These Stocks Are Killing My Portfolio — Time to Bail?

These stocks are killing my portfolio right now. What do I do? Here with some great advice looking at my entire Bridget Spies portfolio is market beat analyst Thomas Hughes. Thomas, I'm so excited for this conversation today because we talk a lot about stocks to buy on this channel and today we might be talking about some to get rid of or at least what to do when you have some stocks that are losing and dragging down your portfolio. If you're new to the channel, I track the stocks that we talk about on this channel every day by adding a new stock to my Bridget Spies watch list. It's a paper trading watch list and I usually pick one stock per video. We talk about to add to this watch list. I started it back in November and some of the names that we've talked about on here are really struggling right now and I think uh a lot of investors are feeling this way right now. Thomas, uh let's just talk about the overall market and kind of how rough March has been for a lot of sectors. >> March has been a struggle. Um, and it's really it's the hot and cold running Trump. We talked about that before just in the last 12 18 hours. I think that we've had three different ships where he was like, "Iran war ends soon. Iran war not end soon. Iran war ends soon. Iran war not end soon." And so it's just like it gives you a headache. It's the kind of thing um and shaking a lot of weak hands out of the market which is ultimately good. That helps get some valuations down. I think will ultimately lead to a great buying opportunity for the market. But until there's some stability, there's a lot there's a lot of risk in the market right now. >> Yeah. and that is absolutely showing up in my portfolio right now. If you want to scan the QR code and follow along with what we're looking at, you can scan that QR code or go to marketbeat.com/bid to track and follow along with some of the stocks we're going to be talking about on this portfolio today. There's about 40 names on this list that I have been adding to the Bridget Spy watch list on MarketBeat uh since late November. And there are so many in the red right now, some of them extremely in the red. And I I want to talk about what they all have in common first. Uh we talk about a lot of different names on the show, but I feel like a lot of times our viewers are very interested in more of the speculative, high-risk, highreward type of names, and you see a lot of those on this list. And I think that might be telling as to why we're seeing so much red right now. >> That's just a good word to bring up, speculation, speculative stocks. Um looking at your top five winners, your top five losers, eight of the 10 of them are speculations. You certainly have picked some some good blue chip stocks as well. Many different sectors, but a lot of a lot of them are speculations and speculations are just higher risk stocks that come with volatility for, you know, day traders. They're going to be in and out of these stocks, you know, within hours maybe or just a few days or weeks at the most. But for investors, you know, you're looking at these swings and it's like, you know, what do I do? When do I buy them? And you got to think, how is the story developing? You know, because a stock that's swinging 10, 15, 20, 30, 50% way down here, it's hard to watch. But at the outlook for the price to go way way way up here, then that volatility is not really that big of a deal. It's just a matter of kind of like understanding what it is you're buying and what your outlook is and what your what your goals are. >> Uh in this video, we are going to evaluate those bottom five performers and see whether they're a drop or a hold or even adding to the position that I might already have in those. So, we're going to get to that in just a minute, but I want to talk a little bit more about this overall broader look at what to do with your own portfolios right now. If you're seeing a lot of red like I might be seeing in some of these Britain's buys watch list stocks, there's also some green. You look at the top few performers on the watch list right now, there are also speculative names. So, I just want to talk about when we have volatility like we're seeing in the market right now that you just talked about the back and forth even within an 18 hour time frame. Lots of back and forth. Why do these small cap riskier names tend to see more swings in either direction than some of those solid blue chip stocks? a lot of their value is based on future expectations, you know, and so when it's good and the market expects things to be really good, then that valuation gets inflated and then when there's fear and and and and risk in the market, then that premium gets reduced and that's what causes the valuation changes. As far as your own portfolio, it's not really like indicative of like standard portfolios because you got a lot of different things in there. It's not really focused on tech or small caps or big caps or blue chips or speculation. So, it's a lot of mix. But what I do want to point out is that, you know, diversification is really your friend. You got a lot of names in there. You've got some some really big losers. You've also got some big winners. And ultimately, you're only down 6%, which really isn't that bad considering that it's a pretty fresh portfolio, and the market conditions are pretty pretty wanky. So, I mean, down 6% is not that bad. You know, we get a rebound, you'll be in the green real quick, and if we, you know, trim out some of the losers, you know, pick up some more winners and you'll start really showing some gains. I think that's a great observation, Thomas, that even though it looks like a whole lot of red on this watch list right now, it's actually only down 6%. Even in a time when the S&P 500 itself is down significantly over the last few months, this portfolio is actually only about 3 to four months old. Again, it started in November. So, it's it's only a few months old. It's a very young portfolio with mostly speculative names because we talk about those so often on this channel. Another thing to for viewers to consider when you're looking at this portfolio in particular, this is just a paper trading watch list. I am specifically focused on the stocks we talk about on this channel. If we have a video that has a lot of different speculative names in it, that means I'm adding a speculative stock to my watch list. There's no intentional diversification here. There's no uh intentional strategy either, and I'm not doing a lot of the things that investors should be doing on a real uh investment portfolio that you might be putting together. So, Thomas, before we get into the five specific losers to talk about on this video, talk about as a real investor, a retail investor, if you're going to be investing in some of these more speculative stocks, are stop-losses important? What are some other things you might want to be doing as a investor making your own investments? Well, stop losses are very important because it limits your risk. You'll see that you have uh quite a few stocks that have extended into double digit losses. A reasonable stop-loss would be maybe, you know, 30% of a position. But for a speculative portfolio like what this is, you want to keep really low lowrisk profile anyway. So each of your position sizes would probably only be about 1% of the portfolio. That would give you the opportunity to have, you know, 50 or 60 trades going at once and still have some cash left over. With your stop losses, you limit your risk. Now, thinking about your own portfolio, if if we had set stop losses on your trade so that they cut out at 20 or 30%, some of your biggest winners wouldn't have lost quite so much, and maybe you would actually be in the green right now. Ultimately, I think it's been a long time since I've done this math, but when I first got into trading and trying to figure out how right do I need to be all the time to be able to make money, uh, the math works out that if you use a reasonable stop-loss and you use a reasonable take-profit point, you've only got to be right about 45% of the time to be profitable. It's ridiculous, right? But it takes a lot of discipline to be able to do that. >> This is such valuable information for investors who are doing this for real and not just adding stocks to a a paper trading watch list to follow along on marketbeat.com that this is uh this is real world advice. So super useful information for investors, Thomas. And that diversification point is so important. If you are looking to add some more diversified stocks and real high yield stocks to your own portfolio to have that diversification that Thomas is talking about, make sure to check out this free article on marketbeat.com. It's on five high yield stocks to help shield your portfolio from the volatility storm that we are in right now. You can scan the QR code or click the link in the description to get that article for free with those five high yield names in your portfolio today. You can go find that list on MarketBe right now with this link. All right, Thomas, let's get on to the five losers on this list and whether they are a drop and cut your losses or if it's time to continue holding or maybe even adding to a position in some of these names. Let's start with that first one. This is the fifth from the bottom. Uh let's the stock. >> All right, that's Credo Technologies. Uh this is one I think that you would probably want to add to. Crito Technologies is involved with data center connectivity, uh photonics. It's pretty well positioned in in the AI industry. A lot of fears about photonix in general and DC spending has got that stock price down pretty hard, but the outlook is still pretty robust and all of the market dynamics that tell me that the stocks being accumulated are positive. Uh, so to me, this is a buy. Could be some more time before it rebounds, but I think that it will rebound and we'll see uptrends and new all-time highs. >> Yeah, I remember adding this one to the list. This was on a video you and I did together and you talked about Credo as being at a really big down point when I added it to the list and now it's just continued to go down since then. Let's talk about the reason for the drop. Why is this stock dropping right now? >> Well, so you know, like I say, you can't try to catch a falling knife. You know, we think maybe this is the bottom, but it totally really wasn't. And it's just those fears, you know, it's like it's fierce. On the one hand, we have all of this uh the news is just data center spending and AI spending is is ballooning and blossoming. But on the other hand, it's like, well, are they really going to do it? And it's like, yes, they're doing it, but are they really going to do it? And it's the fears are overwhelming the reality, and that's got the stock price down pretty hard. So now we're just waiting for, you know, reality to catch up with the stock price, which is that future results are going to probably be good and be catalyst for higher price action. Now, within this, we're looking at the drivers of the stock market and the headwinds, which would be the analysts, the institutions, and the short sellers. Short sellers aren't selling into this into this decline. I mean short interest is very low. So they're not thinking that this stock is getting ready to to to collapse. Institutions are are accumulating the stock and institutions rated as a or analyst rate as a buy and they see over 100% upside at the consensus target which has been rising. So those are all really positive forces for the market. So again just a catalyst to reinvigorate you know some bullish sentiment. >> All right. So you are still bullish on Credo. Uh it's been a really bad performer on the portfolio so far but the turnaround could be coming for this one. So, if like me, you added credo to your portfolio earlier in the year and it's continued to go down, let's talk about dollar cost averaging with this one. >> Well, right. So, dollar cost averaging is totally something that you can do. You you buy a speculation, it goes against you and you buy some more, you lower your your cost point. That's totally fine if you're bullish on the stock, if it still seems like it's a good buy, but it's easy to like just keep buying into a market that keeps falling. But that brings up another point. You know, we're talking about stop losses and money management. Uh, a lot of speculators too, you know, you have that low entry point and you have your stop losses, but they might also buy their position in three or four chunks. It's like, I think it's okay now. Bam, you buy it once and then maybe it falls and then you buy some more and then maybe it moves higher and sets a new high, then you buy some more. And within all that, your average price is probably right where you started at anyway, which just means that you've done a smart job of like kind of like managing your entry point. And then again, you know, you had this small volatile range down here where you made your three purchases. That's the speculation entry and then way up here is the speculation exit. >> All right. Well, this is a good first name to look at. Let's get on to that fourth name from the bottom. And this entire sector seems to be bottoming out right now. >> ION Q right in quantum computing. Um to me, this one is a is a maybe. This company seems to have begun generating some revenue. Um that seems to be stable uh tied to its technology. Not super duper advanced yet, but still making some revenue. And uh it's supposed to be growing at a fairly aggressive pace over the next couple years. analysts and institutions are accumulating and they're pointing to upside, but the short sellers are still pretty prevalent in this market. We're up about 22%. That's a pretty significant headwind. Bad news and they're going to pile right back in and drive the stock price down. But good news, they're going to start covering and drive it back up. So, right now it's looking kind of bullish, but there's certainly going to be some volatility moving ahead and it's all going to be news related. But this company being a, you know, speculation and an early revenue company, um, it's going to be heavily tied to execution. Any execution delays or, you know, headwinds, hurdles that kind of delays that outlook is going to have a real big impact on the stock price. >> And talking about INQ specifically, but I think this applies to a lot of the quantum computing stocks in the sector as a whole. I want to talk about speculative investments like this and the time horizon that this is an idea that is not fully here yet. It's still in the development phase. There's nothing really commercial so far. So when you're looking at an investment like this that has a longer time horizon, what should investors expect? I feel like the volatility that we've seen is maybe to be expected in this kind of investment. >> The longer the time horizon, uh, the more volatility and the higher the likelihood that between whatever's happening now that makes the stock price be kind of elevated will quit being a premium before whatever is supposed to happen happens. So like right now, you have the market all invigorated about something because this outlook is really bright. premium in the stock price, but it won't happen for three or five or ten years. So between then and now are execution risks and hurdles and just the company having to do what it's supposed to do, which usually means raising money and diluting shares and spending money and having debt investing, you know, so that means like you're all excited about it now, but then all those headwinds get in the way and then the stock price just really slumps. So it's really important to understand what you're buying and what the timeline is because it's hard to it's hard to know. Yeah, that's an important conversation with quantum computing in general because the time horizon is very long. And I think there's one other thing to talk about here and that's the potential that it doesn't work altogether. That is a possibility with some of these names that have that long time horizon. Right. >> It is indeed. So with uh quantum computing especially, it's being developed. It's totally advancing, but it's not really a well-developed technology yet. >> I think we're going to hear this theme again with a couple more names that we have to get to on this list. Let's get to the third one from the bottom on this watch list. And this is a name that's actually been on the channel two times this week. It's a name that a lot of people keep talking about because it's so low right now. >> Oh yeah, Oakllo. I think Oakwell is another good one that you could probably buy into right now. It's well off of its high, but this is just what I was talking about before. All this good news, this developing pipeline set the stock price way up last year and now was way way way back down, but it appears to be deeply oversold. Um, we've got 19 analysts, which is a pretty fair amount, rating at a moderate buy. Um, they're pointing at triple digit upside. Institutions own 85% and are buying the stock. Short interest is still a bit high, but 15% isn't as high as it possibly could be. I mean, they're in the market. They're going to cause some volatility, but they're starting to get out uh looking for another catalyst. Uh, but as far as like the revenue and the profitability timeline, this company's outlook is is really growing. There's a lot of demand for energy. We know that we need these these these reactors to be put into place. We're expecting some catalyst this year like affirming the technology and accelerating the timeline for its deployments. This company is expected to start generating revenue towards the end of next year, early 2028, and to become almost immediately profitable. So, speculation and risk, but compared to some others, uh the risk are are a lot lower. >> It's that time horizon discussion again where that profitability is still a couple of years out, which is why we're seeing so much volatility right now. And we're also seeing different perspectives. I like to hear your perspective, Thomas. We had Jeffrey on yesterday talking about nuclear stocks. He was also bullish on the the future outlook for Oaklo and SMR kind of both falling in that same category. And we had another group of analysts on a week ago who said stay away from Oaklo. This one is not growing as fast and doesn't have as good of fundamentals as some of the other small nuclear reactor stocks out there. They said SMR and another name uh would be better buys than Oaklo in this in this race. So, lots of different opinions too on kind of where these companies are on that timeline to profitability, >> right? I mean, for sure I take that point. You know, I think that SMR might not have as good of a pipeline. They both got kind of a sketchy outlook because it's it's it's certainly it's it's early in development. Neither one of them are really licensed to deploy technology, but again, we know that nuclear works. We know that these reactors have been designed well. Uh we know that uh we're in testing phases and we know that there's high demand. We know that as soon as they get the go ahead to start deploying, you're going to see deployments happen on a quartertoquarter basis. Um, and it's going to be really explosive. >> All right. So, we are three names into the bottom of this list and so far no official drops. There's one maybe on the list, but so far the other names are ones that you say uh if you adding to your position might not be a bad idea even though the performance has been really low. What what are your thoughts on that? It just it just comes and go, you know. It's part of the part of having a watch list, you know, is to say, "These are the stocks that I'm interested in, you know, and then after a couple of weeks or months or quarters, you say, "Yeah, these ones are following through and these ones aren't." And then get rid of them and then just kind of whittle down your portfolio. That's part of your due diligence. That's part of your risk management. You know, you don't just go and speculate on whatever stock it is that pops up. Speculation isn't just a guess. It's an educated guess. It's a guess from experience. So, you have to get some knowledge to have the experience to be able to make an honest speculation. >> Well, that is why our viewers are with us is trying to get some knowledge and different perspectives. I love it. Let's get on to that second from the bottom stock. This one has been pretty painful. >> Well, right. That's Dragonfly, right? And the the drone industry is awesome. It should be doing really well. It's got the support of analysts. They rated a strong buy. Institutions are only kind of buying, but they are accumulating. They don't own a whole lot of the stock. Um, and the short interest is also very high. I think the problem for this one is just um a slow revenue ramp and that's got to do with competition. Drones are a hot market, but uh this one has got a lot of competition and there are some other companies that are doing a lot better, have a better position and a better outlook and that's just weighing on the stock price. It's not necessarily that Dragonfly is in bad shape. There's just other ones that are are in better shape. >> Yeah, you can see that even on this watch list. Redcat is my number one performing stock up almost 100%. Uh and that's a drone company, right? >> Right. It Yeah, it just depends. And now it's like they've got the technology, but do they have the orders? Do they have the revenue? Is the news streamline, the news pipeline like affirming this outlook or is the company just kind of struggling and you know, nobody's buying it right now? It seems like with Dragonfly, it's not got the momentum of some other companies. And so the people that would be investing in this stock aren't. They're investing in the other companies and you can see that in the chart. I think for me out of all these things, the chart action is really the biggest indicator that I just don't want to be in it right now because it looks like it's being sold off. I think >> it's a hard one to look at for investors who bought into Dragonfly early last year when it was low and they saw this huge runup. There were some real gains for Dragonfly and a lot of momentum for this company and to see it pull back to to where it was and kind of lose all of those gains it has is probably a hard thing for a lot of investors to be seeing right now. It's also hard to ignore what the analysts are saying about this stock. I mean there is a lot of future growth expectations for this company still we haven't seen those expectations change that much. So is there hope for a turnaround still if you uh believe in the thesis of the drone sector taking off and this company being a part of that story? >> I mean there is still some hope but I don't think it's really strong hope. I mean analysts they're optimistic but only you know I think only four of them are covering the stock right now. So that's not a lot of attention. Um, but thinking about this, you know, in your portfolio construction, you have your watch list. You pick some names. Maybe you find a sector and within that there's like three or four names that all look good. You know, with drones, it's a big speculative section with lots of potential winners in it, right? So maybe you pick three or four of those and after you whittle down your name, you have your 1% of your whatever your portfolio and then you split that into two or three and you buy some of this, some of this, some of this, right? And then you see, well, this one's not winning and then you sell it and put the money back into the other one. It's just, you know, another way to look at your diversification and trying to home down on your on your winners. You know, that's something that you might not want to do until you've really decided, you know, drones are it and these stocks are really good because you don't want to just like grab whatever stocks again. But still, you know, it's part of your your diligence process and and and getting your portfolio like really dialed in. That is something that can be done. >> Now, one other question here, Thomas, before we move on to the last stock on the list, and that is when to take profits in a company. Again, if you invested in Dragonfly early, you absolutely saw some major gains at one point this year. What What's your play when it comes to seeing a huge run up in in a stock like Dragonfly like it saw earlier of uh taking profits and even comparing the Redcat comparison right now where I'm up about 100% on that stock? What would be your play on trying to take profits during a big runup for a speculative stock like both of these names? >> A good rule of thumb is to is to have a a profit target. you know, um I used to have mine at 50%. But now it's at at 100%. It's just because it when you pick a good speculation that you will usually make that kind of gains pretty easily and it's it's not necessarily hard to find stocks that do that. I'll be very honest, the hardest thing to do in your entire investing career is going to be taking your profits. I mean, it's easy to cut losses. It's really hard to take profits because like, wow, it's 100%. It could be 200%. You know, it's like it gets bigger, but those profits go away real fast if you don't take them. So, it's really good to have that that that profit stop so that when the market gets to a certain point, you just take some money off the table. And so, what I do with speculations like this is at 100% you take half. That means you get your money back that you started with and you still have that same position in the market and it's all just pure profit. If it goes to zero, you know, sad, boohoo, but you didn't lose your original money. You can go back and trade again. What's likely will happen is, you know, maybe it holds steady, maybe it comes down, but if it's a good trade, it'll keep going up and going up and going up, and you'll keep continue to profit from that smaller position. >> Again, a lot of useful Easter eggs hidden in here for this Easter weekend. Lots of good pieces of information for investors to take for themselves. Let's go to that final stock, the very bottom of the barrel here that is highly underperforming on this portfolio, >> right? That's Vertical Aerospace. You know, again, another company that has good technology, they have a good strategy. I think if we talk to Jeffrey Neil Johnson, I think he likes this stock better than Joby and Archer because of its model. They're he's trying they're trying to be, you know, direct to market, not so much creating a air taxi market industry. But of the EVOL stocks, that's got the longest timeline to to fruition. It's got the worst capitalization. It's got the most risk of dilution, and you see that in the stock price. As far as our our our sellside forces that we want to watch out for, there's not support. No one seems to be buying it and people are definitely selling it and the short interest is high. Uh this is this is not a stock that I want to be in right now. >> Is this a cut your losses one? >> I think this is a cut your losses one for sure. >> And let's talk really quick about the whole EVA Tool sector. It's not just this name. Joby and Archer also going down right now. This is a sector that saw a ton of excitement all of last year. Uh but there have always been naysayers who say this is never actually going to take off. this is never going to be commercial. This is never going to actually become a profitable industry. Is that still a possible outcome for the Evol sector or do you see there's still some hope and possibility for growth and commercialization here? >> I think it's possible that it doesn't bear fruit, but I I think that that it will. I think it's just a matter of time. All the major um Evatoll stocks have the same problem right now as they're all diluting or raising money. It all happened in the first quarter into last year. All weighing on their stock prices. Of them all, I think that Joby is the furthest along as far as commercialization. Um, it's the farthest along with FAA certification. It's the furthest along with it international business. Um, it's going to be launching some planes maybe later this year, early next year, I think. Um, so it's just a it's just a matter of time. Um, and I think that Joby is is the one out of those three that that investors would want to be focusing on. >> So much good information today, Thomas. Thank you for looking at the the low performers and what to do with them. If you want to look at some more information on which stocks to buy and which to avoid in the failing software sector right now, make sure to check out this video. It has a lot of views because it's some solid advice and a unique perspective on how to look at these software stocks from an accounting perspective. You can find that video