Hello friends! I hope your week went well and wish you all a wonderful weekend! Today I’d like to start by reviewing a fairly recent trading play I did and am rather proud of. As a hint, you’ll see why I’m proud of this play in the upcoming net worth update. You can always find a list of my net worth updates here. If you’ve read my last article on achieving tech-level performance without tech stocks, you might have some idea of what’s coming with my next update.
Some background about me, if you’re new to this blog:
- I started a new job in January 2020, and was otherwise broke with no savings beyond what I invested
- I started investing just over a year ago with everything I had, about $10,000 CAD
- During the market crash, I had unrealized losses of $8000 CAD
- 80% of my networth was wiped out, I had $2000 CAD to my name
- Prior to March, I never day traded (nor do I ever plan on day trading for a living, I tried it for a week and a half, made about $3000, but decided it wasn’t for me)
- Prior to March, I never really took investing seriously
- I did a LOT of research and learning, and chose to pick stocks
- I do not invest in ETFs or mutual funds at this point in time
Let’s start with the play:
By mid-March, I managed to save a few paycheques. I used this to purchase 1oz of pure gold from the bank during the crash. Sold my gold earlier this month around $2000 USD for a modest 15% gain. Simultaneously, I took control of my pension from my previous job (defined benefit that would’ve paid me about $300/month for life after age 65).
It took about 2 months to get my OMERS pension CV transferred over to my RRSP (which also had other issues). I bought 3 cross-listed stocks on the TSX and had them journaled over to the NYSE. The 3 stocks I bought were in the utilities sector.
I shorted one stock during their special distribution of shares (1-for-4 special distribution). I received the special distribution and managed to capture additional profit from short selling, providing a 33% return on capital employed. With the proceeds from this sale, I expanded my portfolio into other sectors to help buoy my portfolio. Using the proceeds from the gold sale, I managed to buy back 2/5 of my original position in the stock I shorted, at a lower price.
The proceeds I used to expand my portfolio went into 2 stocks, one of which is sitting at about a 10% gain and the other is sitting at about a 40% gain. I shorted one of these stocks for an additional 10% gain and bought back in as it started a downward trend from early-mid August
The position I bought back is only just now approaching the price I originally sold it at, for an additional 15% gain. While my special distribution of shares, which I kept is sitting has appreciated another 10% or so.
You’ll see the results in just over a week with my next net worth update, I’m still thinking on my next move. I could sell my positions and walk away with some very tidy gains to use towards building my dividend portfolio.
Total profit thus far $5500 CAD. Majority of the profit came in the last few days. My gains could’ve been better, but… it’s a learning experience and I’m fairly happy with making $5500 CAD in about 3 weeks. That’s over 100% return on capital employed!
I’m hoping it’ll work out over the next few weeks, as I haven’t sold yet. Why? Because both of them have upcoming stock splits at the end of the month.
Boom or bust? Find out next time!
What about you? Do you have any success stories you’d like to share? Or tips or advice?
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