2017 has been an interesting year, so far. Many of my holdings reached and surpassed my estimate of fair value. All of which make me wonder if things are getting a tad bubbly.
My only buy in the past two months was Oaktree Financial (OAK) at ~$39.50. Even that stock has moved up nearly 15% in 6 weeks (currently ~$45).
Naturally, I’ve begun lightening my positions. Here are a few highlights:
- trimmed AAPL position by 30% in the $120s, as the stock spiked upwards in Feb. I wrote (May) covered calls on the remaining position. At $135, AAPL is no longer as cheap as it was when it traded at ~$90+, less than an year ago.
- sold 2/3 of IBM position at $178. My fair value estimate was $165. I wrote some calls, which got assigned. I might buy back into the position, if it drifts below fair value.
- I’ve been writing calls on my NOV and CFX positions; currently I have March 2017, $42 and $42.50 calls on them, respectively. I believe that they are both good long terms holdings; but may be ripe for an intermediate term pull-back.
- sold HNFSA (~$96) and SPE (~$15), respectively. I held HNFSA for over 3 years, and just grew tired, while SPE was a very small position to begin with.
As a result of all these moves, I now have 25%+ of my portfolio in cash. Calls written on many of my other long holdings (CFR, AAPL) are currently in the money. If they get assigned, I will have nearly 35% in cash, which would be some sort of a record for me.