What We Could Have Done Better in 2024

On Monday we looked back at what we got right over the past year for TheStreet Pro Portfolio and members. While it’s all good to celebrate the wins, we believe there is more to learn from reviewing where we could have done things better. As Henry Ford said, “The only real mistake is the one from which we learn nothing.” 

With that in mind, let’s review some of the things that transpired over the last year where, with the benefit of hindsight, we could have done a bit better.

Our goal is not to end 2024 on a down note, but to arm ourselves so we can avoid similar situations in the coming year. We also continue to work on communicating our thoughts and portfolio actions in a clearer, and more concise fashion.

Exiting Axon Shares

When we closed out the portfolio’s position in Axon Enterprise AXON, which was a triple-digit win for us, we exited the entire position in one fell swoop. Our concern was that the post-earnings pop and subsequent short-covering that spiked the shares would end with AXON giving back some of those quick gains. We discussed this in a post-trade "stocktopsy," and we’ve already put those learnings to work, as evidenced by our trimming back of Dutch Bros BROS following a similar post-earnings pop. That move locked in a very nice gain of more than 80% for that slice of BROS shares.

Currently, BROS shares are above our price target, but our plan is to revisit that target when Dutch Bros lays out more of its 2025 food plans. We suspect we'll see a repeat of when Starbucks SBUX made a similar move over a decade ago. Paired with an updated geographic expansion plan from BROS, it will give us a good reason to lift our price target.

Closing Out Our McDonald’s Position

While we only lost a relatively small amount on the portfolio’s position in McDonald’s MCD, just over 4%, our reason for exiting the name was tied to concerns over consumer spending, rising input costs, and the pending increase in California fast-food workers' wages. After downgrading MCD in early April, we exited the final slug of MCD shares later that month at $274.80. While the stock went on to bottom out near $240 in mid-July, they subsequently rebounded near $315 in October before pulling back near $290, where they currently reside.

One of the catalysts that led to the rebound in MCD shares was its $5 meal deal that drove a bump in comp sales in Q3 2024. The company also benefited from consumers trading down to fast food from casual dining and fast casual dining as they contended with the pinch of elevated prices. Consider a hamburger, fries, and a chocolate shake at Five Guys runs around $25, including tax, compared to $13 for the same meal at McDonald’s.

As we move into 2025, we’ll be mindful of protein costs, disposable income, and consumer spending prospects. We’ll also monitor restaurant spending trends, recognizing that folks will continue to eat out. Should the economic environment improve and inflation pressures fall, it may be a reason to revisit MCD and other restaurant shares. That said, we like our position in BROS as that company has more green field geographic expansion opportunities in the U.S. than McDonald’s.

SPDR Gold Shares

While we booked a hefty win with our position in SPDR Gold Shares ETF GLD with a gain just shy of 34%, we left money on the table with our final exit price of $220.46 in late July. We’re not ones to complain but had we held GLD shares several weeks longer, our gain of 34% would have been closer to 43%. Sometimes it pays to be patient a bit longer.

To be fair, we didn’t leave all that much money on the table. The remaining GLD shares made for a modest position size for the portfolio, and several days later we used the returned capital plus some of our cash to pick up more shares of Marvell Technology MRVL, Amazon AMZN, Microsoft MSFT, and Nvidia NVDA as well as start our position in Meta Platforms META. As you can see by the Portfolio Holdings page, we more than made up for that move higher in GLD with the 90%+ gain in that slug of MRVL shares we scooped up at $57.54.

At the time of publication, TheStreet pro Portfolio was long BROS, MRVL, AMZN, MSFT, NVDA and META.