lundi 18 mai 2020

Portfolio review (may 18th, 2020)

Penetrator portfolio

Number of stocks: 24
Average ROE: 50
Average Forward PE: 25
Average Beta: 0,88
Biggest position: Alphabet (8,6%)
Smallest position: Heico (1,4%)
Cash on hand: 0,8% of the portfolio
Performance YTD: 2%
Performance of the S&P500 YTD: -10%
Relative performance: +12%

On december 31th 2019, my portfolio was about 10% cash. It helped a lot to have that much money left to face the crisis.

Plus, almost all the stocks I own recovered quickly from the crisis. So, I wasn't hurt that much, except for a few weeks. And I used these weeks to invest all the money I had. I could have done a bit better, but not that much.

I own less and less canadian stocks. There are a few great stocks here, in Canada, but most high-margin stocks are located in the USA. Actually, we have nothing that could be compared to Mastercard, Visa and Microsoft margins in Canada. And usually, a company that grows a lot (+15% each year) and that has high margins is a company that you should never sell (as far as things still look OK for these companies). How could these companies with a profile shared by only 1% of stocks should be sold for the same price as the usual stock?

Once you assimilate and accept that fact, you've made a giant step.

4 commentaires:

  1. Congratulations on spectacular performance!

    This dip in the market has been quite a wake up call for me. My portfolio has been utterly destroyed.

    I only have Canadian companies, PE 17, ROE 18, YTD performance -19% vs TSX -14%. Some holdings have negative PEs and ROEs now because they lost money.

    I spent all of my cash reserves buying stocks in January in my TFSA and then had nothing left in March. Since then, I have been just trying to work as much as I could and have managed to save some money but I haven't really bought anything (open limit orders were too low). I have not sold anything either. Now I have about 8.5% of portfolio in cash. Not quite sure what to do. Q2 will be very ugly for most companies I hold but not sure how the market will respond. The behaviour of the stock market does not make sense to me.

    Only Enghouse and Constellation Software had a positive YTD return. 39% of my holdings on cost basis (27% on current market value) dropped in half or more since January. MTY lost 2/3 of its value.

    My observations: Don't buy small companies. Only buy quality and dominant players. Don't buy Canadian stocks. Don't buy second class companies or suppliers of big companies even if they are cheaper than the big companies. Always keep at least some cash in reserve. Even with all of this written, I am still tempted to average down into the laggards if there will be another correction and wait until I break even. Selling or giving up on a stock idea is much harder than buying a new position.

  2. So far this year my portfolio is down 9.74 percent…I hold very little cash in my portfolio, I’m also fully invested in Canadian stocks…That’s just me. There are many different roads to Rome…

    As for the sell-offs, I’ve always just ridden them down and rode them back up although I can see the value of raising cash. Everybody is different. I’ve tried to arrange my investments in a way where I don’t have to make a lot of decisions. I just try to keep the faith and hold on. And as I’ve gained more experience investing I’ve found that I’m putting more emphasis on qualitative rather than quantitative inputs. That approach just seems to fit in better with my investing style and psychological nature. The numbers will always be important but an investor who relies on the precision of numbers is liable to be disappointed…they way I see it anyway. I prefer to focus on the management teams, the business model and the industry in which the company operates.

    I’ve also greatly reduced the number of my holdings over the last few years (from about 23 to 13). I run an unbalanced concentrated portfolio where I try to become more acquainted with the company itself. There can be a lot more volatility over the short term because of this but I’ve always equated volatility with risk. To me volatility its just noise, probably a lot like the noise I’m while writing this so I’ll just shut up now…

  3. correction..."never equated volatility with risk"

  4. For me, I'm up 47% YTD. How? I went into the year overweight Shopify (28%), Trade Desk, Dexcom, Paypal, Avalara, Alteryx, Kinaxis.. Didn't sell the drop, bought more Shopify and am up 74% on those shares. I follow Cybercash28 on twitter as well as Investors Business Daily & Motley Fool. Just buy stuff that I can see holding for a long period. Not a numbers guy so high P/E or ROE wasn't a factor. Just bought what others are buying. Not sure if I should lock in at this point though as I don't have confidence in the market this fall. I think there will be a second wave with the virus. Bought some QDEL a week or more ago which should go up as more tests are needed. I'm on the fence about sell in May. This is the best performance I've ever had and I think I'm getting greedy at this stage in the short term, long term I want to own these stocks.