Trade Alert: SELL these three long termers
3rd September 2020 |
When I look at some of the decade-defining technologies that will deliver change over the next nine-and-a-bit years, there’s a list that I like to refer back to:
- Artificial intelligence
- 5G networks
- Autonomous devices/vehicles
- Decentralisation of industry
- New energy transition
- The new financial revolution
- Quantum computing
- Commercialisation and militarisation of space.
These are some of the areas that are going to open up opportunities for investors over the next ten years. There are more, but deep-seeded at the heart of all of them is one common thread.
Technological change.
Right now a lot of attention is being given to the likes of the major tech giants on the US markets. Apple is now worth more than the entire FTSE 100 (in terms of market cap).
Think about that for a second. Really think about it…
One single company bigger in market cap than 100 of the biggest listed companies in the UK.
Does it make sense? Not really. But what we can’t deny is that’s just the facts of the day. Whether that’s sustainable, I don’t know. My view is it isn’t and that soon enough there will be a major correction in the US markets.
But what seems to be happening is that the US Federal Reserve’s rampant money printing is really only finding its way into one area of the US economy, the stockmarket. And for that to continue takes the US into a deep, dark economic place it may never come back out of.
Still, what we also know is that markets, companies can be somewhat detached from economic stress. And that in all kinds of economic situations there will always be opportunities for investors.
Bull markets, bear markets, booms and busts, there are always stocks that can be invested in to ride long-term opportunities that deliver change to the world.
And in the 2020s that’s mainly going to come through the kinds of technologies I’ve listed above.
These are all areas I will continue to focus on – some playing out more short term, some taking longer to unravel their potential. And it means that I will obviously continue to bring you new recommendations.
However, in doing that, and you can expect your September brand new recommendation next Thursday, I need to ensure that our buy list isn’t too bloated.
With that I’m always looking at our positions, assessing what’s delivering as expected, what maybe isn’t, where we should take profits, cut losses or give something more time (or less).
There’s a few stocks in our buy list that I’ve made the call on to move out of the buy list. One has done nothing, one hasn’t delivered as expected and one has been a great return.
A mixed bag, but overall now is the right time to make a move on these three long termers.
First off, Activision Blizzard (NASDAQ:ATVI). The stock has been in the buy list for almost two years now and so far hasn’t delivered the sort of returns I’d hope after this period of time.
It’s a massive global gaming company, and while gaming has really started to take off again and impending new console releases may prove a turning point, I don’t think that it will show the explosive returns I’m really looking for in our areas of focus going forward.
Action to take: SELL Activision Blizzard (NASDAQ:ATVI) at market prices.
Next up, Canopy Growth Corp (TSX:WEED). Canopy has now been in the buy list for almost two and a half years. It’s one of the world’s major players in the legalisation of cannabis. It operates a number of legal cannabis brands, has huge cannabis facilities and very long term may prove to be an even more significant player in this space.
However, after two and a half years the stock is showing a loss for us, and I would have expected a stronger and faster bounce back from where the stock was this time last year.
It hasn’t materialised and for now, cutting losses here is the call to make and moving on to newer recommendations in our buy list is a more sensible strategy.
Action to take: SELL Canopy Growth (TSX:WEED) at market prices.
Finally, I’m going to also call time on a stock that’s delivered a wonderful return over the last two and a half years. That’s Kape Technologies Plc (LSE:KAPE).
The last year in particular has been a success and we’re sitting on a profit position now of around 179%. That’s not a bad return over that time frame, and now is a great opportunity to take profits from this long termer.
While again, Kape has had a great year and may continue to press higher, the smart play in this instance is to take those profits off the table and look to reallocate into newer opportunities I’m going to deliver over the next few months.
Action to take: SELL Kape Technologies Plc (LSE:KAPE) at market prices.
As I said earlier, I’m working on your next recommendation, which we will publish to you next Thursday after the market close to try to give all subscribers equal opportunity to place a trade in the market for next Friday.
Make sure to keep an eye on your inbox next Thursday.
Regards,
Sam Volkering
Editor, Frontier Tech Investor
