Portfolio Update: New Addition (BABA; November 12, 2014)

by FI Fighter on November 12, 2014

in Stock Portfolio Updates

Screen Shot 2014-09-21 at 8.51.25 PM

Now that Rental Property Side Hustle #1 and #2 have closed and been leased out, I’ve afforded myself a little bit more breathing room. It wasn’t easy, but I finally paid off all my debts this month (courtesy of my signing bonus posting)! 🙂

Well, not quite all my debts, as I still have mortgages for all FIVE of my rental properties and TWO additional mortgages for the side hustle deals. But after paying back my partners, it sure does feel like the weight of the world has been lifted off my shoulders.

I don’t have much free cash… yet, but I used today as an opportunity to load up on more Alibaba (BABA) stock. Just like the first round, buying shares in BABA this time around is again purely for speculation on future appreciation. This particular move is not necessarily a strategy for funding early FI, but more of a complement to my rental income stream.

Investors will debate cash flow/dividends vs. appreciation all day long until the cows come home. Rather than just outright picking a side, I’ve discovered, my preference is to have BOTH (what can I say, I love diversification). I see the value in cash flow/dividends for the immediate term, and I most definitely also see the power behind appreciation for the long haul.

So, today I added to my BABA position by picking up 18 shares at $116.30/share. No bargain here… But I’m trying to keep investing as simple as possible:

  • Identify stock of interest.
  • Purchase as many shares as possible as free cash permits.
  • Sit back and enjoy the ride.

I now own 118 shares of BABA.

I don’t need to monitor this position every day… or even every month. I’m an income investor at heart, but I will take flyers on growth stocks every now and then. We’ll see how this one plays out…

I must say, it feels good to finally have some free cash again! 🙂

Fight On!

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{ 12 comments… read them below or add one }

1 billyNo Gravatar November 12, 2014 at 9:52 pm

Just out of curiosity, do you set a strategy of hold/sale limit? For example, do you plan ever to sell Alibaba at what price?

I thought the conventional wisdom is investing in individual stocks are dangerous moves. After all, this is not much different from other forms of gamble. On the other hand, all those who continuing buying stocks like BABA and Tesla have been happily seeing their holdings going up, up, up, and more up.

Reply

2 FI FighterNo Gravatar November 15, 2014 at 10:40 am

Billy,

Sure, at some point I may elect to sell BABA. Whether to fund another rental property, or to cash out on capital gains. But the mindset going in is to just hold it for awhile (long-term). That is, I will give it ample time to season, and don’t need to concern myself with the short-term market volatility.

Individual stocks can be dangerous… but one can mitigate risk by diversifying their investments. In my case, I own rental properties for income, and also invest in 401k and Roth IRA, which are comprised of index funds.

I wouldn’t feel comfortable if my entire net worth/investment portfolio was tied up in just a handful of stocks, but that’s not the case here. You just have to figure out your own risk tolerance before making any decisions.

Cheers!

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3 NunoNo Gravatar November 13, 2014 at 3:08 am

I guess you betting BABA will follow GOOG that went public around $90 and the rest is a well known story…

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4 FI FighterNo Gravatar November 15, 2014 at 10:41 am

Nuno,

If BABA can mirror GOOG even the slightest bit I will be very happy with the investment! Hoping for the best 🙂

Take care!

Reply

5 LynxNo Gravatar November 13, 2014 at 6:30 am

Nice move on the Alibaba purchase. I have been itching to make a purchase myself. Maybe I will pull the trigger on another pullback. Looking forward to hearing more on your investing per suits now you have free cash flow again.

Reply

6 FI FighterNo Gravatar November 15, 2014 at 10:42 am

Lynx,

Yeah, there most likely will be more opportunities coming up. Stocks tend to correct a bit when we get closer to the holiday season. I will also be watching closely as I anticipate finally having some free cash to invest with. I would love to add more shares to the portfolio if the stock pulls back.

All the best!

Reply

7 MaryNo Gravatar November 13, 2014 at 10:55 am

You did great at picking Baba stock earlier. I kick myself every single day for not picking up shares at $85. I finally purchased 150 shares and am in the green. Holding it long term also.

Reply

8 FI FighterNo Gravatar November 15, 2014 at 10:43 am

Mary,

Yeah, definitely, $85 came and went in a split second. It looked tempting to me as well, but unfortunately I didn’t have any cash at the time.

These growth stocks tend to swing violently as they establish their support levels, so we’ll see if BABA heads back south again soon. I’ll be keeping my eyes open with much interest.

Take care!

Reply

9 A Frugal Family's JourneyNo Gravatar November 13, 2014 at 5:54 pm

Congrats on the newfound cash flow! Wow, over $13,600 held in one company tells me you have great confidence in the future of BABA. I don’t know much about the company but wish you nothing but continued success. AFFJ

Reply

10 FI FighterNo Gravatar November 15, 2014 at 10:44 am

AFFJ,

Haha, yeah I’m betting on this one! It’s my only stock at the moment, but I still would like to add more shares to my position.

I recently met an investor who picked up 1000 shares IPO… He’s feeling pretty good with his decision today!

All the best!

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11 DoneByFortyNo Gravatar November 14, 2014 at 10:37 am

The main thing is to have cash freed up to make these sort of calls. Like you said, people will debate any particular investing strategy. The thing they have in common: the capital to invest in the first place. Glad to hear you’ve knocked out some debts and can make these sort of moves.

Reply

12 FI FighterNo Gravatar November 15, 2014 at 10:47 am

DoneByForty,

Thanks! Yes, it feels wonderful to have knocked off some of that debt. Leverage can be a powerful ally, but you also can’t put a price on peace of mind.

Take care!

Reply

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