Take Partial Gains in Fiverr (FVRR)
We are getting closer to clearing two of the biggest hurdles of uncertainty out there. I am, of course, talking about the U.S. presidential election and the Pfizer and BioNTech vaccine news.
There are questions that remain around the transition of power from Trump to Biden, as well as the lingering uncertainty about certain state recounts. But the odds favor Biden taking office in January and lacking new and convincing information that’s the assumption I’m going with.
On the vaccine front, there remain questions about the eventual approval and then the timing and distribution of this particular vaccine, as well as the appetite for people to actually go get it (or any other Covid-19 vaccine) when it is available.
But still, news today that this vaccine appears 90% effective is big. Certainly big enough to potentially trigger an unwinding of pandemic play stocks.
We need to consider how vaccine developments could affect stocks in our portfolio.
I don’t anticipate making any huge, sweeping changes to our portfolio right away because of these developments. But I am considering a few incremental steps as we try to delicately weave our way through what’s sure to be an interesting end to 2020 and beginning of 2021.
For starters, today, I’m advising we take partial profits on one high-flying software stock. That company is Fiverr (FVRR).
Fiverr (FVRR) has been a major beneficiary of work from home trends in that it has helped businesses and freelancers work together all over the world. That’s been huge in a world upended by the pandemic. We got into the stock on March 5, just before Covid-19 hit and the market tanked. The stock abruptly fell 40%. But it roared back and in May we sold a quarter position for an 80% gain. This past Friday, FVRR hit an all-time high of 191.2. Even today, with shares off roughly 15% from their high we’re still up around 380%. Let’s take a little off the table to reward our perseverance and reduce some exposure should the trend turn south. Sell one-quarter position and hold the remaining half. SELL A QUARTER, HOLD THE REST