April 2022 – It is not over yet

We made it through April. Have a look at the latest entry in my investment journal. 2022 started out pretty rough but this cruel April has taken us way past that: The Nasdaq has erased the gains of the last 2 years and is now trading at pre-pandemic levels. The S&P has had its worst start to the year since World War II and Big Tech earnings are a mixed bag. Let us have a look.

Advertisements

Changes to my portfolio this month

After bottoming out and then quickly making it back into the green last month I was mostly convinced that the worst was over. I used up all my reserves to buy more Unity (U) and average down in price. I have not gone on another shopping spree this month, but with so many high-quality stocks trading at such attractive valuations, I am working as hard as I can to gather new funds to put into the market in the coming months. What little I did have left this month went into a completely new venture for me: A private company called Nothing which I have I have done a piece about here. While it is certainly an exciting opportunity for growth I do not plan on including my shares of this company in my growth portfolio as the valuation of private equity can be hard to track month to month. This is the first time I buy shares of a private company and is just as much a learning experience for me.

Growth Portfolio

Overview
Unlabeled on the chart from left to right: Xiaomi (1%) and Coinbase (0.1%)
Moves
  • On April 5th I purchased a few symbolic shares of private company Nothing through a crowd investing platform. This amounted to approximately the size of my position in Coinbase (COIN).
  • On April 7th, on the last day of their funding round I decided to double my allocation in the company bringing it to around 0.2% of my portfolio.
Performance
My growth portfolio dropped a massive 14.2% this April alone marking my single worst month in the markets of the last 8 years.

Dividend Portfolio

Overview
Unlabeled on the Chart: Orion Office REIT (0,3%).
Moves
  • A small automatic buy order of the Danish Invest Denmark Index ETF went through on the 8th – Which I aim to continue doing every month this year.
Performance
Even as my dividend portfolio had performed admirably through the month, it took a nosedive on the last day and ended up down 3.2%
Advertisements

Dividend overview

Name (Ticker)Received (on)Amount (USD)
Broadcom (AVGO)Apr 4th$19.59
Federal Realty (FRT)Apr 19th$20.92
Realty Income (O)Apr 19th$13.28
Taiwan Semiconductor (TSM)Apr 19th$37.19
Orion (ONL)Apr 19th$0.49
TotalApr 2022$91.47
Comparison + total increase YoY$63.82 (Apr 2021)+$27.65
Dividends received before taxes. Comparison to the same month a year prior.

Commentary & Review

This month has truly been insane. On top of experiencing my worst monthly performance since I began investing, I also enjoyed my single worst day on April 26th dropping more than 7% throughout the day. While the entire market turned red on that day, Tesla (TSLA) making up 60% of my growth portfolio became the main contributor to this bloodbath for me as it dropped more than 12%. I struggled to find a reason for this, but a few days later we got confirmation that Elon Musk had completed a more than 8.4 billion dollar stock sale which might make sense to you if you have been following the news of his most recent acquisition.

Musk taking on another challenge through transforming Twitter (TWTR) honestly is not surprising to me. Despite what you may think all this talk about free speech is not new for him. he has been outspoken on the topic of censorship and fake news for a long time. However, what did surprise me was that he did have to offload some shares in order to make it happen. I have followed all activity regarding this deal closely and looked into how his new holding company is structured and it really did seem like he would not have to sell. But at least we received this update:

It seems like Elon Musk is done putting downwards pressure on the stock for now.

So what else went wrong this month? Well, Netflix (NFLX) started off earnings season reporting its first subscriber loss in more than 10 years. This resulted in the streaming giant’s second stock crash this year alone, now having dropped almost 70% from its recent highs. This created a ton of negativity and fear in the market which led to massive overreactions for when both Alphabet (GOOGL) and Microsoft (MSFT) reported their earnings. Google missed ever so slightly and was punished massively, leading to the company trading at its lowest price to earnings in a decade. They are still staying at the top of my purchase list until I have built my positions in Unity and Coinbase where they need to be, but Google is only getting more attractive by the day. Microsoft also dropped in extended trading, despite beating expectations, but it seems the market managed to figure out this one and reverse this at market open. In other news for Microsoft, it seems their deal to buy Activision Blizzard (ATVI) has been approved by shareholders and is moving in the right direction.

Advertisements

Should this deal pass, as expected, it would be massive news for their gaming division that will finally grow into one of the largest in the world. Their gaming subscription ‘Xbox Game Pass’ is such an underappreciated asset and I believe it is now well on its way to becoming the next big thing in gaming. It is essentially a Netflix of gaming and with more important first-party titles joining it has a bright future ahead. Amazon (AMZN) on the other hand, joined Netflix in disappointing their shareholders following earnings. The company reported an earnings per share loss of $7.56 and lost $183 billion in market cap as a result. This was mainly the result of Rivian (RIVN), their electric vehicle investment, dropping from its unfathomable high valuation last quarter. In reality, this does not reflect the performance of Amazon and truly does not matter, but it is a consequence of their strategy of investing everything they earn into growth. This strategy may finally have started to show its weakness and I believe it may be time for something new. I have yet to see their new CEO make any real changes or even appear on the company’s earnings call – but one thing that does excite me for the future of Amazon is that their ‘Just Walk Out’ technology seems to finally be rolling out in scale. Something I have been waiting a very long time for.

When I invested in Amazon back in 2018 this technology had just been announced. It is what convinced me they were not yet done changing the shopping experience.

Dividends

April marked the first month I received dividends from Orion Office REIT (ONL). A tiny amount, but still such a great feeling now also receiving dividends from a company I was merely given from holding shares in Realty Income (O). While they have not done particularly well since they were spun off, I really see no reason to let go of them. REITs are a great way of receiving reliable dividends but are usually not the best place to hope for much growth. It will be interesting to see if being part of a REIT from its very beginning will change that story. Again I beat my dividend income YoY pretty significantly, with the introduction of Broadcom (AVGO) since last April. Hopefully, this trend continues in the coming months and throughout next year, despite my current focus on building up my smaller positions in my growth portfolio.

Research & Goals

Most of my time this month went into following what has been going on with Twitter and Elon Musk, as his actions impact my own economy significantly. I have also worked on moving my pension onto my brokerage account so that I am able to decide for myself what to invest in. I feel like the timing of this is pretty ideal, although I may have to wait up to 10 weeks before my pension is moved to my brokerage account. But regardless, as everything has continued to fall almost entirely across the board, I am only getting even more eager to double down on my recent stock picks. Luckily I have landed a new job at an exciting FinTech company called Lunar which should help my situation. I may share more about this in the future, but keep in mind that it is still a part-time role next to my studies at University. I am incredibly excited about the opportunity to start in my new role as ‘Technology Coordinator’ and all that I might be able to learn from being part of a growing business in this industry.

Everything that I have to spare will be put towards more Unity stock and finally building out my position in Coinbase. Even my position in Xiaomi I hope to be able to contribute to, as it seems the Chinese crackdown is finally coming to an end. The stock is currently trading at less than half of when I first started building my position last year. Hopefully, I will get around to all three positions in 2022.

Watch List

Growth Portfolio
Name (Ticker)Conviction (Rank)
Alphabet (GOOGL)1 ┅
Shopify (SHOP)2 ┅
Sea (SE)3 ┅
Embracer (EMBRAC B)4 ┅
Meta (FB)5 ┅
Palantir (PLTR)Contender ┅
Note that many of these may already trade within desirable price ranges for me but may overlap with current holdings with higher conviction or are simply on hold due to a lack of funds.
Dividend Portfolio
Name (Ticker)Conviction (Rank)
JP Morgan Chase (JPM)1 ↑
Costco (COST)2 ↓
Bank of Nova Scotia (BNS)3 ↓
Digital Realty (DLR)4 ↓
Lockheed Martin (LMT)5 ┅
WhiteHorse Finance (WHF)Contender
Note that many of these may already trade within desirable price ranges for me but may overlap with current holdings with higher conviction or are simply on hold due to a lack of funds.

My Watch List for growth has not moved in the slightest as the whole list is still made out of companies I believe to be of the utmost quality. Their valuations continue to drop, but my conviction does not. Meta (FB) in particular has been on an interesting ride ever since its earnings back in February. Shareholders continued to punish them out of fear until they released another round of earnings here in late April and the stock jumped almost 20%. Their core business is still solid and I am fully on board with their investments in the Metaverse. My Dividend Portfolio Watch List still also consists of the same players, but things have moved around a bit. I would still love to own Costco (COST) as they are probably the single highest quality physical retailer out there, but nothing seems to be able to break their crazy high valuation right now. For that reason, as the rest of the market has continued down, JP Morgan Chase (JPM) has taken the top spot as it has reached 52-week lows time and time again this month.

I plan on making the most of the bear market. Such an opportunity may not come around again for a long time. I cannot tell you what to do with your own funds, but whatever you do end up doing – do not panic.

Goals

  • Short term I wish to continue to increase my position in Unity, Coinbase, and Xiaomi.
  • For the year 2022 while generally focusing more on growth stocks than in the year prior.
  • I have no current plans to open any new positions in my Growth Portfolio, but rather to add to my newest additions.
  • I do not plan on selling out of any more positions this year.
  • In my 2021 year in review, I stated that I aim for a 35% return in 2022. I continue to strive toward this goal. Currently, I am down 13.46%.
  • Over the long term, my goal is to slowly shift towards more stable positions and dividends on my journey towards financial freedom.

Disclaimer: I am not a financial advisor, the opinions expressed in this article are entirely my own – always invest at your own risk.

If you enjoyed this read and are looking for more content like it, consider signing up for my email list to receive new posts from jesbaek.com directly in your inbox. It is completely free and will not be used for anything else.

Also, consider supporting me on my journey towards financial freedom.

1 Comment

  1. Henrik Bæk Jørgensen says:

    Uhadada

    Like

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s