Once in a while, I've posted my current equity portfolio on METAR for comments and heckling. Obviously I am not one to come to for investment advice, but rather seek the feedback of others. Less than half of the portfolio are companies based in the US. Many of the foreign companies were picked up when I was inspired during my travels to their native countries by observing them in their native environment. Since Yahoo melted down, I've had to hand-work more of my analytics, but such is life and while the designations are far from perfect, I've at least attempted to separate the positions by sector as well as geography. While it's not obvious from the breakdown, one of the major threads tying many of the choices is that they are involved in various functions of artificial intelligence and robotics. There is also a perception that emerging markets (and even Europe) will grow at a faster rate than the US. Just for fun, while I've sorted the portfolio by position size (both A and B shares of Berkshire Hathaway have been combined for simplicity). Yes, I know there are a lot of different shares represented, but it is rare for me to hold mutual funds or ETF's and this lets me play around and have fun, rather than just hold a slug of SPY and a bunch of foreign ETF's. There are an awful lot of very good companies which are not represented (some of which have been recently sold), in general, because I feel they have become overvalued. As an explanation, there is a fair amount of trading done from time to time, so most of these shares have not been represented in the portfolio for more than a couple of years. I am frankly becoming more than a little nervous about the valuation of the US market and this probably explains why my tools keep telling me to sell US stocks and replace them with foreign ones. Oh, one more note, if you're having problems finding some of the symbols, the ones ending with ".AX" have been procured on the Austrailian market in Aussie bucks and the ones ending in ".VX" have been bought on the Swiss bourse in Swiss Francs. This adds currency risk on top of market risks, but that's another game I regularly play. If you think the positions should be parsed in some other fashion, please let me know. Jeff Position Position Ticker Company % of Port % Gain/Loss Country BRK-A,B Berkshire Hathaway Inc. A and 13.12% 7.47% Financial GOOG Alphabet Inc. 10.62% 10.60% Technology RDS-A Royal Dutch Shell Plc Royal D 6.50% 13.64% England Material NESN.VX Nestle N 6.04% 25.73% Switzerland Consumer RIO.AX Rio Tinto Fpo 5.92% 12.53% Australia Material BHP.AX Bhp Blt Fpo 5.31% 1.24% Australia Material IBM International Business Machin 4.67% 5.71% Technology NOVN.VX Novartis N 3.93% 8.78% Switzerland Pharma BABA Alibaba Group Holding Limited 3.89% 8.17% China Technology VWO Vanguard Ftse Emerging Market 3.75% 7.02% Emerging Mkt Emerging Mkt ETF AAPL Apple Inc. 3.59% 13.78% Technology MSFT Microsoft Corporation 3.41% 128.70% Technology SAN Banco Santander, S.A. Sponsor 2.67% 19.29% Spain Financial OMRNY Omron Corp 2.61% 139.20% Japan Technology ROG.VX Roche Gs 2.53% -1.93% Switzerland Pharma TCEHY Tencent Hldgs Ltd 2.25% 31.25% China Technology CSCO Cisco Systems, Inc. 2.24% 15.81% Technology SNY Sanofi American Depositary Sh 1.86% 8.93% France Pharma FB Facebook, Inc. 1.85% 64.67% Technology JMHLY Jardine Matheson 1.33% 19.37% Hong Kong Financial IEMG Ishares Core Msci Emerging Ma 1.18% 6.51% Emerging Mkt Emerging Mkt ETF FANUY Fanuc Corp 1.12% 46.09% Japan Technology BAC Bank Of America Corporation 1.09% 3.35% Financial DHR Danaher Corporation 1.09% 36.07% Technology ABBN.VX Abb Ltd N 1.07% 13.85% Switzerland Industrial SAFRY Safran 1.05% 1.51% France Industrial DANOY Danone 1.01% 2.36% France Consumer ECH Ishares Msci Chile Capped Inv 0.97% -5.29% Emerging Mkt Emerging Mkt ETF SFTBY Softbank Group Co 0.89% 45.06% Japan Technology SVNDY Seven & I Holdings 0.70% 11.33% Japan Consumer FTV Fortive Corporation 0.41% 67.98% Technology SBGSY Schneider Electric 0.38% 33.51% France Industrial RCL Royal Caribbean Cruises Ltd. 0.28% 311.39% Consumer NCM.AX Newcrest Fpo 0.24% 136.64% Australia Material FYRTY Familymart Uny Hld 0.17% 59.61% Japan Consumer CCL Carnival Corporation 0.14% 22.21% Consumer SJM J.M. Smucker Company (The) Ne 0.06% 426.14% Consumer NAB.AX Nat. Bank Fpo 0.04% -10.99% Australia Financial ADEN.VX Adecco N 0.03% 29.64% Switzerland Industrial SECTOR NATIONALITY Technology 38.63% United States 42.56% Financial 18.24% Switzerland 13.60% Material 17.97% Australia 11.50% Consumer 8.41% England 6.50% Pharma 8.32% China 6.14% Emerging Mkt ETF 5.90% Emerging Mkt ETF 5.90% Industrial 2.53% Japan 5.49% France 4.30% Spain 2.67% Hong Kong 1.33%
Nice one Jeff - that’s a good looking portfolio.
A few rather immediate and random comments…
- If you are really driven by AI and robotic automation you could consider a couple of ETFs e.g. ROBO.
- Hong Kong market is still under valued but in a strong uptrend - I hold my Tencent plus a bunch of other China stocks over there. You might want to consider that.
- The only holding I would feel strongly against is IBM. It’s a great brand and a great corporation but I don’t see the growth prospects
- Pharma - I notice your Pharma sector is quite old school. Admittedly they are the current winners - Roche, Novartis, Sanofi etc but with the exception of Roche’s Genentech there isn’t much biotech in there or new growth plays
- Smucker - the jam company? 400%+ wow
- I’m not one to talk as I have a lot of holdings between 0.5-1% of my port but you seem to have a tail of miniscule positions that are never going to move the needle
- You have Shell, BHP and Rio - that’s a lot of exposure to either an oil price rebound or a cyclical industry or a potentially facing disruption depending on your point of view
- Your financial holdings are interesting. Potentially beneficiaries of a rising interest rate environment but I think I read that regional financial plays were a better opportunity than the national/international players
- Do you really want RCL and CCL? I would go for one or the other. If you wanted a second I would go for a smaller rising star to go alongside a big boy.
- Schneider Electric is French? I would have put good money on them being German.
BTW good for you on sector AND geographic diversification!
Thanks for your comments Ant
I figure (as much as anything else to make sure I think about each comment) it’s worth addressing each of your comments:
Great idea to pick up ROBO (after I get the chance to peek under the hood), or alternatively to cherry pick from its positions
Again, a good idea to buy direct on HK exchange after tracking relative costs/values of raw vs ADR
IBM is mainly a play on Watson (AI thing again). One day, before the cows come home, maybe
Good point. These are the left-overs from a previously more diversified grouping, but Bio is worth adding (probably as an ETF because it’s such a crap shoot to pick the winners)
That’s there as an object lesson that I have to stare at each day. It is the residual of a dividend payment (DRIP) which came in after a position was sold (which accounts for its relatively small size). I’ve kept it to teach me that I wasn’t as smart as I thought when I sold the position.
See #5 (above) and #9 (below) as rational for some small positions. Also, some of the foreign small positions, were tentative purchases but, in aggregate, create a single “position” (call it a mini-ETF). Also, since there is no scale to the portfolio, I might as well state that, all but the smallest positions, are still worth a buck or two.
I’ve held BHP/RIO for quite a while. Sooner or later, people have to start making “stuff” again out of “things” that come out of the ground. I avoided VALE because of perceived political issues, but may pick up the Brazilian ETF as I think things may have calmed down. I’m heading down there in February and will decide. The Shell is a very recent acquisition (couple of months IIRC). I noticed that its books were not as bad as people thought, it was paying a hell of a yield (in dividends), and I guess I got lucky for a change.
Good idea to look into regionals (any ideas are appreciated :-). I did well on Australian banks for az while. The Santander position is a residual of a larger one. I figured that it was being treated like a Spanish bank (it is), even though only around 15% of its business is there. One of those asymmetric punishment things. I got in too early and the position was under water for a while, but is doing OK nowadays (and the yield based on original acquisition price is generous).
Both RCL and CCL (and NCL) award significant on-board-credit (to cover expenses of all sorts) to stockholders who take any of their ships. We are currently traveling 6-10 months a year (where many of the stock ideas come from) and while only a fraction is on ships (mainly to get from point A to point B around the world), these positions have been very profitable beyond what’s shown here.
Schneider Electric (yup, it’s a French company) is best known in the US as the owner of the APC line of computer battery backup systems. It and ABB are vestiges of a group of electrical equipment manufacturers (which at one point also included Emerson, Eaton, GE, Seimen and Phillip) which I had assembled when I thought the US had no choice but to beef up its electrical grid. I still think that it will be a requirement if electric cars become “all the rage”, but I got bored of waiting. Similarly, Nestle and Danone are vestiges of a theme that bottled water will be a growth industry world-wide and the grouping used to include Coke and Pepsi. I still think the idea is valid, but I got a bit bored waiting, picked up my chips and bet on other numbers.
As a student of relative currency valuations and of how they tend to reflect on equity prices, things are fairly stable right now. Interestingly, the Swiss market has gone up, despite a rise in the Swiss Franc and the Aussie market has stagnated despite the currency being a bit low. The US equity market still drives world share prices, but I’m wondering if, the next time we plunge, the Chinese will not attempt to fill the vacuum - in the fashion that they are now filling our shoes in international trade agreements and foreign aid to emerging nations. Their Silk Road project, their driving of the production of electrical cars, their penetration into the high-speed train field and many other signs indicate that it is likely that the RMB will, within the next few years, become an accepted trading currency - forcing it to appreciate. China, I assume, is currently turning the ship so that this will not trash a dependence on an export economy. As all currency valuations are relative (gold being non-issue), this would favor RMB oriented investments. Incidentally, my holding of Jardine Matheson, while listed in Hong Kong, has massive investments in China as well and was my first dip of a toe into those waters (I figured, at the time, that they knew more about investing in China than I did. They’ve underperformed a bit, but still have done OK for a security blanket).
Thanks again for making me think this mess through
Last November, when I stumbled across this board, I posted my portfolio. I admit it took holding my nose, squeezing my eyes shut and trying to understand a type of stock evaluation which went against every fiber of my soul. Well, I figured the only way to learn how to swim is to jump off a bridge, so I drank some Kool-Aid and put together a group of stocks based on the discussions here. This presented a philosophical problem as I had just decided to divest a chunk of my portfolio (about 25% of it) based on a combination of valuation and timing issues. So I did both. This is now forcing me to re-evaluate the remainder of my old portfolio - a task which is still underway. Today's activity included selling my position in ANET (for a profit) and picking up MU (thanks Ant). Contrary to most Americans, I am a firm believer in currency diversification, which my portfolio reflects. I have separate the sections into nationalities for ease of visualization. I have also separated out a number of "vulnerable" shares which are currently on the chopping block. EU and UK (European) shares make up about 19% of total portfolio Swiss shares (separate because of currency diversity) make up about 15% of portfolio Asian and emerging market shares make up about 18% of the total portfolio Australian shares (mostly miners) make up about 16% of portfolio US shares make up about 32% of total portfolio - of which about 1/4 are "Saul type". OK, look - at least I'm getting there bit by bit :-) Jeff (Note: I've changed location of profit/loss column for ease of presentation) Company % Gain/Loss % of porNotes: BHP.AX Bhp Blt Fpo 15.33% Australia 6.49% NAB.AX Nat. Bank Fpo -19.07% Australia 0.03% NCM.AX Newcrest Fpo 104.40% Australia 0.19% RIO.AX Rio Tinto Fpo 19.05% Australia 9.28% Total Aussie 15.99% ABBN.VX Abb Ltd N 5.30% Switzerland 1.20% ADEN.VX Adecco N 5.79% Switzerland 0.03% NESN.VX Nestle N 13.86% Switzerland 6.65% NOVN.VX Novartis N -2.43% Switzerland 4.28% ROG.VX Roche Gs -14.17% Switzerland 2.69% Total Swiss 14.85% AYX Alteryx, Inc. Class A -2.06% 1.20% MU Micron Technology, Inc. 0.06% 1.55% NKTR Nektar Therapeutics -1.87% 0.59% NTNX Nutanix, Inc. -3.70% 0.63% NVDA Nvidia Corporation 8.24% 0.62% OKTA Okta, Inc. 15.49% 0.79% PSTG Pure Storage, Inc. Class A -4.94% 0.52% PVTL Pivotal Software, Inc. Class A -7.50% 0.44% SHOP Shopify Inc. Class A Subordinat 21.81% 0.71% SQ Square, Inc. Class A 20.14% 0.56% TWLO Twilio Inc. Class A 36.07% 0.53%Blended profit (Saul s 5.03% Total Saul's Board Ins 8.14% SMG Scotts Miracle-Gro Company (The 2.03% 2.14%Marajuana play DHR Danaher Corporation 46.71% 1.42% FTV Fortive Corporation 74.77% 0.52% FB Facebook, Inc. 12.29% 4.57% GOOG Alphabet Inc. 13.93% 13.21% US growtth plays 21.85% SJM J.M. Smucker Company (The) New 413.49% 0.07% BAM Brookfield Asset Management Inc -2.71% 1.48% CCL Carnival Corporation 15.88% 0.16% NCLH Norwegian Cruise Line Holdings 0.11% 0.13% RCL Royal Caribbean Cruises Ltd. 256.96% 0.30% Vulnerable US 2.13% BP Bp P.L.C. 8.68% England 2.19% RDS-A Royal Dutch Shell Plc Royal Dut 23.47% England 8.53% SLB Schlumberger N.V. -2.01% France 1.68% SAFRY Safran 16.80% France 1.46% SAN Banco Santander, S.A. Sponsored -0.74% Spain 2.70% SBGSY Schneider Electric 41.65% France 0.48% SNY Sanofi American Depositary Shar -9.26% France 1.87% Europe 18.91% FANUY Fanuc Corp 25.27% Japan 1.16% FYRTY Familymart Uny Hld 171.91% Japan 0.36% OMRNY Omron Corp 103.19% Japan 2.68% SFTBY Softbank Group Co 20.89% Japan 0.89% SVNDY Seven & I Holdings 23.04% Japan 0.94% Japan 6.02% JMHLY Jardine Matheson 19.64% Hong Kong 1.61% BABA Alibaba Group Holding Limited A 0.20% China 0.98% BIDU Baidu, Inc. - American Deposita -5.43% China 0.60% IQ Iqiyi, Inc. 5.17% China 0.56% TCEHY Tencent Hldgs Ltd 24.08% China 2.57% China 6.32% IEMG Ishares Core Msci Emerging Mark 2.45% Emerging Mkt 1.37% VWO Vanguard Ftse Emerging Markets 4.10% Emerging Mkt 4.41% Misc. Emerging Mkt 5.78%
I notice that your cash holdings or bond like instruments are not listed as a percentage anywhere. That would give a fuller idea of your allocations. How much cash do you keep on the sidelines for investment opportunities, for example, plus living needs.
In general, the fixed income stuff has been individual bonds purchased during the financial crisis and with a ten year +/- maturity date, with the assumption that the financial disruption would be a decade long event. Most of these have recently matured or are due to mature within the next year or two.
With the exception of Chinese RMB instruments, foreign cash positions in AUD and CHF have been either converted to equity positions in their respective markets (shown above) or to USD with the expectation that USD will rise with higher interest rates.
Cash position has also increased as total (nominal) exposure to US equities has been reduced (though “Saul type” exposure has been added to compensate for the expected growth loss.
Liquid cash (USD) in bank accounts is now earning 2% interest and I expect that to increase over the coming year.
My personal philosophy is that cash is an asset. It has different properties than stocks and bonds, but keeping money in cash is an investment position, rather than “uninvested” funds to be deployed on “real” investments. Exposure to equities is now at about 20% of total assets, so yes, I am ready to deploy more should investment opportunities arise.
Why so small an investment in stocks at this point? Well, my expectation (right or wrong) is that we are heading for a noticeable recession about two years from now. Since these things are hard to predict, I am beginning to prepare early (and, of course the next recession could be ten years from now, so I’m still in the game). Interest rates will be both the signal and form part of the opportunity.
Fortunately, “economies of scale” still allow us to travel 6-10 months a year during retirement while still increasing our assets each year. I have, for a number of decades, been “pretty lucky” when it came to moving money between currencies to take advantage of expected shifts in ratios, while maintaining diversity (and a sense of personal paranoia:-). The “downside” is, while my “visualization” of net worth is still USD biased, I am far more aware than most Americans that “net worth” trajectories are very dependent on the currency filter you are looking through when you take the measurement.
That said, stocks have always interested me more than other investments (and even allow me to intermix my passion for currency biases), so despite my desire to arrange things around a few index funds for the benefit of my wife being able to handle things if I kick the bucket, I suspect I’ll always try to beat the averages by playing with individual issues.