Paralegal Chris reveals how he is successfully navigating the markets in our latest What I'm Trading article.
Hobbies: Weightlifting; long drives; bushwalking
How long have you been investing?
Nearly five years now. I started straight after high school at the beginning of 2019. Stake was the first brokerage I ever used.
What was your first investment on Stake?
I bought Lattice Semiconductor Corp ($LSCC).
I was just browsing and based my pick on the name, chart and the industry. I was of the view that semiconductors were important. I then listened to a Lattice earnings announcement from the CEO and read some analyst opinions on the company.
I bought US$55 worth of shares and then sold them for like US$56. It felt good to make some money, even if it was so small.
I then bought in again and the stock very quickly went from US$7 to US$21, at which point I sold again. But now it’s at around US$75 so maybe I shouldn’t have.
Define your investing style.
Risk-on with a purpose.
My philosophy as a young person is that, unless you have a lot of capital, I don’t think it’s always best to invest in a long-term index-based strategy. When you convert your returns to dollars, the return is not large enough for me to justify the equity risk premium.
Accordingly, my current strategy is focused on a small number of high conviction stocks that I’ve heavily researched. I think this can work well especially when my time horizon is longer given my age.
There is obviously a lot of risk with this strategy. I can take on that risk at my age given I don’t have any other major commitments like a family or a mortgage. This isn’t necessarily what someone would advise me to do. But I’m willing to take on the risk.
What’s in your Stake portfolio right now?
My main position is in Latin Resources Limited ($LRS), an Australian company developing a lithium project in Brazil.
I’m in agreement with the view that we are going to progress to a clean energy future. This doesn’t mean that I think coal and oil are disappearing in the short term. But the trends show growth in the clean energy space.
All legacy automakers are building a range of electric cars and I don’t buy into the idea that there is an oversupply in lithium in the short or medium term.
How are your returns so far?
Roughly 200% up. These kinds of stocks are quite volatile.
Any other investments that are not on Stake?
I have superannuation with an industry super fund.
What are you watching? Why?
I’m watching Winsome Resources Limited ($WR1), another lithium player. I generally keep an eye on the ASX 200 as well. I think Transurban ($TCL) and Lendlease ($LLC) might be undervalued, but I need to do more research. Evidently, those stocks are not as risky as my current investments.
Do you have a trading or investing role model?
I think I most appreciate Peter Lynch. I agree with his view on investing in companies you understand, and not necessarily those that seem to be doing well. He also has an emphasis on laying the groundwork for your financial future which I find helpful.
What’s a piece of advice you’d give a newbie?
Be prepared to lose if you try something outside the realm of index funds. Those are the tutorial fees you must pay.
What’s one mistake you’ve made and what did you learn from it?
I’ve made a few. Selling because of large consecutive drops in price has burned me, but also saved me. It’s a double-edged sword.
I bought Appen ($APX) at $24, sold at $13 and it’s now worth $1.05. So I look back at trades like that, initially with disappointment, and then with relief. It’s just one of those things.
If you were to buy a US or ASX stock or ETF right now, what would you buy? Why?
Winsome Resources Limited ($WR1) are in a similar position to where Latin Resources Limited ($LRS) was when I bought stocks in them, although I wouldn’t hold WR1 for as long. They are exploring in Canada, where it’ll likely take them longer to develop a mine than LRS in Brazil. So I would sell when they (hopefully) have a good couple of results.
The personal views in this article do not reflect the views of Stake and do not constitute financial advice. As always please do your own research before investing on Stake. Past performance is not a reliable indicator of future performance.