Friday, January 14, 2011

Top 10 most owned stocks by super investors tracks investment activities of successful value oriented “super investors” such as Warren Buffett and Bruce Berkowitz. This article examines the top 10 most owned stocks by the 48 investors tracked by Dataroma. Microsoft (MSFT) is the most owned stock currently (21 out of 48 investors holding it). Dell is the 10th most owned stock (12 out of 48 investors holding it). As you can see from the table below, the Top 10 has changed a lot in 4 years. Only three stocks remain the same: Johnson & Johnson (JNJ), Wal-Mart Stores (WMT) and Dell Inc (DELL).

Source for data: Dataroma. Used with permission.

A closer look at history revealed that only Johnson & Johnson and Wal-Mart have stayed in Top 10 in all quarters for the past 4 years. Between Q1 2007 and Q2 2008 Dell dropped out of Top 10. By plotting the rankings of these three companies quarter by quarter it becomes clear which stock has been the true favourite of these super investors between 2007 and present: Johnson & Johnson (JNJ).

Source for data: Dataroma. Used with permission.

Note: 11th place means “out of top 10” (i.e ranking lower than 10).

It is also interesting to see that now half of the Top 10 consists of financial or insurance companies. Back in 2007 there were only two: AIG and Citigroup. Neither of those companies are in Top 10 anymore.

Full disclosure: Long JNJ.

Top yielding stocks

For all value investors seeking Top yielding stocks, the following web site might be of interest:
Hat Tip: user ”stocksteve3” at Seeking Alpha.

Wednesday, January 12, 2011

Can a company be evil?

Pecunia non olet ("money does not smell") is a Latin saying that was originally related to the urine tax levied by the Roman emperors Nero and Vespasian in the 1st century upon the collection of urine [Wikipedia].

Most investors are in it for the money. But for many, like myself, it is not the only motive. I also want to own parts of businesses I see as great companies and to which I would have no problem to be personally associated with. If the company is making lives of people better or is particularly "green" - it is a bonus. But can there be EVIL companies?

Certainly many seem to view resource companies like oil giants and miners as "evil". I don't think they are evil. They are just producing something that is needed and they try to do it the best they can. Almost everybody in the developed world use products that leverage work of oil and mining companies on daily basis. If you think you don't use or have gold: check your computer that you currently are using to read this. There is a good chance that there is gold in either inside of the processor package (bonding between the chip and the chip package) or in the printed circuit board (surface finish such as ENIG). I am almost certain that you have gold in some device you are using since it has so many uses in electronics. And oil/diesel/gasoline. If you eat then you are using oil-derived products indirectly (used in transportation and farming).

An evil company to me is such that deliberately breaks laws, misleads public or dumps waste in the environment in an illegal or irresponsible manner (mining companies are forced to dump the so called tailings which I consider normal operation if done responsibly). Also exploitation of child or slave labor directly or indirectly is evil - pure and simple. Working conditions are also something that may turn a company "evil" in my mind.
There is a so called "The Public Eye Award" that has been organized since year 2000 by Berne Declaration and Friends of the Earth (in 2009 replaced by Greenpeace). It marks a critical counterpoint to the annual meeting of the World Economic Forum (WEF) in Davos. The Public Eye reminds the corporate world that social and environmental misdeeds have consequences - for the affected people and territory, but also for the reputation of the offender.

The "contenders" for this "award" are this year (in the order of ranking at the time of writing this article):
  1. BP: The oil disaster in the Gulf of Mexico cost 11 people their lives and has killed off vast marine areas for years to come.
  2. Neste Oil: Under the misleading name of “Green Diesel", Neste Oil mass-produces biofuel that results in the clearing of rain forest.
  3. Axpo: Axpo obtains Uranium from the most radioactive place on Earth and has been concealing this fact for years.
  4. Foxconn: Foxconn’s miserable working conditions drove at least 18 young Chinese to commit suicide in 2010.
  5. AngloGold Ashanti: AngloGold Ashanti’s gold mining in Ghana contaminates soil and poisons people.
  6. Philip Morris: Philip Morris filed a complaint against Uruguay’s anti-smoking laws and thus undermines public health policy.
While I'm not a big fan of Greenpeace due their anti nuclear power stance which I find unpractical as the so called "green" alternatives are really not that green if you take the whole supply and material chain into account. And I don't like some of their other activities, but this type of activity I can support. I do take this type of information into account when doing investment decisions - at least I try to. Newmont Mining (one of my holdings) has been awarded this dubious price in 2009, but I do not find anything particularly "evil" in the background info. Open pit mining, like the ones in China used to extract key materials for wind turbines and hybrid cars, are not exactly good for the environment nor the people living nearby. But that's usually the safeast and cheapest way to extract minerals.

However, I did drop one gold miner from my portfolio because their safety history was just horrific. Gold mining is dangerous business, but there seems to be big differences between the operators. Some have quite poor safety records.
You can cast your vote by following this link:

Saturday, January 8, 2011

20 Nordic stocks yielding more than 4%

Nordic countries include Denmark, Sweden, Norway, Finland, Iceland and their accociated territories (e.g. Greenland). “Scandinavia” is also used often as a synonym for the Nordic countries, but it the strict sense Scandinavia only includes Denmark, Sweden and Norway. The region has population of approximately 25 million and cover 3.5 million square kilometres (Greenland accounting for around 60% of total area alone). [source: Wikipedia]

Picture: “Scandinavia from space in winter”. Source: NASA via Wikipedia.

If you are not familiar with these countries, you probably have heard about Vikings. They came from Scandinavia and between eight and eleventh century settled or raided most of Northern Europe including coastal Finland and cities like London. They sailed in the south all the way to Sicily in Mediterranean Sea and in the west all the way to North America. Their heritage can still be seen in the successful shipping and ship construction companies.

Denmark, Sweden and Finland belong to European Union. Out of these, only Finland belongs to eurozone, while others maintain their own currency. Danish krone has been tied to euro via ERM II mechanism since 1999 and is required to trade within 2.25% range of the specified exchange rate of 1 EUR = DKK 7.46038. [source: Wikipedia]

Here is a list of Nordic companies yielding more than 4% and which I believe are available to US investors either as NYSE/NASDAQ listed companies or via pink sheets (OTC). The source of the data is from stocks screener:
* While some of the companies are incorporated outside Nordic countries, I have counted them as Nordic companies because they are primarily listed in one of the Nordic stock exchanges and their roots and much of the operations lie in the region.

(pk) = Should be available via pink sheets / OTC market. I did not want to include the ticker symbols for pink sheets as you should do your own due diligence before investing in them or before deciding which is the right instrument to trade.

The companies directly listed either in NYSE or NASDAQ in the list above are:

Frontline: “The worlds largest oil tanker company”.

Millicom: “Millicom provides affordable, widely accessible and readily available prepaid cellular telephony services to more than 30 million customers in 13 emerging markets in Latin America and Africa where the basic telephone service is often inadequate and where economic development and rising personal income levels are creating increasing demand for communication services.”

Seadrill: “leading offshore deepwater drilling company”

Nokia: Worlds largest mobile phone manufacturer and a leading provider of telecommunications networks (via a joint 50/50 company with Siemens).

Statoil: “a leading energy company in oil and gas production”

For readers that have access to OMX Nordic, here is the full list of companies:

Remember to check forecast for 2010 yield & conduct do diligence before investing!

Tuesday, January 4, 2011

All-in on C-day

Today I established position in Cisco Systems (NYSE: CSCO) and added to my China Mobile and Chevron positions. So it was a C-day ;-)

Now I'm basically "all in" as they say in No-limit Texas Holdem game.

Saturday, January 1, 2011

Portfolio performance in 2010 and 2009

I calculated portfolio performance vs. alternative index investment for 2010 and also for 2009. In 2009 my gain (partly realized, partly unrealized) was 23% while comparable investment to index fund investing into MSCI All Country World Index (ACWI) would have yielded 23.8% year-on-year.

In 2010 my portfolio gained 16.3% while the ACWI index fund would have gained 19.5%. I lost to the index mainly due to my high cash and gold positions and overall defensive portfolio. I think this was quite expected. I also think I am underinvested currently to emerging markets, but I will correct this long term.

If my portfolio vs. index fund is compared starting from 1.1.2009 with no "reset" at year end in comparison then the numbers are 48.8% vs. index fund 53.9%.

The allocation at year end was:

Cash 10.8%
Gold 14.4%
Mining stocks 12%
Utilities 13.5%
Oil & Gas 11.3%
Pharmaseutical/Healthcare 14.3%
Telecommunications 13.5%
Technology stocks 10.2%

In terms of geography the allocation for stocks is:

Europe 44.9%
North America 44.4%
Emerging Markets 10.7%

Note: There is no index fund investing into MSCI ACWI and re-investing dividends. Therefore, I have constructed my own imaginary benchmark index fund out of MSCI ACWI index (net index in euros) against which I compare my performance. You can find a post from December describing the process in detail.