What would have happened to my reserve cash if traders on wallstreetbets had decided to take on OPTT instead of GME or AMC?
I’d be f*cked right now; losing my reserved cash, over 30% of my portfolio, completely. And that’s probably the best-case scenario.
Last week I took a short position on OPTT, a move that was prompted by the unprecedented rise in the stock’s price. I felt that the stock was being pumped following its crazy rise that continued for days because there was nothing tangible justifying the crazy rise.
The stock’s price went from $3.60 on Wednesday, 20th January 2021, to a high of 6.84 on Monday, 25th January 2021, during intra-day trading. OPTT literally doubled in just 3 trading days, I thought that was absurd (although not as absurd as GME).
As the stock kept spiking, I kept increasing my position, and all I told myself was that “for a company like OPTT, one thing is certain: It’ll eventually fall hard when the pumpers run out of steam”.
Holding on to my short position exposed me to too much risk than I anticipated when taking the position.
Lucky for me, I covered my short position today, 28th January 2021, as the stock went down by more than 14% before closing down by 2.68%.
I did make a 13% profit after covering my position, honestly, 13% wasn’t worth the risk. And I’m not comfortable, or happy if you may, with the volatility in the market right now, and the apparent traders’ behavior that is said to be consistent with a bubble-like sentiment.
We’ve seen crazy spikes in stock prices and I’m convinced that we are now investing our money in a crazy market.
And amidst all that’s going on in the market today, a quote from Warren Buffett keeps echoing in me, “Be fearful when others are greedy and greedy when others are fearful”.
With each passing day, I’m becoming more convinced that Cash may very well be king in 2021.
Henry John is a Stock Portfolio Manager that focuses on companies developing cutting-edge technologies.
Keeping track of cutting-edge techs, companies and stocks is what I do almost everyday. And I love it. Whether it’s artificial intelligence, 5g, or autonomous vehicles; I’m all in.
I’m a self-made millionaire who made most of his money investing in technology companies while working in finance.
Yes! I owe it all to tech and finance.