The first month of the year ended with the US-Dollar and with it the Japanese Yen down and major corrections in the valuation of health sector stocks and crypto-currencies. I have restructured our portfolio accordingly, leading into another profitable month.
I have been pushing a crypto-sceptic message for weeks. I had hoped for a raise this coming weekend and planned to close some of the last remaining crypto buy positions in the portfolio. However, as the drop on cryptos accelerated I decided to cut losses closing long positions in $BTC, $LTC and $BCH. On the plus side, I managed to close a couple of crypto shorts, realising profits. If cryptos recover during the upcoming weekend, as they did over last weekend, some of the shorts I added may turn negative for a few hours or days, though past performance is no …. and as always, the price of any of the 15,000 existing digital currencies is whatever people believing in them are willing to pay. In the meantime, I will keep monitoring crypto-currencies.
Three corporate behemoths — Amazon, Berkshire Hathaway and JP Morgan Chase, announced this week, that they are partnering to create an independent not-for-profit company for their U.S. employees. While life expectancy in the USA has been dropping for three years in a row (mainly due to drug abuse), Americans have the highest health care expenditure per head. The employers’ attempt at reigning in health-care costs has had a negative effect on the value of stocks exposed to the US health care sector like $MRK (in our portfolio still a 10% profit at the time of writing). However, our CRISPR and bio-pharma developers are already recovering – most positions in in deep green at the time of writing.
Despite the US’ President’s fondness for everything strong, including his stated aim for a strong Dollar, the Yanks have managed to suppress the Dollars exchange rate. The Yen was already perceived as cheap in December, but the Japanese government has entered into the competitive devaluation race, where the already dear Swiss Franc stayed strong more in line with the Euro. The result is that the $CHFJPY stood at near a 12 months high of ¥118.38 at the time of writing and our short at a loss. While the competitive devaluation is driven by politics and hard to judge, I plan to hold this position over the weekend, hoping that the Yen recovers a little, just as the US-Dollar did.
As a consequence of the competitive devaluation, European stocks are under pressure, with some stocks like L’Oreal SA (OR.PA) taking time to turn profitable.
New stock additions this week
I have added long positions in Unipol Assicurazioni (US.MI at €2.07) of Bologna, Puma Biotechnology Inc (PBYI at $66.71) of Los Angeles CA, Microsoft Corp (MSFT at $94.17) of Redmond WA and Banco Santander SA (SAN at $7.27).
Infineon Technologies AG of Neubiberg near Munich is under pressure from the saturation in microchips and the weak Dollar. I bought IFX.DE in a dip at €22.62 and sold after half an hour at a profit of 0.80% (€22.71). Preferred to keep cash for the upcoming fluctuations in stocks and cryptos.
The week ended with what I assume is a technical glitch, though it now seems that inadvertently, my copy of one of the most popular traders on eToro hit the Stop Loss. I have reported this to my account manager and eToro are looking into it.
Have a good weekend and happy trading at eToro!