samedi 11 novembre 2017

Sequoia Fund's update

Soon, I'll write my usual post about superinvestors, because what they bought lately will be out. It's gonna be interesting to see what they bought in an expensive market.

I'm a little late on this one, but Sequoia Fund's third quarter letter was out about one month ago and it told us the late activity of the fund:

They added to their large position in Google/Alphabet (undisclosed increase);
They slightly increased their position in Jacobs Engineering to about 3% of the total portfolio;
They increased their position in Wells Fargo to 3,2% of the total portfolio;
They initiated a mysterious new position (anyone wants to guess?)

They trimmed their positions in Chipotle, Mastercard, TJX, Waters and Constellation Software bonds. They exited their positions in Croda and Danaher, two stocks about which nobody talks.

Chipotle is still a fucking joke. The stock was selling for about 400$ a year ago and is now selling for about 280$. Bad move, Sequoia. Stay away from whatever Ackman touches,because it transforms into shit. Everybody knew a year ago that it wouldn't be easy with Chipotle. Why trying it anyway?

About 90% of the portfolio is invested and 10% is in cash.

Finally, here's the top 10 holdings:

Berkshire Hathaway: 11,8%
US Treasury bills and cash: 9,7%
Alphabet: 9,4%
Mastercard: 7,5%
Carmax: 6%
TJX: 5%
Constellation Software: 5%
Dentsply Sirona: 4,8%
Rolls Royce: 4,8%
Liberty Media Corp: 4,2%

Whatever I'm saying here, I believe that most of the moves of Sequoia are great and are worth following. Alphabet is a fucking monopoly. It's a huge cap too (720 billion dollars), so it surely won't double over night, but is anyone thinking this stock could seriously be threatened or losing it's ultra dominant position? Plus, they're full of cash. Substract the cash and you'll find that it's not that an expensive stock...

With that top 10, as good as all theses stocks are, do you still believe Sequoia invests mostly in mid caps?

4 commentaires:

  1. I have great respect for the brains behind the Sequoia Fund. Nevertheless, I wonder how their top 10 holdings would fare against Robin Speziale's Penny Stock Portfolio which was established in August of 2017. Here's his list of world beaters (microcaps)...

    Namsys Inc
    Vigil Health Solutions
    Pioneering Technology Corp
    Vitreous Glass Inc
    AirIQ Inc
    DMD Digital Health Connections Group Inc
    Redishred Capital Corp
    Sunora Foods Inc
    Bevo Agro Inc
    Imaflex Inc
    Diamond Estates Wines & Spirits Inc
    CVR Medical Corp
    Intrinsync Technologies
    Greenspace Brands
    Ten Peaks Coffee
    Ceapro

    Another Billionaire money master (David Einhorn of Greenlight Capital) is short Netflix, Tesla and Amazon. How well will he do shorting these bubble stocks as he calls them?

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    Réponses
    1. Einhorn is really a gambler. He’s into stock market mainly for emotions, it seems.

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    2. Pene could you do an analysis of Real Matter? on TSX:REAL, i've been buying on weakness ever since IPO at 15$. If anyone else has any thoughts please don't hesitate to give your input.

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  2. Your comment re: market cap is interesting. One of my models is called the "Hillside Small Cap Growth" model portfolio. Until recently we held Facebook. My views on market caps has changed over the past few years especially during this age of massive monopolies... or companies that are huge with large economic moats. While in theory it is true that it's 'easier' to double a $250m company than a $250B company I'm not convinced anymore. As we get later into this cycle, I'm even less convinced. I'm actually in the process of changing the name of our model portfolio to simply 'Hillside Growth.' Go where there is growth and a consistent history of high (or above average) ROE generation. If it's in a $100B fine, if it's in a $150m, that's fine too. Sorry; not very elegantly written but I'm pretty sure I'm preaching to the choir here so my poor English matters less!

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