Today I opened five small positions. For me, these are growth-oriented plays and two gambles. The three safer ones are not the most risky bets, they are stocks I would certainly hold right now if I had positions in them, expecting them to do well long-term. And the two gambles are the obvious ones right now.
– MSFT: Little high P/E (around 27) for my taste, but they're 25% down YTD, and they have enough cash that they are a bit on a shopping spree. They're not doing bad, so I see a bigger upside than downside here. I like companies that buy other companies, shows they have money to do that.
– AAPL: I said to myself last year when they hit 20 P/E I'll buy. We're at 21. It's a calm day after a bad day. They won't go broke anytime soon. More upside than downside for me.
– GOOGL: There have been threads a month or two ago seeing this as a great play, at P/E of around 25 back then. I looked at it, and it still felt slightly expensive, but definitely interesting. Now at 19 P/E.
– ATVI: Now this is the first bet. It's Warren Buffett's arbitrage play. My reasoning is if I'm bullish on MSFT I might as well do this as well. If the deal goes through, that's +25%. If it doesn't, that might be a downside temporarily, but they're doing well by themselves long term…
– TWTR: This is the wild bet. Usually anything with Elon Musk connected to it is too risky for my taste (in any direction! I'm neither buying nor shorting TSLA). But if I ignore March 2020 they've been trading between 28 and 50 the last couple of years, before Musk Madness hit. Elon might be forced to pay the 54.20, then it's 45% up. He might renegotiate the price, that will be some compromise, but likely still well above the current price. Or the deal might fail completely, but I honestly see limited downside even in that case, especially long-term, they're not going away anytime soon. I think the second scenario is the most likely, with the other two being possible. I'm guessing this is much better than inflation as an expected value.
Again, I'm not betting my livelihood on these 5, it's a smallish position. But I have to start buying something at some point after the market went down so much. I don't know when the recovery starts, but if I never buy I can't profit off it.
I might lose money temporarily if they go down more, but that's always a possibility.
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