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The Jenner Effect!

2/24/2018

 
What happens if you combine the Hollywood and the stock market? You get the "Jenner Effect". This week, Kylie Jenner (from the Kardashians) tweeted about how she doesn't open Snapchat anymore, and her millions of followers agreed. Investors panicked and sold off the stock worrying if a celebrity like Kylie stops using Snap, advertisers will follow suit. SNAP's stock lost $1.3 Billion or 6.3% of its market value in one day, and we anointed this phenomenon as the "Jenner Effect".

Beyond the lolz of it, why is the Jenner Effect important? It reminds us that the stock market is unpredictable. It's tempting to believe you can find stock price patterns and predict when it would go up or down, but no human mind or computer algorithm can account for such Kylie's tweet.

An intelligent investor is one who understands that such Jenner Effects are always plausible and unpredictable. In response, the best strategy is to only invest in well-run companies, operating in organically growing markets. Even if a Jenner Effect occurs and drags the stock price with it, the strength of the company's operations and the size of its market opportunity will lead to long-term growth. As for SNAP, the fate of the company and the stock is unclear, until it gains the operational strength required to weather such storms. The lesson for the intelligent investors is that there is no escaping from Jenner effects, but an intelligent investor can outsmart them!

This week's featured Stock Card:

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​This week, we picked and invested in a company that had an even bigger drop compared to SNAP. This amazing well-run company has its fingers on the pulse of the future but has fallen victim to the market's overreaction. Universal Display (OLED) is a research, development, and commercialization company behind the new generation of displays for wearables, smartphones, tablets and televisions and solid-state lighting applications. While the company has been continuously growing, and just this past month renewed its licensing agreement with Samsung, the stock has fallen down by 15% on Friday. The future is bright for OLED (ahem... pun intended), but once again the market is being short-sighted. Check out OLED's Stock Card to get to know the company further.
Other Stocks On Our Radar:
Thanks, H-w Lu, Milos Markovic, Ragini Elamanchi, and Kimberly Hunter from our intelligent investors' community for this week's Stock Card requests. Take a look at these Stock Cards by clicking on their logo:
That's it for this edition of Stock Card Weekly! If you liked it, tell about it to a friend or two! You'll be their smartest friend.

Five things you should know about marijuana stocks before investing!

2/18/2018

 
Happy Sunday folks! As a Canadian who lives in California, it is impossible for me not to think of marijuana stocks! Canada is on the verge of fully legalizing marijuana, and California just made recreational weed legal. No wonder why several of the most active members of our Intelligent Investors community have been researching and discussing these stocks for quite a while. Based on those detailed conversations, there are five things you need to know before picking up any cannabis stock:
Pros:
  1. Medical marijuana market is growing by 17% per year. That means it does not require the legalization of recreational consumption to be an organically growing market (pun intended). Additionally, legalization is expected to continue and increase the market growth rate from 17% to ~29% per year in the next several years. 
  2. Major consumer brands are investing their dollars in the industry (for example, Constellation brands took up a 10% stake in Canopy Growth). This leads to more stability in the industry. 
Cons:
  1. Many of the players need cash to grow their production capacity. The money is now coming through issuance of significant amount of convertible notes which means a substantial increase in the number of outstanding shares. What's this financial mumbo-jumbo, you ask? It merely means growth is coming at a cost. The more outstanding shares out there, the lower value per share for existing shareholders. 
  2. Even though many of the larger players do not need the recreational legalization to survive, any delays in legalization in the Canadian and other markets will drastically impact the price. Expect several months of extreme volatility. 
  3. We are yet to see a profitable marijuana producer. In the end, weed is an agricultural product and agriculture is a low-margin business. Even at their best, the key players will be low-margin businesses that are growing rapidly. Don't expect dividends in this sector anytime soon.

Now, let's take a look at the largest producer and arguably one of the best-run cannabis companies in Canada. I recently picked up this stock for StockCard.io's league of the 10Xers portfolio, and I wanted to share its Stock Card with you:
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​Canopy Growth operates in the legal marijuana market, and it is one of the largest publicly traded producers of dried cannabis in the world. In the last round of review, we were hesitant to jump in before legalization legislation comes to complete fruition. However, we have kept a close eye on this stock. Even without recreational marijuana legalization, the company is poised for growth. It has enough cash to operate for a few years without the need for additional funding. With the company's recent progress and the potential for growth, we see a small spot for the company in our real-money portfolio of the league of 10Xer stocks. Visit Canopy Growth's Stock Card to get to know the company better.
Other Stocks on our Radar:
Thanks, Fabien Lamasion, Yasha B., Gauri Jog, Aditya Bhave, Sahil G., Venkata R. Munnamgi, and Mark Bernberg from our intelligent investors' community for this week's Stock Card requests. Take a look at these Stock Cards by clicking on their logo:
Checkout Aspen Technologies' Stock Card!
Checkout Progress Software's Stock Card!
Checkout Pfizer's Stock Card!
Checkout Helios and Matheson's Stock Card!
Checkout Akamai's Stock Card!
Checkout Kemet Corporation's Stock Card!
Checkout Kalvista Pharmaceuticals' Stock Card!
Checkout Arista's Stock Card!
That's it for this edition of Stock Card Weekly! They say if you forward this email to a friend it makes Warren Buffett smile a bit! Make him laugh by forwarding it to 10 friends!

The mass panic that should not be!

2/11/2018

 
Them: "How are you holding up?"

Me: "Pretty well! The weather has been unusually warm in San Francisco. I had some fun walking the dog..."

"No, no, no, ... I mean the stock market crash? How are you holding up?" They say with a sympathetic tone.

Me: "Ummm! You mean the fluctuation of the stock market that is a natural part of investing?"

Them: "But the media and the headlines have been talking about the biggest point-drop in the DOW?"

​...

That's pretty much the gist of every single conversation I have had in the past week. I'm sure many of you have also had similar conversations.

When it comes to market fluctuations, I only have one simple fact to share with you that will help you calm your nerves, and I'm paraphrasing from one of my favorite investors - David Gardner: On average, two years out of three, the stock market tends to rise; one in three years, the stock market declines.

So, my fellow intelligent investors, keep calm and let the market do its thing. And, remember the financial media outlets are in the business of creating hype and panic to drive viewership. What the market has done this past week is just a part of the natural course of the stock market. It should go down so that it can go up.

For this week's featured Stock Card, I'm picking a company that goes well with the declining theme of the past few days:
This week's featured Stock Card:
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Control4 provides solutions and products for home controlling and smart homes. At Stock Card, we love investing in the companies that are shaping the future, and we are impressed by the company's strong performance and its market growth potential. We originally bought some shares of this small and nifty business due to its leadership in the Future of Home investment theme. While the company has just reported excellent quarterly results, the stock price has been on a downward trend. It's surprising to see the price fall as sales continue to grow. The company is profitable and has no long-term debt. The market opportunity is significant and is organically expanding. For our real-money portfolio, we are still willing to take an informed risk and bet on the company's success to grow with the market. Take a look at its Stock Card.
​Other Stocks On Our Radar:
Thanks, Ara Gregorian, Kapil H. and a few other members of our intelligent investors' community for this week's Stock Card requests. Take a look at these Stock Cards by clicking on their logo:
Checkout Apollo Global Management's Stock Card
Checkout Boeing's Stock Card
Checkout The Habit Restaurants' Stock Card
Checkout Baidu's Stock Card
That's it for this edition of Stock Card Weekly! Forwarding it to your friends is as delicious as buying the dip (wink wink)! Do it now!

When a great stock goes on sale...

2/4/2018

 
​Hi folks, it's Hoda from Stock Card. Today I'm going to let you in on a secret.

The last few days of this past week has caused a lot of heartaches. The stock market went down a few percentage points. I find it very timely to let you in on the secret of intelligent stock market investors.

Those who invest in great businesses, based on data and facts, have a dark secret. They are the happiest when the stock market falls the most, and they secretly wish for a market crash every day! Because when you invest in a great business based on the strength of its market and operations, your dollars are backed by that company's ability to generate cash and grow. Even if the market crashes, eventually the price will go back up. This is the main difference between investing in great businesses vs. investing in other things that do not have a measurable value aside from the market demand.

This week, one of those great businesses went on 'sale'...
This week's featured Stock Card:
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Universal Display's portfolio of patents and research capabilities gives the company a strong foothold in the OLED market. As such the stock price has grown by more than 200% in the past one year and 500% in the past three years. While we were perfectly Okay to pick up some more shares even after such price hike, this past week, we were exhilarated to see the stock's ~25% decline. The decline had nothing to do with the company's operations and everything to do with Apple's iPhoneX results. The investors got spooked by lower sales numbers of Apple's iPhoneX, and concluded that Apple may delay releasing new iPhone devices with OLED screens. While this may be true in the short-term, OLED is a well-run company, operating in a market that is expected to grow by 43% per year in the next few years. We welcomed the opportunity to make an investment using a 25%-discount. Go ahead, check the company's Stock Card!
Other Stocks On Our Radar:
Thank Ugach Sahaj, Bob Higgins, Anand Dandekar, Mark Taylor, and Bradley T. from submitting Stock Card requests this week. Take a look at these Stock Cards by clicking on their logo:
Checkout Walmart's Stock Card
Checkout Twilio's Stock Card
Checkout OKTA's Stock Card
Checkout Honeywell's Stock Card
Checkout Harley Davidson's Stock Card
Checkout Costco's Stock Card
Checkout ConocoPhilips' Stock Card
Checkout NUCOR's Stock Card


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Disclaimer: StockCard.io is not, neither operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on StockCard.io and Stock Card Weekly represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The Stock Card team may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall StockCard.io be liable to any subscriber, visitor, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on StockCard.io, or relating to the use of, or inability to use, StockCard.io or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way.
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