Kim Bolton, president and portfolio manager at Black Swan Dexteritas
​Focus: Technology stocks

MARKET OUTLOOK

These are stressful times. As we worry about our own health, the health of our families, friends and business colleagues and the disruption of our daily routines. One item you don’t have to worry about is your investment in the BSD Global Tech Hedge Fund. Our investors count on us to take decisive action in terms of preserving their capital and position them to actually capitalize on whatever future scenarios play out and we are delivering.

So far in the month of March, your BSD Global Tech Hedge Fund has not only protected our year-to-date gains, but contributed to these gains. You are probably wondering how the BSD team managed to make money in these tumultuous times. We always have a hedge on our stock portfolio, but as the stock markets continued to melt up in late 2019 and early 2020, the BSD team bought some out-of-the-money March 31 Nasdaq puts to limit the hedging costs. The sudden stock market collapse in late February and March drove these puts well into the money and we took profit on these puts last week.

We have no “crystal ball” into the future, but your BSD team, like most market participants, expect a significant economic slowdown for a period of time until the COVID-19 pandemic is brought under control, which will be followed by an economic recovery. Your BSD Global Tech Hedge Fund is currently 75 per cent invested across a number of tech vendors and end-users, with a 75 per cent hedge overlay on the notional value of the stock portfolio, and a 25 per cent cash position ready to be deployed across a compelling list of tech stocks.

The BSD portfolio management strategy and tactics have a proven track record of competitive returns, together with a hedging process that limits drawdowns and, as illustrated recently, can generate alpha, even during black swan events. The Black Swan Dexteritas motto – Prosperously navigating unexpected events with great skill and agility – is a credo the BSD team is proud of. I would like to ask you to consider investing additional monies in this winning BSD Global Tech Hedge Fund mandate and share this good news investment story with your friends, family and business associates. We could all use some good news like the BSD Global Tech Hedge Fund in these uncertain days.

UPDATE

Shopify bought at US$311.74 on Oct. 8 and sold at US$578.71 on Feb. 12. Shopify achieved our price target and we took profit on this 3.5 per cent position.

TOP PICKS

MICRON TECHNOLOGY (MU NASD)

SHOPIFY (SHOP TSX)

SEA LTD (SE NYSE)

PAST PICKS: MARCH 4, 2019

EQUINIX (EQIX NASD)

• Then: $426.98
• Now: $633.65
• Return: 48%
• Total return: 51%

TABLEAU (DATA NYSE)

• Then: $125.18
• Now: $169.53
• Return: 35%
• Total return: 35%

CISCO SYSTEMS (CSCO NASD)

• Then: $51.16
• Now: $30.09
• Return: -22%
• Total return: -19%

Total return average: 22%