Time to trim SHOP.TO position?

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I have 4 shares of SHOP.TO making up approx. 8% of my TFSA portfolio. Since I’m only up about 12% on that stock, I’m considering selling 2 shares now so I can buy more shares of other stocks I have in that portfolio that I think will give a better return in the long run (like LSPD, DCBO, DND). I would selectively average into those positions but I’d like your thoughts on this. I know you’ve done a similar thing in the past with SHOP but you also had a far greater return since your cost basis was very low compared to mine.

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Asked on October 10, 2020 3:15 pm
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HI there,

This trade makes sense if you believe that LSPD, DCBO and DND have greater upside than SHOP or, you want to diversify. Keep in mind however, that just because a stock price is high does not mean it won't deliver considerable returns. SHOP was considered 'expensive' at $100, $500, $1,000 and now $1,500. I have decided to keep the remaining portion of my SHOP because i think it will continue to deliver impressive returns. If I thought SHOP would top out here, I'd sell the remainder of my position.

If SHOP is the only tech position - then perhaps diversifying into other tech options is a good idea. Either of those three would make excellent choices. LSPD has run lately, (as has DCBO) and DND looks to be a little under pressure but is also the best valued. Of those, I think LSPD and DCBO provide the biggest upside potential. DND is too new, and needs a few quarters to prove itself before I'd lump it in with the others.

That being said - I own all 3 of these - and I own them because I believe in them all (plus SHOP). Holding SHOP and 1, 2 or all 3 of these would be a nice looking basket of tech stocks.

Mat

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Posted by Mathieu Litalien
Answered on October 10, 2020 5:14 pm
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