Call me paper hands if you want. But I exited my entire position in the “All In” portfolio. At the peak the portfolio was up 130%. It is now up 92% and I have $45,180 in firing power.
The Evergrande news spooked me. Every other company I have investments in I didn’t sell. But met coal. Oh man. Any Chinese infrastructure downturn will send these producers back down to the ground.
Here’s the thing. 66% of pig iron production in 2020 went straight into China. 55% of raw steel production in 2020 went directly into China. So if the Chinese real estate market blows up, steel, coal, pig iron and all of businesses associated with these industries will get smacked extremely hard.
And given the artificial demand for all of these commodities, it is extremely hard to tell what the base case demand levels are for Chinese iron, steel and coal consumption.
So I decided to exit and de-risk my entire portfolio from any Chinese infrastructure collapse. Sure, these coal producers are likely to have record years in 2022, generating significant cash flows and transforming their capital structure.
But I was already up double digits on my coal investments in less than three months and absolutely killed it. I decided the right move was to take a step back, de-risk the portfolio and build up some firing power for when I find a new investment that has minimal downside and significant upside.
Two weeks left to invest in Piestro – the robotic pizzeria of the future (sponsor)
The US pizza market will be worth an estimated $54B by 2023–up from $46B today. But traditional pizzerias face high labor & real estate costs resulting in lower profit margins–estimated at 22% on average.
Enter Piestro - the robotic pizzeria that makes pizza at a fraction of the cost of traditional pizzerias and boasts an impressive 48% projected profit margin.
In fact, Piestro recently announced a commercial partnership with global brand 800 Degrees Pizza. Valued at an estimated $530M and projected to kick off with 3,600 machines to be produced and sold over the next five years, this partnership will help drive future growth for both companies and allow consumers to access pizza 24/7 in high-traffic locations.
Invest before 9/30 to claim your slice of Piestro!
What is next?
I’m still searching for the next company I want to plow $45,000 into. I have a few ideas but want to stay patient and only swing at the ideas I know I have asymmetric upside to downside.
One company I recently bought a major position in could be a contender. They are a small retailer with a stock that recently gotten hammered. I owned this stock back in the spring and sold after it re-rated 100% in a few months. When the stock sold off this past month I took another bite from the apple.
Another company I recently wrote up could also be a contender for the portfolio. However I don’t understand the business model as well as I want to and there is significant downside risk should another hurricane come crashing into the southeastern states. But despite this, the large insider buying, forced selling and multi-decade lows encouraged me to take a small starter position.
I am sure I will find a great idea soon. I am always on the search for undervalued opportunities the market is not looking at. If you have any good stock ideas that fit my style please feel free to drop a ticker in the comment section.
Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.
Alpha Letter is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.
THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.
Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
The publisher, its affiliates, and clients of the a publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.
By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.
For Full Terms of Use Click HERE. For the Privacy Policy Click HERE.
alphaletter.co (“Alpha”) is a website owned and operated by Substack. Alpha is paid fees by the companies that make investment offerings on this website. Be aware that payment of these fees may put Alpha in a conflict of interest with the investor. By accessing this website or any page thereof, you agree to be bound by the Terms of Use and Privacy Policy, in effect at the time you access this website or any page thereof. The Terms of Use and Privacy Policy may be amended from time to time. Nothing on this website shall constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, any securities to any person in any jurisdiction where such an offer or solicitation is against the law or to anyone to whom it is unlawful to make such offer or solicitation. Alpha is not an underwriter, broker-dealer, Title III crowdfunding portal or a valuation service and does not engage in any activities requiring any such registration. Alpha does not provide advice on investments or structure transactions. Offerings made under Regulation A under the U.S. Securities Act of 1933, as amended (the "Securities Act") are available to U.S. investors who are “accredited investors” as defined by Rule 501 of Regulation D under the Securities Act well as non-accredited investors, who are subject to certain investment limitations as set forth in Regulation A under the Securities Act. In order to invest in Regulation A offerings, investors may be asked to fill out a certification and provide necessary documentation as proof of your income and/or net worth to verify that you are qualified to invest in offerings posted on this website. All securities listed on this site are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities. Alpha does not verify the adequacy, accuracy or completeness of any information. Neither Alpha nor any of its officers, directors, agents and employees makes any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy, valuations of securities or completeness of any information on this site or the use of information on this site. Neither Alpha nor any of its directors, officers, employees, representatives, affiliates or agents shall have any liability whatsoever arising from any error or incompleteness of fact, or lack of care in the preparation of, any of the materials posted on this website. Investing in securities, especially those issued by start-up companies, involves substantial risk. investors should be able to bear the loss of their entire investment and should make their own determination of whether or not to make any investment based on their own independent evaluation and analysis
Hey, just wanted to say this is a great newsletter, probably the best investment so far. I was wondering if you had looked into uranium companies, seen a bunch of comments on fintwit about it.