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April P/L Challenge: Which stocks in your portfolio shined for you?
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doctorpot1 joined discussion · May 3 16:25

April 2024 Portfolio Review: Riding the Chinese Market Resurgence

April 2024 has been a remarkable month for my portfolio, characterized by a surge that edge out the $Hang Seng Index(800000.HK)$ by a hair's breadth, but outpaced major benchmarks like $SPDR S&P 500 ETF(SPY.US)$ and $FTSE Singapore Straits Time Index(.STI.SG)$ .
April 2024 Portfolio Review: Riding the Chinese Market Resurgence
One of the main reasons behind this performance was long awaited rally in the Chinese market. After weathering 3 years of turbulent crashes, it was like seeing a phoenix rise from the ashes . And boy, did it make a difference in my portfolio! Fingers crossed that this Chinese stock rally marks the start of a real bull run, not just another false alarm
Even though most of my gains came from just holding onto my stocks. I did make a couple of moves to spice things up. I rolled a $Sea(SE.US)$ covered call option to milk more money out of that, as well as buying into $ContextLogic(WISH.US)$'s M&A value gap (but overall I'm still suffering a loss of $741.50 on $ContextLogic(WISH.US)$ ).
Portfolio winners and losers
April 2024 Portfolio Review: Riding the Chinese Market Resurgence
US Stocks in my portfolio that grew more than 10% Green in April: $Futu Holdings Ltd(FUTU.US)$, $Grab Holdings(GRAB.US)$, $Bilibili(BILI.US)$, $Sea(SE.US)$, $DiDi Global Inc(DIDIY.US)$
US Stocks in my portfolio that lost money in April: $Palantir(PLTR.US)$, $Warner Bros Discovery(WBD.US)$
Active trade 1: Rolling the covered CALL
The first trade was a simple roll of a covered call. Basically, I just extended the expiration date of an existing covered CALL to earn some extra cash. It's a strategy I've been using to generate a bit of additional income without too much hassle. Back in late January, I bought some $Sea(SE.US)$ shares at $35.95 each, just before they unexpectedly shot up in value. To hedge my bets and try to bring down my cost basis, I sold some covered calls on those shares.
In April. I've decided to roll my $46 covered CALLs into $48 covered CALLs. What does that mean? Well, I'm extending the deadline for when I will be forced to sell my shares at that price, and also increasing the final selling price to $48. It's a move aimed to make some extra money from the initial trade.
I want to keep rolling this CALL up until it reaches a strike price of $66. It will take a lot of time to get there, but I'm patient and optimistic. Now, here's why I love this strategy: every time I roll over the call, I'm pocketing a bit of extra profit from what's known as the time value. It's like adding a delicious cherry on top of my investment cake – simple, satisfying, and oh-so-rewarding.
April 2024 Portfolio Review: Riding the Chinese Market Resurgence
April 2024 Portfolio Review: Riding the Chinese Market Resurgence
April 2024 Portfolio Review: Riding the Chinese Market Resurgence
Active trade 2: ContextLogic value gap
The second trade I made was quite the adventure, it is all about seizing an opportunity in the value gap within an buyout deal. $ContextLogic(WISH.US)$, the parent company of Wish, had struck a deal to sell its assets and liabilities to e-commerce giant $Coupang(CPNG.US)$. The terms were set at $6.50 per share in cash. However, what really piqued my interest was the potential hidden value lying within ContextLogic's assets, particularly its substantial net operating loss of $2.7 billion, which could significantly reduce future tax liabilities.
With ContextLogic poised to receive $6.50 per share in cash post-buyout, plus the potential for further gains if they successfully monetize their tax assets, I saw an opportunity for upside potential. That's why I voted in favor of the buyout, hopeful that management would successfully unlock additional value for shareholders.
doctorpot1: Remember to write in to Moo Moo to vote FOR for the buyout
During this saga, my attention was drawn to the gap between the intrinsic value of ContextLogic and its market price. So, I made a move and bought more shares at $5.35 each. My bet was that the market had underestimated ContextLogic's total value, and the share price didn't accurately reflect its true worth.
April 2024 Portfolio Review: Riding the Chinese Market Resurgence
Of course, every trade comes with its share of risks. The biggest concern here was the uncertainty surrounding ContextLogic's plans to monetize its tax assets. While the potential for finding a financial sponsor to unlock value was there, success was far from guaranteed. If ContextLogic struggled to find a suitable partner or failed to effectively monetize its tax assets, it could result in a significant reduction in the company's remaining cash.
In the end, this trade boiled down to a calculated gamble – a wager on how the market perceived ContextLogic's true value and its ability to capitalize on its tax assets. For me, the potential rewards outweighed the risks, making it a bet worth making.
Overall, my journey with ContextLogic has been a rollercoaster. I'm still nursing a loss of $741.50, having jumped into the hype back in 2022 without much due diligence. Thankfully, I managed to recoup some of those losses through selling covered CALLs. With this trade, though, I'm hopeful it'll help tip the scales from loss to profit. Here's to brighter days ahead !
April 2024 Portfolio Review: Riding the Chinese Market Resurgence
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doctorpot1
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crawled out of poverty, working towards FIRE!! (financial independence, retired early)
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