I started the year brilliantly, getting out of stocks before the covid crash, and then bargain hunting during the March lows. I also shorted shopping mall REITs before the covid crash that they still never recovered from.
After that, my worst stretch in at least 10 years, primarily from shorting Tesla and MoneyGram, which more than doubled, and shifting my longs to defensive high divided stocks that gained 10% while the rest of the market gained 30+.
I also purchased about $1,500 worth of SPY puts over the year and they expired worthless.
The point of this bearishness wasn’t that I was pessimistic, but that my real estate portfolio meant my real estate net long position was about 120% of my net worth. I felt I needed some hedges since I just don’t want to sell the RE now.
I look at tech valuations, especially business software, and they are just astounding. The companies lose money by the billions, are in competitive low barrier industries, and often are not even growing that much. P/S over 50? Sure why not.
Peloton, worth 44 billion with two unprofitable products, buying Precor, which makes the best exercise equipment in the world, for 1% of the Peloton market cap, shows how dysfunctional tech valuations are.
However, I just don’t think here’s anything to pop the bubble in the short to medium term, so might as well ride the wave.
