MTGE is now a hold stock considering that it would only gain 5-15% including dividend. There is not much room in the upside. Also, considering the downside risk of holding onto MTGE, I feel at the moment it's not that great of a buy. I chose to take it off my portflio because I've decided to invest in something more exciting (still researching). You can still choose to hold it for receiving a solid dividend return. Either way would be fine.
Stocks to Watch More Closely (SCTY and TSLA)
As most of people interested in stocks knows about the great run that SCTY and TSLA had recently, and there were many debates about the stock in regards to their relatively high valuation (~10 B now). From fundamental point of view, both of the stocks mentioned is vastly overvalued. However, if you look at it long term, it could be like investing in Apple when it just first started getting profits when they had a big slump. You could also say that this stock is similar to Netflix, LinkedIn, and Amazon, where they had very high valuations and still going strong. Those stocks had some correction but eventually back to the same projectory as before. The long term price for SCTY and TSLA will last unless really bad news came out which causes insititution to sell off their holding in those stocks.
The reasons why SCTY and TSLA's valuation is this high were due to many factors. The main reason due to the battle between Ellon Musk and the Naysayers (short sellers). Without this many short's covering, the stock price wouldn't have this high. However, even without the short sellers, Tesla Motors indeed executed well this year with good customer service, sales (first time profit), and the innovation of the cars as well as the car charing infrastructure plan, and thus created a sense of "hype".
No one can predict the future. Intially I had doubts about SCTY and TSLA's profitability in the short term, but I am starting to believe this so called "hype" will last for a while as long as TSLA continues to innovate and improve their sales and margin, and as long as peopel are still buying and loving Tesla cars. Innovation is what we need right now to improve the sentiment of this beaten down economy and I feel we do need more companies like SCTY and TSLA in the US. Therefore, regardless of investing in the stock or not, I will be rooting for them.
I did put a small position in TSLA with long term thinking in mind but it's more of a gamble then higher percentage bets. I don't consider I am really investing in this stock considering the amount I put into TSLA stock is only small percentage of my portfolio. However, if the stock happens to go down due to correction, I would be watching closely to add some position for short term gain. On the other hand, I might exit some positions if I think I gained enough from the stock if it did go up in price and will put in more later if opportunities arise.
Updates:
-To replace MTGE with a more intereting stock, I found a promising small CAP company worth investing in. This company is Amberalla Inc. (AMBA). This stock has a sound fundamental and is a niche chip maker with good IP in HD video and image processing SOCs. I am not sure how well this company will do long term but it definitely still has room to grow.
-In addtion, I've also decided to add Yahoo (YHOO) in my portfoloio considering the recent buying pressure and their new bets. It's worth the risk considering it's low P/E ratio and long term earning growth potential.
-Another good buy that I've added in my portfolio is Synaptics(SYNA), it's the market leader for touch panel solution. They seems to do fairly well recently with design wins and the buying pressure is there.
- Added Intuitive Surgical (ISRG), LinkedIn (LNKD), and Sina (SINA) to the stock watchlist.
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