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.
10 thoughts on “I’m out of OPTT: 13% wasn’t worth the risk”
congrats! Maybe I should have sold it at the top for a mini gain but I’m just riding it out and am still up a few bucks. Quite a few of my small caps are crazy volatile right now… I’m just leaving them alone bc whatever is going on is out of my league. I have a similar position in Nokia and it was up 84% at one point yesterday! back down to normal today.
I exited my Nokia position, along with many other small-cap stocks.
Generally, any stock with a price below $30 and a Market Cap below $25 Billion is getting offloaded.
I’m not comfortable with too much volatility, and if a stock is too volatile I dump it.
For me, it’s investing and maybe for others, it’s trading. Hence, I’m not looking to trade a stock that will double my money in few days. I’m in for the long run.
yeah I’ve been thinking about doing the same but historically have pretty bad timing so have been worried about screwing myself. It just seems obvious that something bad is about to happen and I should liquidate just to have some extra cash on hand when it does. Then again, knowing me I would miss that too lol. Well anyway I have one mid cap stock I’m going to give till monday when it has a tendency to bounce up, then I’ll trim it and start building a better cash position.
What mid-cap stock is that?
BILI. rather, I guess it’s not a midcap anymore but it was when I bought it. I like the stock and I think it can still grow down the road but it’s the only position I have where trimming would make any difference to my budget. Otherwise I could probably pull small profits off of some of my other positions. Even if it’s just a little from each I guess it adds up.
(do you have spam filters set on high here? It’s making me wait to post this.)
Sorry about the spam filter, guess I’ve to moderate it.
When did you enter BILI? It was a winner last year.
i got in at $25, took out profit at $50, got my first real taste of FOMO by $80, bought back in, panicked, sold back out, panicked, bought back in at $100, and it was going for a good climb after that up to 140 but has been struggling the last few days. Luckily I kept some of my initial investment so I didn’t screw myself too hard through all of that, but all the panicking was a great lesson in “don’t ever lose your cool like that again.” That was the kick in the pants to start really learning about what I’m doing.
(yeah it tells me “you are posting comments too quickly. Slow down.”and makes me wait half the day.)
I guess we all need one or two panicked sell/buy to start learning how to hold our position on a sound investment, long term, through highs and lows.
“Courage taught me no matter how bad a crisis gets … any sound investment will eventually pay off.” — Carlos Slim Helu
Sorry about the spam filter.
And I think OPTT can still go up again, hence my decision to take the profit that was at the table before it disappears. Haha