Researching Individual Stocks. Worth the Trouble?

[TheCudder]

The majority of my portfolio is in ETF's, but I do own AMZN & MSFT, primarily because I follow both companies out of genuine interest...on both the consumer & enterprise sides of the two businesses. I bought in to MSFT at $40 off the potential of their cloud business (Azure) growth which has been a big part of driving their stock to $90. I bought into AMZN more recently (also primarily for AWS Cloud, but many other reasons as well), but my investment has done quite well so far.

If I didn't have a genuine interest in these companies I wouldn't have bothered, but I literally read follow the news of these 2 companies every day of the week lol. Sure you can roll the dice on stocks, but it helps to have a good feel about the companies plans and potential.

[Singuy]

I recently started with individual stocks, trying to find that new mega growth company. It now sits at around 30% of my total portfolio, and 70% of my total taxable portfolio.

My successes so far.

Amazon, bought at 800 so plus 50%+ after holding it for 1 year
Match group, bought at 16, 95%+ after 1.5 years
Shopify: bought at 60, 90%+ after 1 year
Bzun: bought at 16, +85% after 1 year(sold it or else 120% if I kept it)


Stinkers:
Chipotle, lost 1.5k and closed my position
AMD: my biggest position with almost 200k in this one stock alone. Was bag holding for the past 3 months, finally in the green but it's like a plus 3%+
Fit bit: sold it broke even
Go pro: sold it broke even

So as you can see, when the stock is good, it really flies. I am looking for multibaggers and essentially have put most of the eggs in AMD's basket. The danger is falling in love with a company and their products which potentially can get you into a world of trouble(yeah, never meant to own 200k dollars worth of AMD but here I am, after averaging down bunch the last 3 months).

[Tabs]

Stinkers:
Chipotle, lost 1.5k and closed my position
AMD: my biggest position with almost 200k in this one stock alone. Was bag holding for the past 3 months, finally in the green but it's like a plus 3%+
Fit bit: sold it broke even
Go pro: sold it broke even

OMG will Chipotle ever get their act together? Seriously, I mean it's a good brand with a good product. I love eating there myself. I also think that, at this point with all the bad news circulating and a new management change, I think NOW it's a good value buy.

AMD, uh, I would start to wind it down a bit. Ryzen made a good showing, especially with all this Intel FUD over Spectre/Meltdown, and Threadripper is literally ripping Intel's i9. Also, their inventory of current gen cards are sold out amidst the crypto craze.

But to me, overall good news also means it's time to take a bit off the table and pat yourself on the back for a nice call. I don't know what % of your portfolio that constitutes that single $200k position, but I get the sense it could be overweight. Intel still knows how to make CPUs, nVidia is still king of high end GPUs, who knows what will happen next with the crypto craze, and does AMD even have deep learning? I don't know but I do know nVidia is still the king with Volta. Needless to say, AMD is still very much stuck between a rock an a hard place.

Sadly, I agree both GoPro and FitBit are stinkers from a trading standpoint. I like both companys' products, but I just don't think they're going anywhere from a growth thesis standpoint. Biometrics and video recording continue to improve on the smartphone side, and it's just really hard for these two to make money with specialized hardware....

[Singuy]

But to me, overall good news also means it's time to take a bit off the table and pat yourself on the back for a nice call. I don't know what % of your portfolio that constitutes that single $200k position, but I get the sense it could be overweight. Intel still knows how to make CPUs, nVidia is still king of high end GPUs, who knows what will happen next with the crypto craze, and does AMD even have deep learning? I don't know but I do know nVidia is still the king with Volta. Needless to say, AMD is still very much stuck between a rock an a hard place.

Here are my reasons why I'm still bull even though I got my ass kicked in 2017.


1. The biggest portion of AMD's revenue is still on the table. Their Epyc server chips should be replacing almost all single socket intel chips due to its clear I/O advantages and AMD's ryzen laptop line has just started. These are two areas in which Intel dominates and has 99% of the market share. It's kind of wishful thinking to anticipate AMD taking 50% of the market share, but even 10% of the market share would double AMD's current revenue.


2. PS4 and Xbox may start refreshing their consoles like cell phones for the future. We have already seen this happen, and may continue which means AMD will be the only viable choice going forward.

3. Intel-AMD collaboration will bring Radeons into high end laptops for the first time. Another area AMD was never in.

4. AMD mobile in 2020 is promised to be 5x faster than today's mobile chip. Today's mobile chip is already almost as fast as Intel's CPU side, but just blows them out of the water on the GPU side.

5. 7nm 7nm 7nm. AMD's 7nm is coming in 2019 using an enhanced Ryzen core. This will be the year that AMD will surpass Intel in performance by a HUGE amount. Intel's 10nm has been delayed for the past 3 years and are still in trouble. No one talks about it and they keep releasing 14nm refreshes like Coffee lake, and now Whiskey lake. Their 10nm is broken, and based on how much their CEO have sold their stocks(all of it except the min he is required to hold), things are not looking up.

6. AMD is lacking in AI, but their more competitive AI purposed GPU is coming out on 7nm by the end of this year. Also a lot of rumors(including a report by CNBC) that Tesla is working with AMD on autonomous driving (not to mention Jim Keller, the brain child behind AMD's infinity fabric is working for Tesla now). We know that Tesla has dropped Nvidia based on the Q3 earnings call and Nvidia's latest autonomous car presentation during CES(noticed they have so many automobile partners with a bunch of logos on the slide, but Tesla is not one of them).

AMD is a 10 billion dollar market cap company (Intel is 200billion, Nvidia is 100billion). As long as their CPU/gpu are competitive or better than the competition, they will continue to gain market share from areas where they had none before. The only place AMD can go is UP if they have less than 1% of the server market and the laptop market.