tax-advantaged (means giving us a better position with regard to taxation on our accounts such as holding for over one year). In good times this means that we expand our portfolio and build out into new, developing technological opportunities. Finding those companies new to the market and building the future. However, in tough times we too find opportunities for our strategic engagement. We don’t panic, we strategize and invest.

For us, this means pulling back from our companies that not only take hits (create losses, we can sell these without the worry of taxes – didn’t have profit to tax) but have developed difficult business conditions (e.g. difficulties in cash flow) that may impact the sustainability of the business. This doesn’t mean we have to give up on them forever, but it does mean that our money moves to our strongholds as their prices come down!

As we pull back (sell off these weakening positions), we look to redeploy that capital into our strongest positions with the most potential/solid financial footings. This is where we are always doing our homework. For example, as Nvidia has been selling down we are now building our position again. While we rode our previous position up, we maintained our balance (portfolio percentages based on our risk tolerances and interests) and invested new money elsewhere as the stock grew.

Nvidia is a great well-positioned company with a great financial footing and as it gets cheaper now, we buy. While Nvidia may never be super cheap again, we see piles of potential here and want this to be a core position. So we don’t buy as things skyrocket, but we do as the market overreacts to possible news and drives prices down. We believe in the future of Nvidia and buy as it gets cheaper. To do so we use those positions that have weakened. Nvidia is just one example though as we have many and they have been featured on our site. Tesla and Medtronic are two that fit that bill as well.

We are weekly reviewing our portfolio not to race out and drop cash on new positions but analyzing and learning about what we have already bought and the new situations those companies and teams of real people find themselves in. We share our explorations to some level here on this site. The homework doesn’t end with the initial purchase. We buy and research and strategize, but we never panic.

Thanks so much for joining us here on BCB Cyber and we look forward to seeing you all again next week for our wealth analysis on Palantir. Another great example of what we have been discussing here today.

But we don’t stop there. Make sure to come back tomorrow for an exciting sneak peek into a health tech company that is pushing the limits of our biology: Exicure. See you then!