TCEHY president sold 1M shares reduing his stake from .49% to .48%. Also Naspers unloaded their shares. Please comment: should we take our porfits?
Thank you.

Maria: No, you shouldn’t take TCEHY profits just because of these events alone.

If corporate insiders are suddenly dumping a stock, they know something that the rest of us don’t. It’s often a tip-off that the people running the company realize that the stock is about to underperform the market. But there’s a caveat: sometimes insiders sell for personal financial reasons that aren’t related to the health of the company.

If only one corporate insider is selling, or if the stock has run-up quite a bit, it may simply indicate an individual’s desire to pocket profits. TCEHY chief’s reduction of his stake from .49% to .48% seems to me to be a nonevent.

The stock market in recent weeks has resembled a roller coaster, rising and falling by more than 1% on an intraday basis. Tech stocks have been among the most volatile. Smaller tech stocks, in particular, are getting crushed.

The Facebook (NSDQ: FB) data privacy scandal has sparked fears of greater regulation. The benchmark Technology Select Sector SPDR Fund (XLK) has been slumping. Most of the so-called FAANG stocks have taken a beating. But it’s not just U.S. tech stocks. BTP portfolio holding Tencent Holdings (OTC: TCEHY), considered the “Facebook of China,” has gotten punished, too. The sector’s headwinds are too great to resist.

And yet, underlying economic growth is on track. The tax bill signed by President Trump in December should help the beleaguered tech sector. It will allow tech giants to repatriate their massive overseas cash hoards back to the U.S. for taxation at a lower domestic rate. This infusion of cash should provide a powerful tailwind.

But first, the tech realm needs to get past this rough patch. I’m confident it will. Hang tight and wait for my next portfolio update this Friday. Thanks for your question.