Long-term growth stock portfolio (2021-09-24)

In the U.S. stock market, sign of sector rotation occurred again this week. Growth stocks were once again abandoned, this can be seen from the ARK fund, ARKK and ARKG fell 3.6% and 6.29% respectively; funds were also seen to be transferred to traditional stocks, such as Visa (US stock code: V), Master Card (US stock code: MA) and American Express (US stock code: AXP), they rose 4.44%, 4.41% and 7.2% respectively. Chinese stock Didi Chuxing (US stock code: DIDI) continued to be suppressed and fell 4.1%, while Facebook (US stock code: FB) fell 3.22% due to news that Apple’s mobile phone policy had reduced future advertising earnings expectations. Currently, the market is waiting to see when the Federal Reserve will implement the date of debt reduction and interest rate hike, but the market should have almost fully anticipated that it will start from the end of this year to the beginning of next year, so I think it will not have a big impact on the market.

In terms of Hong Kong stocks, except for Tencent (HK stock code: 700) that did not change much throughout the week, my other Chinese holdings continued to fall sharply. Alibaba (HK stock code: 9988), China Merchants Bank (HK stock code: 3968) and Xiaomi (HK stock code: 1810) fell 6.84%, 8.2% and 3.91% respectively. The Hang Seng Index of Hong Kong stocks has fallen by more than 11% so far this year. Many investors have been very disappointed with the performance of Hong Kong stocks. I believe that many short-term investors have begun to withdraw. I think this is the time for long-term investors to be greedy when others are fearful.

In terms of stock options, Didi’s short call whose exercise price is US$9 with expiration on September 24 has expired. I will consider opening another covered short call with expiration of next month or directly selling Didi stocks to concentrate funds on my four main Chinese shareholdings. As for another Xiaomi short put option with strike price at HK$22 and expiration on September 29, and it will expire next week. I believe that it is likely to be executed to buy at HK$22 under the current market condition.

The last one is a purely speculative Evergrande short put. The strike price is HK$2 with expiration on November 29, and there are about two months to expire. This option is now not far from the exercise price. Anyway, it is just a small bet for me. Please note that regarding this kind of high-risk speculative activities, one should never invest too much fund in it; otherwise it will certainly affect your emotion badly. Rumors said that there is a great chance to spin off and restructure the company, and to inject capital from state-owned enterprises. Let’s look closely on the restructuring terms and conditions if it really so happens later, anyway there is a high chance that existing shareholders will be diluted.

China Evergrande New Energy Vehicle Group Ltd (HK stock code: 708) reported that it was about to suspend operations. The company’s investors have definitely suffered heavy losses. Therefore, investing in such a company really needs to see the company’s development direction. For example, Evergrande Auto is a company that promotes only the ppt sales at the beginning and blindly hire a team of foreign experts at exceptionally high prices. You have to be very careful about companies that burn money to develop like this. I saw some people on the Internet said that they invested in this company purely because of the concept of new energy vehicles. Now that the stock price plummeted after half a year, they stopped the loss and left the market with heavy losses. You must avoid this kind of investment mindset.