June 2022 – Hell freezing over? Nah, just hirings, and my assets…

Summer is upon us, and the sun is out, so what better use of your time than to sit down and have a read through this month’s entry in my investment journal? June includes a small update on Unity, stock split news, and a story of how I lost access to my Ethereum holdings.

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Changes to my portfolio this month

This month has just been more of the same: I bought more Unity (U) as I have promised to do for the remainder of the year as long as prices stay below $100 per share.

Growth Portfolio

Overview
Unlabeled on the chart from left to right: Alphabet (1.6%), Xiaomi (1.3%) & Coinbase (0.1%)
Moves
  • On the 10th I bought a few more shares of Unity at a price of $37.47.
  • On the 13th I bought another chunk of Unity shares at a price of $34.4 lowering my average price to $67.68 from $78.98 prior.
Performance
My Growth portfolio has shredded another 6.92% officially wiping out my gains from 2021.

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
My Dividend Portfolio let go of 3.32% doing slightly better than the overall market, but still not great.
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Dividend overview

Name (Ticker)Received (on)Amount (USD)
Microsoft (MSFT)Jun 10th$92.00
3M (MMM)Jun 14th$14.99
Realty Income (O)Jun 16th$13.75
TotalJun 2022$120.74
Comparison + total increase YoY$111 (Jun 2021)$9.74
Dividends received before taxes. Comparison to the same month a year prior.

Commentary & Review

I know it may be boring, but I continue to buy Unity with every spare cent I have. I believe the stock to be vastly undervalued considering its optionality, strong market position, and quality leadership. Over a year ago I shared how I believe this company to be a buy in the range of $100 per share. A lot has changed since then – mainly Unity has grown its revenues, disclosed its plans for reaching profitability this year, and acquired several incredible operations to strengthen its software stack, But in general, markets have gone down drastically and amidst heightened fear among investors, Unity disclosed finding an error in their algorithm – leading to lower than usual forecasted growth next quarter. In a massive overreaction by the market, the stock sold off 35% and I was quick to pick up some extra shares at just $32.1 just last month. I was going to buy anyway, but on that particular purchase, I am already up over 10% as the stock has moved back up near the 40s. The same can not be said for my overall Unity holdings however, where I am down around 40% still. Current levels are an unbelievable bargain and I plan to continue for at least the remainder of the year.

Already by next January, I could see the stock having recovered fully as I expect a change in tune, once the company reaches profitability. Apple (AAPL) is rumored to unveil their much anticipated XR offering by this time as well, where Unity is likely to deliver key developer tools and experiences. There have likewise been rumors of layoffs at Unity – something which was to be expected considering the current environment in tech. On their latest earnings call Unity alluded to having ‘found optimizations’ in order to reach profitability and I assumed that at least some of this would be layoffs. There is still no concrete confirmation of this, but it looks like we are talking about 300-400 people or around 4% of its total workforce being made redundant. In comparison, Tesla (TSLA) is laying off around 10% of its workforce and Coinbase (COIN) around 18%. Speaking of Tesla, plans for a 3:1 stock split has been laid out, expected to be approved in August. Amazon (AMZN) completed theirs early this month, splitting the stock into 20. Alphabet (GOOGL) is doing the same next month. I personally really enjoy stock splits as they grant me liquidity for future portfolio rebalancing.

Should I do a post on everything related to stock splits?

In other news: I lost access to my Ethereum (ETH) holdings. Ethereum is the cryptocurrency of which I am the most bullish and as part of my plans to expose 1% of my net worth to crypto, I purchased a little ETH some time ago on Coinbase. Late last year I moved these holdings into Celcius, a platform that offers interest on crypto, by lending it out to others. On my Ethereum, I received 3.5% interest, which I considered reasonable, but unfortunately, Celcius has been practicing unsustainable business practices on higher-yielding assets. In a perfect storm of a general market crash and their reliance on the infamous Luna project to sustain these practices, Celcius has been forced to lock away their customers’ funds in order to stay afloat. I do not expect to see my assets again as I now believe Celcius will soon be insolvent. Had I known of this beforehand I would of course have moved my assets, but in a busy exam period, I simply have not seen the warning signs in my feed until it was too late. Fortunately for me, it was always a small amount, but I really feel for everyone who may have lost much more.

Just in May, Alex Mashinsky, CEO of Celcius was trying to marginalize the damage done to their financials via the collapse of Luna. Something I do not appreciate.

Should I against all odds, somehow get access to my Ethereum holdings again, I will sell and funnel it into Coinbase stock. This may seem counterintuitive, but this experience has not made me lose conviction in crypto in general, and I simply have found Coinbase to be a better way for more broad exposure to this space. Coinbase invests in new crypto/blockchain projects and could end up being sort of a Berkshire Hathaway (BRK) for crypto – but is at the same time one of the largest crypto exchanges in existence. By buying stock in Coinbase rather than cryptocurrencies directly I also take benefit of more attractive taxation. Just like in tech, crypto assets have dropped drastically in price, and believe the current price to be attractive for holding long term. Just keep in mind, for all the time I spent talking about the topic I would only personally risk 1% exposure to crypto still.

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Dividends

Microsoft (MSFT) delivered a nice $92 dividend payment to me early this month which went into my purchasing power of more Unity stock right away. Compared to last year, my position in Microsoft has decreased, but due to some nice dividend growth and a bigger position in Realty Income (O), compared to last year, I still made nearly 10 bucks more this June compared to a year ago. I always appreciate seeing this kind of growth.

Research & Goals

Once again, most of my time this month has been spent on exams. Thankfully that is now over and done with and I have now completed the second year of my bachelor’s and can now go on summer holiday. The time I have had for research this month has therefore been limited and has mostly been surface level. I have been trying to determine if any of the companies I mentioned letting go of some of their workforce are in any kind of trouble and I have quickly come to the conclusion that they are not. At first glance, it does not make much sense for companies in a growth phase to be letting go of staff – but according to Musk, Tesla will still have more employees by the end of the year than now. Unity and Tesla seem to simply be trimming the fat and letting go of people made redundant – for example, Tesla’s auto-labeling efforts have drastically improved over the last year and so some of the first people to be let go were ones in their autonomous division during manual data labeling. At Unity, most also seem concentrated within AI, although here it is still a lot less clear. As more things point towards a recession I believe it is the right thing to do, despite the negative impact it may have on people’s lives.

Tesla has had a rough quarter, mainly because of lockdowns in Shanghai, but has over the last couple of days truly called all hands on deck. High-level managers are doing deliveries or working on the factory floor. Musk has taken a longer-than-usual break from Twitter and has reportedly been seen keeping his head down and working hard at Giga Tesla. Delivery numbers should come out by July 1st and it will be really interesting to see if the company was able to make up some ground, ramping up production in their two next factories. Regardless, one bad quarter or a recession in the making does not change the long-term picture for any of my holdings. Coinbase is also not having a fun time, currently under attack from every angle, being accused of selling users’ data and being on shaky financial ground, but looking at it, none of it seems to hold its own. Fear is at a peak level and it is only natural that people’s perceptions change in times like this. Just not for me.

Franz von Holzhausen, Tesla Chief Designer during personal vehicle deliveries, setting a good example for everyone here by the end of a tough quarter.

Watch List

Growth Portfolio
Name (Ticker)Conviction (Rank)
Embracer (EMBRAC B)1 ┅
Sea (SE)2 ┅
Shopify (SHOP)3 ┅
Meta (FB)4 ┅
MercadoLibre (MELI)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 ┅
Corning (GLW)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 stays the same for this month, with markets being mostly flat and my limited time in June.

Goals

  • Short term I wish to continue to increase my position in Unity – potentially Coinbase and Xiaomi as well.
  • For the year 2022, I prioritize buying growth over dividend stocks.
  • I have no plans to open new positions in my Growth Portfolio.
  • 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 although I have accepted its unlikeliness. Currently, I am down 27.28%.
  • 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.

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