How did my investments do? (11/10/2020)
Looking back on my my analysis from this past summer (COVID Delta Part #1), the COVID Delta proved useful in the case of AAPL, AMZN, and AVAV–all of which I sold near their peaks and subsequently bought back at lower prices. It also highlighted the opportunity in EXAS, which I bought before its recent run.
It was less useful with ISRG and NVDA which have continued higher despite a significantly negative COVID Delta, and CVA and RTX which are flat or down despite a positive score. ARWR, FSLR , and KMI have also moved contrary to their scores, but those have had significant news in the interim which explains their direction.
Overall I don’t rely on the COVID Delta as my sole basis for buying or selling a stock, but I do find it useful as one of several screens. My goal is to find several techniques, each of which improves my investment performance ~1% per year, and I think COVID Delta will do that over time.
Here are a couple of updates as of 11/10/2020.
| Analysis | 11/10/2020Anticipated | 11/10/2020 Actual | COVIDDelta | |
| AAPL | Apple has been able to pivot quickly away from needing its retail stores during COVID and its products have benefitted from work-from-home. It has introduced a number of new products over the past months, including a new line of 5G phones. Its services business has continued to grow. | 20% | 45% | -25% |
| AMAT | AMAT has weathered COVID with relatively minor impact to revenue. Thesis that semiconductors will play an even bigger role in the future economy has strengthened. Presidential election shouldn’t have a major impact. “Other” businesses solar and display look stronger going forward. | 10% | 6% | 4% |
| AVAV | Aerovironment has continued to grow its defense footprint and make progress on HAPS. So far Starlink seems more complementary (wide area low capacity vs. HAPS which is potentially a way to put a lot of density in a particular area quickly). Unclear whether ag business is getting any traction. | 20% | 33% | -13% |
| CSCO | Cisco has an interesting mix of businesses that have been hurt by COVID (on-prem phone systems), and helped (WebEx), and some that are probably never coming back (legacy video conferencing). It could easily take them another year to get back to their pre-CoOVID trajectory. With significant innovation they could be a significant beneficiary of re-thinking the future work environment. | 0% | -17% | 17% |
| OLED | OLED experienced some loss of revenue due to COVID factory shutdowns, but has since recovered and is growing revenue and earnings. OLED adoption continues to grow, with televisions on track to exceed cell phones. They have also launched a vapor jet printing equipment venture which seems like an ideal acquisition candidate for AMAT. OLED for lighting purposes is becoming a reality. Finally, when blue OLED is perfected it will give a rapid 25%+ boost to revenue. The bad news—this stock is still very expensive. | 20% | 18% | 2% |