2020 Week2 model portfolio update

We added Tencent and $FUTU, trimming $BABA and $SE

Overall performance:

Over the second week, our favoured growth names continue their strong performance. The Long Equity Part has done 18.87% (or 15.32% net of cash) for us vs. Nasdaq’s 0.19% & ARKK’s 16.70%

Our protective option overlay, however, has been a major performance drag, which proves our cautious outlook into 2021 to be temporarily wrong. We are monitoring these options closely and we think potential future corrections can be huge due market structure. Taking off protections after big rally is sometimes the biggest mistake one can make.

Overall our +10.24% YTD isn’t too bad given limited downside risk.

We have made some position changes due to new ideas and valuation concerns.

^ Email us hey@deepyield.io for more details. The model portfolio is for educational purposes.

New trades:

We have made below trades based on our new ideas & valuations:

We think $FUTU and $TCEHY are very under-valued for their great growth ahead.

$FUTU has the potential to become next-gen-fintech-giant.

$TCEHY is also misunderstood by the market - we think it’s a once-a-generation opportunity at this price.

We also added to $XPEV given we're having more confidence in its R&D direction.

We closed out $BABA due to an updated growth outlook - we think Chinese e-Commerce will see major disruptions in near future, with new forms of social e-Commerce and same-city fresh-goods e-Commerce battle continue to dis-favour $BABA.

We close $BILI because it has gone up too much too quickly, breaking through to our covered call strike level. We look to add opportunistically.

Partial trimming of $SE $SQ $JD is for new buys.

Make sure you follow us to read our detailed write-ups.

Full holdings of our model portfolio:

Highlighted are our new positions

$BIDU has become our largest position due trimming of $SE and $SQ, and its own rally. $BIDU’s accumulation in AI R&D over the years might start to pay off as they pivot to provide software solutions for Auto-driving with new JV. We also think $BIDU’s valuation is quite cheap.

we have not changed our options overaly from last week except for closed positions.

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