Grab Journey: Q1 2023
I am writing this article prior to $Grab Holdings(GRAB)$
I remember then in early Jan 23, thinking that Grab would constantly remain over $3.50. Over the course of the quarter, I always thought that Grab was starting to get recognized, even though it had yet to achieve overall profitability and was still suffering a loss of around $300 million. Alas I was wrong, as the price nose dived to around $2.60-70 last month. Normally, I would buy more but I didn't have the heart to, especially with the worry that it would go down further to $2.13 like last year.
Thinking back, I have learnt not to stray to far from a stock's intrinsic value. In the first quarter, thinking that it would hit $4, I bought the shares from prices of $3.90, $3.85, $3.50, $3.45, all the way to $3.29. I stopped after the price continued to dive. I suffered a 4 figure loss and did not spend more after that. I realised that I had forgotten to be patient, having thought that as the company had moved its break-even target by a year, investors would jump on it. I remember vividly when it's finance officer sold his shares at $3.17 for "tax purposes". Prices tanked (who wouldn't sell if the Chief Financial Officer sells?). Frustration grew as I lost sight of why I thought Grab had a chance (read my previous article for that).
This week however, Grab has been on the rise, hitting a high of $3.40, the highest in this 2-3 months. While I'm glad I held on and I believe the price will rise further, I sold off some of my shares to reduce risk. This is to allow me some leeway to buy more shares to DCA to it's intrinsic value. The shares are currently at $3.31. I am ready for it to go either way. More importantly, I am learning to be a bit more patient, to wait for the right price.
I believe Grab will hit its target this year. However, I am now mindful that I need to buy it at the right price to fully take advantage of it's growth potential. I'll update you again at the end of this trip.
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For my first one, it closed when the price dipped below $3. Including the amount gained from selling the contract, my net price for getting the units was about $2.31, which was still below the price at the time.
My second contract is still open, but if it closes above the contract price i.e. out of the money, i would still have gained the amount from having shorted the contract.
I think this strategy works for me because I believe in Grab’s potential to grow and being undervalued by the market. Rather than adding to my position in real time, by shorting, I’m trying to unlock value from the stock’s price ~6 months down the road.
Great ariticle, would you like to share it?