On Jan. 2, 2019 we went long shares of Alphabet Inc. (GOOGL) - which show a 26% gain!
We were able to increase our overall return with premium collected selling calls against our shares.
However, this pick did not create more alpha compared to just owning the Nasdaq 100 (QQQ), which was ended up 36% in 2019.
Not every pick is going to outperform the benchmark every year, but when our thesis changes in company or sector we must rebalance our portfolio.
Alphabet Inc (GOOGL) became a top tick last year was because of the Alphabet’s dominance in online advertising and it’s growing business in the cloud space, which has more than doubled in less than 24 months.
Alphabet’s most valuable asset is Google and its success has been achieved through speed, utility, and search which has become embedded in our daily lives with the use of the Internet.
Also, it seems like when a once-thriving entity becomes a conglomerate, it becomes a laggard to growth-focused companies as we saw in 2019.
There’s a lot of exciting stories under the Alphabet umbrella, but as individual investors, we have to be smart with our invested capital.
Because of the decade long surge of money pouring into passively managed index funds, companies don't have to split their stock in order to appeal to mom and pop investors.
With shares trading at $1373, that's just unrealistic to tie up hard-earned capital in a laggard.
Similar to Apple, Big Tech will continue to face hurdles with the U.S. Justice Department Antitrust Probe.
That is why it’s time to drop this from our portfolio and lock in gains.
Action to Take:
- Sell All - Alphabet Inc. (GOOGL) at Market
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To your wealth, freedom, and options!