It is time for a brand new 2021 post.

I have made some adjustments to my portfolio:

  1. I stopped adding funds to my P2P account.

I was never a big fan of P2P investing. In my part of the world, P2P lending platform customers mostly are not able to get loans in the bank and therefore use P2P lending companies as a last resort. Most of the time there are valid reasons why banks do not provide loans but, in my opinion, P2P lending is using the situation to get extra cash. Yes, I understand there are risks involved and we live in the free-market therefore P2P lending companies have and can charge higher interest rates. Anyway, I decided I do not want to be a part of this. All income from P2P lending will be shifted towards the share market.

  1. Cherry-picking

Just after New Year’s, I have added some funds to my share trading account (I hope it is a good sign and an excellent start to 2021). Most of the investors are obsessed with cherry-picking or finding a magic formula for company picking. I decided to form some of my own strategies and follow a different way for selecting companies: market capitalization around $ 200m – $ 750m, debt up to around 20% of market capitalization, gross profit more than 30% of market capitalization, and positive EPS. It is a good sign to find a substantial free cash flow amount in the income statement. Another good sign – recently reported company officer dealing. I consider companies meeting the criteria to be successful and with high potential. There is a high potential to grow or be acquired by larger companies. Looking forward to reverting to this post at some point in the future and checking if I made the correct choice.

The next topics I am looking forward to diving into are trading on margin and following how does company earnings report affects the share price. I am especially interested in the earnings report for companies that investors have high expectations of – what happens with the share price in two weeks period before and after earnings reports are published.