I cross-posted the following on METAR, but it makes as much sense here:
Let me start with the fact that I am not an investment advisor, my portfolio morphs on a daily basis
and those who mindlessly copy this without doing their own due diligence are likely to find themself
wrestling a crocodile.
Every now and then I post my current portfolio for others to throw tomatoes at (or hopefully offer
useful constructive criticism). It's been a while because the structure it took while I was away (mid-
September - late December) was defensive and would not have been representative of my usual offensive
stance. I have recently started to record the latest acquisition date in a separate column (when I
remember) and you'll notice I've been on a bit of a buying spree (in some cases replacing shares I sold
and in some cases trying out some new ideas.
Yes, I know there are lots of issues and there are those who have
suggested in the past that I would do better owning one or two mutual funds, but I find choosing
individual stocks allows me to more closely tailor the portfolio to my needs (and let's me play at
beating the market averages on a daily/yearly basis, besides mutual funds are boring :-). I do
admit to owning one ETF (VB, a Vanguard small business fund) which I figured was a quick short-term way to play a hunch.
Most of the specific shares are there for more than one reason. There's a significant foreign currency
component to the portfolio with about 14% each in Australian dollars and Swiss francs. This serves a
dual purpose of being a hedge on the US dollar as well as a natural resource play in the case of the
Australian shares and a consumer consumable/infrastructure play in the case of the Swiss shares.
Both generate a reasonable level of income (in terms of foreign currency).
There's another 11% (which is likely to morph higher) which is exclusively devoted to ideas generated on
Saul's board on TMF which generally involve volatile high-growth potentially speculative issues. These
get traded fairly frequently (as an example, I have recently re-purchased NTNX and within the last
couple of weeks, sold MDB and re-bought it yesterday at a significant discount, notching a 10% gain
since then.
There's another 9-10% split between Japanese and Chinese shares, split between technology/robotics and
consumer goods companies.
Another 7% is invested in a high dividend major oil stock (Royal Dutch Shell) as another natural
resource play as well as a source of income. An equal amount has just been tossed on Berkshire Hathaway
to replace some sold last year to give a bit of inertia to the portfolio. The rest is invested in a
handful of technology and consumer companies (you can read the list below).
There are summaries below the individual stock lines of how each sector is performing as well as the
portfolio as a whole. Interestingly, the profitability of the AUD and CHF investments differs in terms
of their currencies and in terms of USD - which sort of demonstrates the importance of thinking of your
investments from a multi-currency standpoint.
So, what do my goat entrails predict? I think the trade issue with China will be settled, at least
temporarily seeming to favor the US. China has other monetary structural issues which were exacerbated
by the recent US tariff thing which will have to be accomodated, but I suspect they are still on-track
to become an accepted trade/reserve currency within five years, which will go a long way towards giving
them a license to print money (the way the US has been for decades) and solve whatever issues are still
causing them grief. The political scenario in the US may become choppy enough to cause another
significant downdraft with little or no notice if things unravel quickly. The EU has too many members
to create a consensus on many issues and the situation is getting more dangerous as multiple governments
simultaneously veer towards nationalism and the right. Brexit has few upside advantages for the UK and
a significant number of downside risks. I have to reexamine defence contractors in light of the recent
announcements which may mean extremely high defense expenditures over the next decade (likely with few
significant benefits to show for the expense, but no reason to avoid making a buck based on other's
silliness).
Anyway, last year was a profitable one for the portfolio and hopefully this will be one as well. I
don't have any travels nailed down yet, but I expect that won't last. Next time I go away, I expect
you guys/gals to be better stewards of the stock market than you were last fall :-)
Have fun picking this apart.
Jeff
Symbol Company Last Buy Date Div Yield % P/L Domicile % of Portfolio
BHP.AX BHP Group Fpo 4.29% 18.28% Australia 5.51%
NAB.AX Nat. Bank Fpo 7.96% (25.48%) Australia 0.02%
NCM.AX Newcrest Fpo 0.76% 136.34% Australia 0.18%
RIO.AX Rio Tinto Fpo 6.40% 14.48% Australia 7.96%
APT.AX Afterpay T Fpo 1/17/19 (1.75%) Australia
ABBN.VX Abb Ltd N 4.05% (12.00%) Switzerla 0.87%
ADEN.VX Adecco N 4.93% (10.82%) Switzerla 0.02%
NESN.VX Nestle N 6/7/18 2.78% 20.07% Switzerla 12.75%
BRK Berkshire Hathaway Inc. 1/15/2019 3.05% 6.59%
VB Vanguard Small Index Fd 1/02/2019 1.69% 10.40% 3.12%
AMZN Amazon.Com, Inc. 12/31/18 11.80% 3.65%
BHC Bausch Health Companies Inc1/17/19 3.22% 0.50%
CCL Carnival Corporation 1/17/19 3.79% 4.06% 1.18%
RCL Royal Caribbean Cruise Line1/17/19 2.64% 3.13% 1.18%
DHR Danaher Corporation 0.60% 61.12% 1.36%
FTV Fortive Corporation 0.38% 18.25% 0.94%
IBM International Business Mach7/30/18 5.07% (4.50%) 5.39%
GOOG Alphabet Inc. 17.25% 11.80%
MSFT Microsoft Corporation 1.74% 2.56% 5.79%
SJM J.M. Smucker Company (The) New 2.98% 389.22% 0.05%
AYX Alteryx, Inc. Class A 4/13/18 122.32% 2.37%
TWLO Twilio Inc. Class A 4/13/18 111.89% 2.04%
ZS Zscaler, Inc. 23.64% 0.97%
OKTA Okta, Inc. 12/14/18 0.77% 16.55% 1.34%
TTD The Trade Desk, Inc. 12/14/18 0.72% 1.19%
ESTC Elastic N.V. Ordinary 12/14/18 (1.66%) 0.73%
MDB Mongodb, Inc. 1/17/19 10.04% 1.38%
NTNX Nutanix, Inc. 1/17/19 5.80% 1.12%
RDS-A Royal Dutch Shell Plc Royal Dut 6.16% 11.21% England 6.89%
0.00%
SAFRY Safran 2.95% 23.37% France 1.34%
SBGSY Schneider Electric 3.58% 9.13% France 0.32%
SNY Sanofi Adr 4.48% (0.41%) France 1.78%
FANUY Fanuc Corp (0.32%) Japan 0.80%
FYRTY Familymart Uny Hld 222.67% Japan 0.37%
OMRNY Omron Corp 2.72% 49.20% Japan 1.71%
SFTBY Softbank Group Co 4.45% Japan 1.17%
SVNDY Seven & I Holdings 2.96% 19.37% Japan 0.79%
JMHLY Jardine Matheson 3.59% 23.49% Hong Kong 1.44%
BABA Alibaba Group Holding Limited A (20.82%) China 0.67%
IQ Iqiyi, Inc. 1/8/19 0.49% China 0.60%
TCEHY Tencent Hldgs Ltd 0.74% 3.97% China 1.87%
99.75%
EQUITY GROUPING % of Portfolio Profit in USD Profit in Foreign Currency
AUSTRALIAN STOCKS: 13.67% 14.01% 10.45%
SWISS STOCKS: 13.65% 14.73% 17.28%
MISC. US STOCKS: 41.53% 8.64%
US HIGH GROWTH STOCKS: 11.14% 35.83%
OIL STOCKS: 6.89% 10.14%
MISC. EUROPEAN STOCKS: 3.45% 8.63%
JAPANESE STOCKS: 4.84% 25.84%
CHINESE STOCKS: 4.58% 3.86%
SUMMARY BY CURRENCY:
In US Dollars: BLENDED PROFIT
P/L AUD 14.01%
P/L CHF 14.73%
P/L USD 11.56%
TOTAL P/L
Blended Dividend Yield 2.27% of total portfolio
12 Likes
Looks an extremely high quality portfolio with sector, strategy, currency and geography diversification. Some high quality choices at every dimension with good dividend yield and growth exposure.
I think I mentioned before, my only concern with accelerating solar and green energy traction is an over exposure to fossil fuels. GE has to be a lesson in that as well as relying on old industrial sectors that are well past their best. You have some oil, coal and mining exposure and some old heavy industry players - some could thrive with robotic manufacturing and digital IoT revelations but some could collapse.
Australian banking is in the dumps that might be dead money for now.
Ant
3 Likes
Thanks Ant.
Actually, the starater position in Afterpay was based on the post you made a few days ago (its size of .12% of the portfolio was left of the spreadsheet in error). The National Bank position (.02% of the portfolio was an oversight on my part. For a while (a number of years ago) the portfolio held a number of Ozian banks and I sold the lot of them, not realizing that my limit offer on this guy wasn’t fully filled. By the time I discovered the remainder, it wasn’t worth selling. There’s also a legacy position in Smucker-SJM (since its my stock with the highest percentage gain at 389%, it’s a shame it’s only .05% of the portfolio) which was a dividend in a DRIP which came in after the main position was sold.
Right now, I’m trying to build a portfolio of moderately valued companies which have competitive moats infields associated with “physical” automation. Chasing the Nvidia’s of the world is a roll of the dice because, by the time I find out about how hot a stock is, there’s a reasonable probability it’s too expensive (of course Saul has convinced me that the word “too” is more subjective than objective, which has been a revelation to me - who says you can’t teach an old dog …:-). On the other hand, to physically build robots will require products such as those made by the DHR/FTV pair (a split of DHR), Fanuc and Omron. Similarly, while there will be local processing, a large part of the future AI “brain” will be housed in the cloud - which is sort of the theory behind the choices in that environment. Incidentally, the IBM position is the result of a recent “double-down” which I couldn’t resist when I looked at their metrics. The total position is still a bit underwater and no one loves them anymore, but I figure they are not the “walking dead” that the market is using to price them.
At one point, a few years ago, I decided that the world needed two things badly - bottled water and an upgrade of electrical infrastructure, and being “theme biased” (similar to what I described above), I acquired stakes in most of the world’s major beverage companies as well as electrical material manufacturers. While I still like the concept, no one else seemed to and the positions languished until sold off. The two main Swiss issues are remnants of that period of acquisition as trading on the Zurich exchange is a pain and they do accomplish a number of side functions - as well as generating income, which a CHF position wouldn’t nowadays (actually many banks charge to hold them on your behalf).
Anyhow, while one can’t own every shiny object simultaneously and I’m a firm believer of not having all one’s eggs in the same basket, from the standpoint of a frequent trader, this is my current snapshot in time equity portfolio.
Jeff
2 Likes
There’s a significant foreign currency component to the portfolio with about 14% each in Australian dollars and Swiss francs.
I think you may need to reconsider whether you have as much foreign currency exposure as you think.
Resource shares (e.g. BHP, NCM and RIO) tend to track the $US to first approximation, regardless of where they’re listed. Furthermore, internationally exposed resource shares (e.g. BHP, NCM and RIO) tend to track the world economy to first approximation, rather than the economy where they are domiciled (NCM actually tends to track the gold price). Plus, you need to consider where these companies own assets: BHP has assets all over the world, with its primary listing in Australia, and secondary listing in the UK; NCM has almost all its assets in Australia, and is listed in Australia; and RIO has assets all over the world, with its primary listing in the UK, and a secondary listing in Australia. I would suggest that you’re much less exposed to the Australian economy and $A than you think.
Similar comments, to some extent, can be made about your Swiss holdings.
None of this is necessarily bad, as these foreign stocks do diversify you away from the US economy, but just not into the Australian or Swiss economy in a large way.
Bombora
2 Likes
Bombora makes valid points. That said, the investments were not made to track either the Swiss or the Aussie economy per se, but rather to serve as income earning proxies for the currencies themselves as a hedge against the unlikely event of a traumatic hit to the USD. As was pointed out, the specific stocks don’t necessarily track the economies of the countries they are domiciled in, but were chosen because they filled equity niches that I thought made sense. If I had chosen Vale, for example, it would have been awkward to buy with AUD and if I had chosen Kraft or Emerson, it would have been difficult to use CHF.
While I recognize that the the stocks discussed here make up only about 10% portfolio I posted, in context, that’s the portion which provides a good deal of its growth, but there are other parts which provide income, capital inertia and so on. For better or worse, while the overall size/breadth of the portfolio doesn’t allow it to achieve the percentage gains of Saul’s, it tends to be less volatile and I’ve been pretty consistently beating the S&P.
My new year’s resolution is to raise the percentage of the portfolio which is devoted to stocks conforming to the pattern discussed on Saul’s board. That said, I also recognize that in a market meltdown, they will tend to be more volatile than other classes of equities.
Jeff