Nibbling on these stocks

“Politeness and consideration for others is like investing pennies and getting dollars back."

- Thomas Sowell

The Portfolio

The portfolio is up over +10.00% so far this year

Our benchmark index, the S&P 500 is up just over +4.0% YTD.

If you're interested in the stock market, are looking for diversification or growth please feel free to connect me. I'm always available to talk, maybe provide some new ideas or to present to your group. clay@claybaker.com

What's Happening?

Today's stock market pull-back feels like profit taking, in particular from all the alto traders that wanted to take a bit off the table. The recent rallies have seen more money from retail investors piling into stocks that are trendy and have lots of momentum (Virgin Gallactic, Tesla, etc), this is never a good sign, but it also isn't an indication that the market is about to tank. Basically growth stocks are overbought and got too expensive. A couple of names in our portfolio have pulled back enough that I wanted to nibble to add to our positions. I expect that a correction in the market will happen, likely this year and when it does I want to make sure I have enough cash on hand to be a buyer.

Adding to MarketAxess (MKTX)

Today MarketAxess dropped below our cost basis so I took the opportunity to add shares on this temporary pull back. We only have 10 shares, so I doubled the position to 20 shares for now. On deeper pull backs I'll likely add again. MarketAxess provides a best in class trading platform for bond traders. There's no reason to believe that the volume of bond trading will decrease or that a competitor will step in and steal market share, so I like this company for the long term. I am optimistic that their trading platform may one day become leverage for the company to develop trading platforms for third party clients, much the way NASDAQ does for specialized markets.

Adding to Nvidia (NVDA)

Perennial favorite Nvidia delivered a fantastic quarterly report, the stock soared and likely got a little ahead of itself. This may be the most important chip maker for the next decade and possibly beyond. I'm always happy to add to this holding, but will only do so on pull backs that allow us to maintain a margin of safety. NVDA currently trades 33% above our cost basis and is only down 3% from its 52-week high so we may get more opportunities to add to Nvidia.

Other Updates

On the portfolio page you'll see that there are several companies listed with no position. I've indicated a Buy Around price, but haven't yet made those purchases, that's our bull-pen of stocks to watch. I have removed CyberArk (CYBR) from the bull-pen, but may add in another cyber security firm in the future. I like Fortinet, Palo Alto Networks and Crowdstrike in this space.

I've added Enphase (ENPH) to the bull-pen. I own Enphase personally, I probably should have added it to the portfolio a long time ago. The stock ran up significantly after the last earnings call, and rightly so, they really delivered. However the stock price has gotten ahead of itself, I'm just waiting for better prices. Enphase makes inverters for solar panels. Unlike all other inverters that are large, expensive and often unreliable, remotely located boxes, Enphase makes a semiconductor-based microinverter that converts energy at the individual solar module level and combines with its proprietary networking and software technologies to provide energy monitoring and control services. It sells its solutions primarily to distributors, as well as directly to large installers, original equipment manufacturers, strategic partners, and homeowners. The advantages of their product are significant in terms of installation cost, performance and monitoring. One of my favorite things about Enphase is their ability to go back to existing customers and upgrade legacy micro-inverters with their latest product. I'd like to pickup shares around $46, but even in todays sell off Enphase is still rising.

Today's BUYs

  • MarketAxess (MKTX): Bought 10 shares @ $336.50

  • ​This is an add to an existing holding.

  • We now hold 20 shares @ $351.73/share

  • Nvidia (NVDA): Bought 5 shares @ $300

  • ​This is an add to an existing holding.

  • We now hold 20 shares @ $230.49/share

"Markets don't go to zero, Portfolio's do.

Buy quality, be patient...and look twice for motorcycles."

- Clay Baker

Stay Invested,

Clay Baker

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Keep Me Honest 2019

  1. S&P 500 declines to 2,350 or more (1-3-2019)

  2. Healthcare and Biotech sectors outperform (1-3-2019)

  3. S&P reaches 3,000 by year end (1-11-2019)

  4. CSCO reaches $60/share (1-18-2019)

  5. VEEV reaches $145/share (2-14-2019) (achieved $145.23 on 5-10-2019)

  6. CVS reaches $91.50 (2-27-2019)

  7. Bull market takes another leg up (4-7-2019)

  8. The Fed will lower rates 1-2 times (5-13-2019)

Clay's Rules

Rule #1: Don't lose money

Rule #2: See Rule #1

Rule #3: Portfolios go to zero, markets don't, Stay Invested

Rule #4: When a good stock you own drops 10% below your cost basis, add shares

Rule #5: Bull markets aren't sustained without the Transports

Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase

Rule #7: When an investment bank sells below book value, buy it

Rule #8: Tips are for waiters. Do your own homework.

Rule #9: Don't sell a stock because you're bored with it. Do your own homework.

Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:

HD, AMRN, BSTC, CVS, CSCO, VEEV, STZ, AMZN, NVDA, BCRX, GS, BDSI, VEEV, VTI, GLD, HD, AWR, XLNX, MRVL, NBRV, ENPH

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.
This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

© 2016 by Clay Baker all rights reserved