It was time to do spring cleaning for our portfolio.
I decided to get rid of all very small positions. Some of them were initially small extremely risky bets - I recall labeling in blog as "lottery tickets" - shrinking to fraction of what was invested. These included Leading Edge Material Corp (ex. Tasman Metals position) and Nautilus Minerals Inc. (which actually could not be sold since there has been trading halt since Feb 21, 2019 due to restructuring).
There was also a small stake of Wabtec Corp. that we got from General Electric in connection to GE Transportation merge to Wabtec. Nothing wrong with that company except didn't want to stick to a very small position so the call was between adding some more at current valuation or getting rid of that altogether.
Few small Finnish corporations were also dumped as bad calls from my part based on too much reliance for analyst estimates for the "fair price" of these companies. Luckily small positions to start with so no significant damage done.
Once can get rid of Nautilus Minerals Inc. we are down to 23 companies.
Thursday, March 14, 2019
Wednesday, January 2, 2019
Portfolio overview
Our starting portfolio allocation for year 2019 is as follows:
No bonds. We simply substitute bonds with quality dividend payers in our portfolio.
The big changes compared to year ago are:
Geographical Allocation (stocks):
Actually, place of incorporation is pretty meaningless for most corporations we have invested in. Most operate and sell globally.
Sector Allocation is heavily tilted towards technology companies:
Top 5 positions - in order of weight in portfolio:
There are now 7 technology companies (semiconductor/product/services) among largest 10 positions. Out of these 4 are in semiconductor business. Thus, short term volatility to be expected ..
- Stocks 98,5%
- Gold 1,4%
- Cash 0,1%
No bonds. We simply substitute bonds with quality dividend payers in our portfolio.
The big changes compared to year ago are:
- Emerging markets exposure ramped to zero (money shifted to U.S. market)
- Exposure to technology sector ramped up to 48% of entire portfolio.
- All investments are now directly made to individual stocks (compared to 19,4% via ETFs on 1.1.2018).
Geographical Allocation (stocks):
- Europe 58,1%
- North America 41,9%
- Emerging markets 0%
Actually, place of incorporation is pretty meaningless for most corporations we have invested in. Most operate and sell globally.
Sector Allocation is heavily tilted towards technology companies:
Sector Allocation (stocks)
Top 5 positions - in order of weight in portfolio:
- Siili Solutions (Finland)
- Berkshire Hathaway (USA)
- Nokia (Finland)
- Apple (USA)
- UPM (Finland)
There are now 7 technology companies (semiconductor/product/services) among largest 10 positions. Out of these 4 are in semiconductor business. Thus, short term volatility to be expected ..
Tuesday, January 1, 2019
Portfolio performance 2009-2018
Happy New Year 2019!
It's once again time to check how our portfolio fared in the previous year against passive index investing.
The year 2018 was a roller coaster ride of ups and downs in the market. We ended deeper into red than ever before in the 10 years that I have kept record of our performance.
The bencmark investment* was down 6,1% and our portfolio dived 10,8%.
Many of our largest positions did quite poorly compared to the broad market. Also, we jumped too early into General Electric and saw quite a slide there. Semiconductors - especially Western Digital Corporation (down 53%) - did their share of damage. My decision to take many small cap companies in Finland into portfolio also turned out at least badly timed. Nokia Corporation was pretty much the only one beating the market with clear margin (up 29%).
In terms of cumulative yearly gains, we are now 1,9% below the benchmark investment. In the larger scheme of things (cumulative gains net of taxes 134% so far) this is very small deviation. However, the long term goal is to outperform the benchmark I have set for our investments.
Going into 2019 we continue to be almost 100% invested into stocks. I will cover our current allocation in the next post.
*) The "benchmark investment" is an imaginary passive ETF that closely tracks the performance of MSCI all country world (ACWI) index in euros (more info here).
It's once again time to check how our portfolio fared in the previous year against passive index investing.
The year 2018 was a roller coaster ride of ups and downs in the market. We ended deeper into red than ever before in the 10 years that I have kept record of our performance.
The bencmark investment* was down 6,1% and our portfolio dived 10,8%.
Portfolio performance 2009-2017.
Note: "Difference" column uses exact values as input rather than figures rounded to 1 decimal that are displayed.
Many of our largest positions did quite poorly compared to the broad market. Also, we jumped too early into General Electric and saw quite a slide there. Semiconductors - especially Western Digital Corporation (down 53%) - did their share of damage. My decision to take many small cap companies in Finland into portfolio also turned out at least badly timed. Nokia Corporation was pretty much the only one beating the market with clear margin (up 29%).
In terms of cumulative yearly gains, we are now 1,9% below the benchmark investment. In the larger scheme of things (cumulative gains net of taxes 134% so far) this is very small deviation. However, the long term goal is to outperform the benchmark I have set for our investments.
Cumulative gains of our portfolio (blue line) vs. benchmark investment (red line). 31.12.2008 = 100.
Going into 2019 we continue to be almost 100% invested into stocks. I will cover our current allocation in the next post.
*) The "benchmark investment" is an imaginary passive ETF that closely tracks the performance of MSCI all country world (ACWI) index in euros (more info here).
Saturday, December 29, 2018
NVIDIA in - Last ETFs out
There has been considerable changes in portfolio due to recent downward slide in stock market.
I am long term bullish on the technology stocks over pretty much any other sector and felt that the recent series of slides and crashes offer a good point to increase our exposure into U.S. technology stocks and semiconductor stocks in particular.
NVIDIA (NASDAQ: NVDA) is the latest addition to our portfolio. Both current P/E and forward P/E of NVIDIA have come down to below 20 (source: Finwiz.com). It seems like a reasonable multiple given the 'E' or earnings part of the ratio will hold.
Adding NVIDIA is part of my plan to increase our semiconductor exposure while hedging bets over larger amount of companies than before. Right now, especially the 'commodity' end of semiconductor stocks offers significant short term risk and drama while market speculates over timing of the cycle bottom and how deep it will be this time.
Overall, the share of U.S. technology stocks in portfolio have increased now significantly over last few months with addition of Apple (NASDAQ:AAPL) and NVIDIA and additional investments into some of our existing semiconductor positions: Micron Technology (NASDAQ: MU) and Western Digital Corporation (NASDAQ: WDC).
These moves have been mostly funded by exiting all ETF positions. Thus, the performance of the portfolio is now down to 26 individual stocks out of which 10 largest positions make up over 60% of the entire portfolio.
More about the portfolio after we get year 2019 going..
- Increased technology stocks exposure
- Have now concluded selling all ETFs
I am long term bullish on the technology stocks over pretty much any other sector and felt that the recent series of slides and crashes offer a good point to increase our exposure into U.S. technology stocks and semiconductor stocks in particular.
NVIDIA (NASDAQ: NVDA) is the latest addition to our portfolio. Both current P/E and forward P/E of NVIDIA have come down to below 20 (source: Finwiz.com). It seems like a reasonable multiple given the 'E' or earnings part of the ratio will hold.
Adding NVIDIA is part of my plan to increase our semiconductor exposure while hedging bets over larger amount of companies than before. Right now, especially the 'commodity' end of semiconductor stocks offers significant short term risk and drama while market speculates over timing of the cycle bottom and how deep it will be this time.
Overall, the share of U.S. technology stocks in portfolio have increased now significantly over last few months with addition of Apple (NASDAQ:AAPL) and NVIDIA and additional investments into some of our existing semiconductor positions: Micron Technology (NASDAQ: MU) and Western Digital Corporation (NASDAQ: WDC).
These moves have been mostly funded by exiting all ETF positions. Thus, the performance of the portfolio is now down to 26 individual stocks out of which 10 largest positions make up over 60% of the entire portfolio.
More about the portfolio after we get year 2019 going..
Wednesday, December 5, 2018
New position: Apple Inc.
I have iniated a position in Apple (NASDAQ: AAPL) recently.
The stock has definitely trasformed from growth stock to a value stock and at the current level (closed in Dec 4th at $176.69) should in my mind offer a good entry point for a long term investor.
Apple has the kind of products, services, brand and pricing power that most other companies can only dream about. That pretty much sums up the "why" of the investment along with the price tag.
In terms of current valuation & financials we are looking at
The stock has definitely trasformed from growth stock to a value stock and at the current level (closed in Dec 4th at $176.69) should in my mind offer a good entry point for a long term investor.
Apple has the kind of products, services, brand and pricing power that most other companies can only dream about. That pretty much sums up the "why" of the investment along with the price tag.
In terms of current valuation & financials we are looking at
- Forward Price per earnings est. 12,0
- Price per free cash flow 16,7
- Return on Equity 48,7%
- Cash per share $13,90
- Dividend yield est. 1,65%
- Long term debt / Equity 0,87
- Quick and current ratios both at 1,1
All above based on data extracted on Dec 5th 2018 from Finwiz.
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