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The week that was:
A few weeks ago, when the market started to recover, I mentioned that it was likely just a bear market rally, and that the market would soon go down again. Now it seems like the prediction is coming true. This week, the market and especally Nasdaq has fallen down a steep and tall cliff.
Some investors panic during a bear market, and sell all their stocks. However, bear markets present the best opportunities to buy blue chip stocks for the long term. As we are in the midst of a bear market, I am using every opportunity I get to buy a few shares of high quality companies at good prices. These companies might underperform in the short term, but they will usually do well in the long term. I made several such buys this week using cash I had raised a few weeks ago.
An example of such a company is Twitter. Several weeks ago, I explained in my newsletter why Twitter is a good company. Twitter is profitable, and it has good growth prospects. In fact, this week, Elon Musk bought a 9% stake in Twitter. The stock price went up by over 30% this week. This validates the fact that Twitter is an undervalued company with good prospects.
Buys -
Bought 5 SBUX at $81.59
This week, Starbucks workers have started creating trade unions. A trade union is a group of workers who protest for better pay and working conditions to their employers. The Starbucks workers have been demanding better pay and better treatment from SBUX, despite Starbucks being one of the most generous companies to workers. The trade union movement has caused the stock price to go down. SBUX is a great company, and I expect them to sort out this problem soon. I used the opportunity of the good price to add to my position. SBUX is among the best companies to buy for the long term and is going for a fair price.
Bought 16 UBER at $32.06
I started a new position in UBER. Now during the reopening, people are starting to go out on vacations and work, and UBER should start to get more business because of that.
Bought 2 ADSK at 205.73
Autodesk is a good, profitable company with good products and growth prospects. I use one of their products for my engineering elective class. ADSK is at a good buying price, so I used the opportunity to start a new position.
Bought 2 NFLX at $360.48
Netflix is another company I started a new position in. NFLX has struggled in recent years because of competition and lack of growth, so the price has taken a hit. The stock should do well long term because people like the service and it is reasonably priced. Even if they raise prices, people are not going to disconnect their service. I used the opportunity to buy a few shares.
Bought 3 SAP at $109.42
SAP has a good product and a good, growing dividend. SAP is moving to the cloud and this is impacting their results. In the short term, during the transition to the cloud, SAP may underperform. But after the transition, in the long term, SAP will overperform.
Bought 1 SWK at $139.52
SWK is a blue chip company with a dividend that has been growing for 50 years! For the past few years, the price has been going down. SWK has a pattern of recovering, every time the price experiences a sharp fall. I used the opportunity of a good price to start a position in SWK for the long term.
Bought 2 WDFC at $187.31
WDFC's main product is a lubricant for household items. Lubricants are mostly made out of oil, and now the oil prices are rising. WDFC is clearly impacted by inflation and rising oil prices. This week, the quarterly results came out, and they were surprisingly excellent. The fact that WDFC could overcome such a major challenge, shows how good of a company it is. If the price decreases, I will definitely add more to my portfolio.
Sells -
None.
What I am watching out next week:
I will continue to look at how the market does the next few weeks, and if the Federal Reserve makes any comments. The earning season is also coming up in a couple of weeks, and some companies that I own will report their results.
Thanks for reading my newsletter. See you next week for more interesting updates to the market and my portfolio! Happy investing!