Trade Alert: Hard Choices To Reduce The Number of Names

It’s Fried-day. What a week of earnings reports, market volatility, hard work and I even went to a ballet at Spencer Theatre in Alto, NM last night. Made me miss living in NYC where you can buy a ticket to the greatest ballet performances on a whim.

Long-time readers know that I strive to make the hard trades, to keep my ego in check, to not let emotions drive my trades.

Great hedge fund managers need to be strictly disciplined and flexible — and concentrated. Bill Ackman, for example, only has about seven total positions in his biggest multi-billion dollar hedge fund.

I’m not looking to copy his approach or anybody else’s, but I know that we need to focus our energy, our time and our capital to our highest conviction ideas and that requires selling our lowest conviction ideas, even if we just recently bought them.

On that note, I’ve got some hard decisions to make again here and I’m making them as I want to continue to reduce the number of positions we have in the portfolio and to raise some more cash here to redeploy slowly but surely into the best of our names. So here are the moves we’re making now in the hedge fund and in the personal accounts too.

First, is a big ol’ mea culpa. I’ve rarely been as wrong as long as I have been on Intel (INTC) and I think it’s time to completely clear my head from this position for at least a while. I still believe that Intel’s foundry business could eventually be a big winner but the company hasn’t been executing for the last couple quarters, they keep struggling to sell their primary CPU chips and they keep guiding the next quarter lower. I reserve the right to come back to this name at any time as always, but for the sake of reducing our positions and for the sake of clearing my head I’m making the hard decision to take my losses on this stock and move on for now.

Second, we are going to sell our Rockwell Automation (ROK). It’s been a good winner for us, having initially bought this name around $200 two years ago as a play on The Onshoring Revolution. The growth that I was hoping to see accelerate for this company hasn’t materialized even as the stock has gone up making the valuation stretched here. The 10-baggers and 100-baggers that we’re looking for as Revolution Investors require strong growth and that hasn’t developed here. I’m moving on.

Also, I hate to do this again, but I just want to be aggressive about reducing the number of names we own and I’m going to sell our recent purchase of ASML (ASML), which is up a few percent since we sent out that Trade Alert a couple weeks ago. It’s a great company, it’s got potential for strong growth in years ahead even as the company expects this year to be a no-growth year.

Finally, we’re selling the last of our Intuitive Machines (LUNR) stock. We made a great trade on this one, as we bought at all-time lows around $2 and sold almost all of it when it was above $10 after they sorta landed their lunar rover on the moon a couple of months ago. Time to free up my head space and remove this name from the sheets too.

I’m going to have more capital to put to work on our highest conviction names (as we did last week when we were buying Tesla (TSLA) and Rocket Lab (RKLB)), and we will also continue to look for other names that we think can go up 10x or 100x in coming years.

Hard choices, but easy does it. Let’s rock on.