After very briefly reaching new highs last week, my portfolio tumbled again this week. The fall was instigated primarily by US tech, which after a brief rally on Monday, experienced continued negative sentiment through the rest of the week. There is quite a lot of media attention on the big US platform businesses, calling for regulation in the wake of the Facebook scandal. In my portfolio, all my US stocks took a hit – Amazon in particular after some Trump tweets. While I think data protection issues are a real concern for the likes of Facebook, I think broader calls to regulate or break up the likes of Amazon as an anticompetitive monopoly are a little absurd. Amazon’s disruptive impact on a whole host of retail markets may hurt its competitors, but that’s part and parcel of the competitive process. The overall benefits of this process to the economy, in the form of lower prices and increased convenience for consumers, are enormous. We should be protecting competition itself, not protecting inefficient businesses from competition. That said, I hope that Amazon doesn’t make too many enemies with friends in high places…
I took some evasive action early this week in the face of the US tech weakness, selling out of Arista Networks to raise some cash. I also sold out of IG Group after having second thoughts, following announcement of the ESMA proposed leverage restrictions. I knew this was coming when I bought the shares recently, but on reflection I realised I didn’t really have the conviction to hold on the face of a falling price. I’m coming round to the idea that I need to be looser with my momentum strategy and stomach more volatility in the current markets. For that it’s important to have a lot of conviction in the shares I’m holding.
On a more positive note, I bought back into Bioventix this week after some very encouraging results. This is one of my favourite businesses and I was concerned that I had made a mistake in selling out in December. However, fortunately I was able to build a big position at a lower price quickly after the results were announced and am already sitting on a 15% gain this week.
I’ve discussed Bioventix previously so won’t do so in much detail again here. The main takeaways from the recent results were some positive noises about Troponin but more importantly that Bioventix was able to make up the shortfall from the expiration of its terminated contract without any contribution yet from Troponin. To me this suggests there is likely a lot more growth left to come, especially once Troponin gets going.