One of the lessons I learned losing all my money was that I should write down why I’m holding my positions. Because of this fundamental lesson I am writing them down now.
Oil : 45% of portoflo
The largest position in my portfolio is oil. My exposure to oil is through two indexes. The first index is the “VelocityShares 3x Long Crude Oil ETNs linked to the S%P GSCI Crude Oil Index ER.” I wanted to leverage my exposure to the commodity so I went with a triple leveraged fund. The second index I’m in for oil is the “United States Oil Fund” which moves with the West Texas Intermediate futures price.
Cash: 25%
My second largest position is cash. I figured in these high volatility times keeping some cash makes sense.
Option Contracts:
J.P. Morgan $150 Call Expires 1/21/2022 ~ 13%: J.P. Morgan is one of the most profitable and well capitalized bank right now. I am not convinced they will be materially impacted because of the Coronavirus. Their return of equity is one of the highest among the large U.S. banks and Jamie Dimon is an extremely capable manager.
Snapchat $22 Call Expires 1/21/2022 ~ 10% : I do not think the Coronavirus will adversely affect Snapchat’s core business operations. Because of their recent 40% decline I figured a long term call would be a good bet. I also really enjoy their core product and believe it is popular with a very impressionable demographic which commands a premium to advertisers.
GE Call $12 Call Expires 1/21/2022 ~ 7%: GE is currently selling their Biotech division for $24 billion I believe. This capital will provide some breathing room and allow GE to weather the storm. Also, GE healthcare is one of GE’s largest business and is well positioned in the current pandemic. One of the reasons I believe this company is so sold off right now is because they are a major supplier to Boeing. I believe with the government assistance to Boeing, GE’s production of engines will resume close to capacity.