Self-managed port was significantly outperforming the market in Q1 (slightly positive while the market was red)
Things changed during Q2. The self-managed port slipped into the red probably mid-April, and the curve got steeper
in June. Around -12.5% at the end of Q2 2022.
The format used in Q1
had some useful high level insights for me, so I will keep the format (with some slight tweaks)
Shipping basket was doing really well thru Q1 (unrealized gains > 50%), and roughly same levels in Apr 2022.
Opted to monetize gains (mostly in Roth ac, but some in the taxable acs too) starting in mid May 2022. Primarily,
Golden Ocean (GOGL) in the Roth, plus Flex LNG (FLNG) and GOGL in the taxable accounts. Yet, the shipping basket
powered still higher (abt 60% unrealized gains on 5/31/22). Then, in June 2022, the breakdown began. Somewhat
ironic, the decline in some dry bulk and shipping names (ZIM, GSL, GOGL, SBLK) all started after D-Day anniversary
(June 6th, 2022). I held 10 shipping names (At least 8 positive, 1 negative (dry bulk shipping ETF (BDRY))) on
06/06/22. By 6/30/22, 11 shipping names (5 positive, 6 negative)
The Q1 post I talked about dividend hikes. Going to tweak this one to look at the dividend from another angle.
Going forward, this will focus on my taxable ac which is weighted towards dividend paying names. For the first
six months of 2022, I have already exceeded the total payout for all of 2021. How did that happen? Well, mostly
via the payouts from four names - ZIM, IEP, GOGL & SBLK. Specifically, the three shipping names paid sizable
payouts the first half of 2022
Opportunities to monetize: (tweaking this one) Gains
0-15% - Okay: CRM, SPI, GLNG, GSM2, APPN, COHR
15-30% - Good: GNK, NM, ABEV5, CRM, GSM, ABBV, GOGL2,
30%+ - Great: FLNG2, GOGL*4
Realized losses: Losses happen, so this is tweaked to only mention losses when I consider them “ugly” or in extreme cases, “fugly”
ARKF (ETF)*2, APWC, MRNA, TMC. And, ARKF(ETF)*2 - fugly
ETF changes: additional BDRY nibbles, 1 ARKF nibble, 1 QQQ nibble, 1 XLF nibble - less progress after taking ARKF losses, 5.74% of
Negative surprises: Abrupt pull-back - TMC, VATE, SBLK, APWC, TKLF, NMM, ZIM, GSL, GNK, NM, GOGL, (all those shipping names )
BRK-B, QCOM, AAPL, RA, MRVL
Positive surprises: MRNA (reverse course), CPNG (reverse course), FLNG (Div and fixing vessels),
The Top 10 holdings in the port per 6/30/22
- Atlantica Sustainable Infrastructure (AY) - Utility - 6.87% Q1 6.63%
- Qualcomm (QCOM) - Technology - 5.71% Q1 4.75%
- Icahn Partners (IEP) - Financial - 5.56% Q1 5.26%
- Verizon (VZ) - Technology - 4.70% Q1 4.41%
- Golden Ocean (GOGL) - Shipping - 3.94% Q1 5.11%
- Berkshire Hathaway (BRK.B) - Financial -3.92% Q1 3.66%
- Apple, Inc (AAPL) - Technology - 3.53% Q1 3.75%
- Star Bulk Carriers - Shipping - 2.99 Q1 3.21%
- Flex LNG (FLNG) - Shipping - 2.69% Q1 3.19%
- ZIM Integrated - Shipping - 2.61% new to Top10
Tier 1: (1.09% - 2.28% positions)
RA - 2.28%, ABEV, APWC, NMM, PDT, CPNG, VATE, FLGT, PFE, BNS, GSM
Tier 2 and Tier 3: Lots of smaller bets, each less than 1%
Primary sectors: Financial 17.9%, Shipping 17.6% (incl BDRY) & Technology 16.77%
Result for Q2 2022: -12.51%
Interestingly, as the world begins to re-awake from its COVID slumber, and manufacturing picks up, both shipping and materials (as represented by RIO, BHP and VALE, for example) are becoming very volatile.
This is indicative of manufacturers and structural builders pulling back on their buying supplies in order to time an upcoming global recession. That’s my theory, at least, but it may just be stock market turbulence if traders are realigning to compensate for an expectation of an increasing value of the USD as interest rates rise in the States.
In the short-term, who knows, but in the long term, I expect people to start making and building stuff again. The biggest threat to the stock market remains geopolitical:
Will China accommodate COVID in some way (better vaccines, or policy change) and get back to consistent business again?
Has the Russia/Ukraine conflict pretty much run its course towards a stalemate and will the “stable” situation be that, such that Russia does not try to take land from any of the countries which surround it?
Will China continue to allow Taiwan to exist as an autonomous region?
Will the current political climate in the US, Europe and elsewhere continue to remain in place without significant disruptions.
Thanks for commenting.
On the dry bulk shipping side, the big elephant in the room is China. As noted in another thread, China’s steel production has dropped. That means both inputs (iron ore, coal) and outputs (steel) demand have dropped. For the segment, Q3 has traditionally been the strongest. So, that’s why I have some reserved optimism that the sector will pull through.
Another note: Suggested by a knowledgeable shipping person (CEO of Golden Ocean (GOGL)), China is responsible for a significant % of dry bulk shipping (will have to listen again, did he say 15% or 50%? )
On the container shipping side, vessel buyers still seem to be paying up for older vessels. If the big economies of the world head into a recession, is that the makings of a bubble? Buying vessels just prior to a demand slump? Again, the second half of the year is usually stronger for the container sector (those US & European economies and their “Christmas/holiday” season )
On the tech side, YTD, AAPL (-20%) & QCOM (-28%) have taken a hit. But, did they find a bottom in Q2? Have nibbled a little on both.
My opinions on what I am about to ask are not formed. The news can be pro or con which leaves me uncertain.
I am reading the US retailors seeing inventories build. This can be stated as dangerous territory.
I do not know if the sources like Cathy Wood on Yahoo financial news are worth anything. It is not just her.
Your opinion on that is valuable.
If it is true US and possibly EU demand for products from China will be ultra soft. Food for thought.
Side note where I live in the US there is no recession. In other neighborhoods in CT there definitely are hard times. Tech is ubiquitous. Big tech is laying people off. As ubiquitous tech can take hits if all boats are not rising.
You are covering shipping. It is finance that is the high risk sector in China. The major trading desks can be roiled any day now. The news is calm waters in China. Good luck with that.
There are some long-term opportunities around
Been eyeing this guy:
Don’t they have significant legal liabilities around their cpap machines?
Just last week you decided to ridicule one of my posts and accused me of being snarky.
You are entitled to your views
I’m entitled to my views.
One of my views is to not engage with people who display recent boorish behavior. Last week counts as recent.
Have a great day
I never ridiculed your post.
I do not think posting bad stock picks is cool.
You seem to misread things. Then stick by that. I am learning I do not need to ask for your opinions at that rate.
Personal attacks are not allowed on METAR. Sorry I can’t read every single post so this slipped beneath my radar.
Please notify me of any personal attack. I will have the post removed.
It was never ridicule. I would not do that.
The standards of the board were let down. This is supposed to be a generalists econ board. He was posting stock picks and said he had not thought them through. The stock picks he had earlier posted had done poorly. He was nonchalant about that.
Again I do not think it is cool to post stock picks claim little thought process went into them as an explanation that they were bad picks.
The thread the exchange happened in also refers back in the first post to the picks. At the prior time of the picks they were not labeled as per diem. That was nonchalant later on.
There was no attack, no snark nor anything else in my responses. I asked for people to be responsible and have thoughts on why they were suggesting a stock pick. I stood up for myself as asking for some sort of standard beyond it is cool to suggest stock picks that just happen not to workout.