What I just Bought And Sold
Forever Portfolio: Averaging Up And Down
Hi Multis
Today, I added to the Forever Portfolio for the second time in February. As most of you know, I invest every two weeks. Normally, that’s €3,500. But just like last time, I boosted that to €5,000. Many of our companies are down so much that I think it makes sense to put a bit more money to work right now.
As I mentioned multiple times over the last few months, this feels a lot like the end of 2021, maybe early 2022. The indexes were still near all-time highs, but many of our companies had already crashed 50% or more. That’s what you see again right now.
I know it’s scary. And at the same time, these are the moments that can lead to great returns. Remember: Cloudflare was down 82% in 2022. Shopify was down 85%. Even now, with both stocks down again, they are both a four-bagger from that 2022 price. So yes, it feels like throwing good money after bad. But history shows it often pays off.
One thing I want to stress now more than ever: do not go on margin. I have stressed multiple times that I never go on margin. I read a story recently of a Multi who did, and got completely destroyed. That really hurts me. I have always said this, from the very first Potential Multibaggers article in May 2017, and I’ll say it again. Please don’t go on margin and now even less than at other times.
If your fingers are itching to buy, maybe look at a position you don’t have that much confidence in anymore. And that’s actually where I want to start.
What I Sold: Lumine Group
I sold my Lumine Group position. It’s not that I lost confidence in the company. It’s more that I just don’t find myself very interested in what it does.
Lumine is a spinoff from Constellation Software, and it buys vertical market software companies in telecommunications. Fine business, probably, but I don’t know it well enough, and I don’t care enough to dig deeper. That’s a problem.
If I’m not genuinely interested in a company, I shouldn’t have it in my portfolio. It’s as simple as that. And that’s the case for Lumine. It was a tiny position because of that and I sold it because of that.
Having said that, let’s go to the stocks I bought.
Mercado Libre
The biggest addition this time was Mercado Libre (MELI). The company released its results this week and the stock plummeted.
MELI did something Wall Street doesn’t like: it said it would invest for the long term and that the short term would look a bit less pretty because of it. There were also some scares around its lending book.
I haven’t had time to write an article or listen to the conference call yet. This was the craziest week of the year so far, with about half of the potential multibaggers reporting earnings.
But I’m happy the market is so short-sighted. Mercado Libre is already my biggest position, and I’m not afraid to add to it again. I think the market simply doesn’t understand the power of this company.
Do you want to know the rest of what I bought? Where I see the opportunities? Then this is your chance!
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