April 2024 Report

Well, I finally went into the negative territory for the year with the April results. The decline can be attributed Constellation Brands and Visa. Constellation Brands delivered a good quarterly result but sold off on the news. I am still very bullish on Constellation Brands and really like their capital return to shareholders via dividend / share buyback. Visa is just an amazing compounding machine that will do just fine in this inflationary environment. Nothing has fundamentally changed with these companies, and I intend to continue to hold them for the long term.

I have not been involved in any recent merger arb plays as I still find it tricky with this administration. The FTC attempt to block Tapestry’s acquisition of Capri is such a joke. I really want to see the FTC lose this case as this is a total waste of tax-payers money to fight this merger. In my wildest dream, I cannot see how the consumer is harmed by this merger. We are talking about “accessible luxury” handbags! Ok, enough of my rant on the FTC.

I still have a healthy cash position at ~ 8% and slowly building on that with the premiums from selling options. I am just waiting patiently for a good opportunity. I have no problem waiting with cash yielding ~ 5%.

 
2024 Performance = - 2.41% with the running monthly returns as follows:

January + 0.02%
February +0.99%
March – 0.33%
April - 3.07%

March 2024 Report

I’m not making much head way this year with a loss of -0.33% in March. It doesn’t help when Apple (my largest position) declines ~ 5%. I’m just glad that Constellation Brands gained ~ 9% and helped to keep the portfolio’s loss contained. Cash remains at ~ 8% and will deploy when opportunities arise.

I’m maintaining a relatively conservative approach with the goal of capital preservation. I don’t think I will ever go All-In in any position like I did in my early years. I guess you get wiser as you age. I experienced the 1997 – 1998 Asian Financial Crisis, 2000 dot.com bubble and the 2008 Financial Crisis. The last thing I want to do is to lose a big chunk of my portfolio on a dumb bet.

Tesla is starting to look interesting with its recent decline. Fundamentally, they are currently in a rough spot with the macro issues, but they are the clear leader in their segment. It is interesting that I am seeing more used Tesla’s for sale at a local used car dealership. It used to be a rare to see a used Tesla for sale, but now it’s very common. The difficult part is how low will the stock go?

 
2024 Performance = + 0.68% with the running monthly returns as follows:

January + 0.02%
February +0.99%
March – 0.33%

February 2024 Report

I’m off to a slow start in the year and lagging the market. I eked out a small gain of 0.99% in February with Visa and Mastercard doing the heavy lifting, while Apple (my largest position) declined ~ 2%. Am I concerned? No, the goal is simply not to lose money at this point. A super gain would be nice, but steady growth and some income is the way to go for me now. I am still on the hunt for a decent growth company with a dividend payout.

Here’s a current breakdown of my main portfolio with the dividend yields (adjusted to my cost basis). 

When I started, I really did not pay attention to the dividends, but over time the dividend payouts have contributed positively to the portfolio. Right now, I’m simply reinvesting the dividends into the purchase of additional shares, which has nice compounding effect. Dividend paying stocks are the way to go over the long run. For example, my very first purchase of Visa is now yielding 18.90%. I am finally realizing the power of dividends! 
 
No arb plays at the moment, just selling some puts on high volatility stocks (Tesla, Nvidia, etc...) to generate small income. 

That’s it for now…
  
 
2024 Performance = + 1.01% with the running monthly returns as follows:

January + 0.02%
February +0.99%

January 2024 Report

Happy New Year! What a great start to the year with a whopping +0.02% gain! This can be attributed to the recent pull back in Apple, which makes up ~ 40% of the portfolio. It’s a high concentration in one position and I’m actually considering adding to it. I view the Vision Pro as an iPhone moment and a new inflection point for Apple. I won’t be purchasing the first gen Vision Pro, but a maybe a second or third gen model. I can just imagine making trades with just a blink of an eye…  

No arb plays at the moment. With a wacko FTC chair, they will take an opportunity to block everything in sight. It’s no longer like the good old days when you can pretty much guarantee a HSR approval for any bolt on pharma acquisition. Most acquisitions will still go through, but you have to sweat it out a bit as they like to drag things out with a Second Request.

We need some nice IPOs this year…

 

2024 Performance = + 0.02% with the running monthly returns as follows:

January + 0.02%

2023 Year End Performance

I have to admit that I was too cautious with my initial outlook for 2023. The performance of the market was a pleasant surprise as a good portion of the crowd was bearish based on the inflation numbers. I was skeptical that the Fed would be able to bring down inflation this quick, but I have to admit that they have done a good job so far. There is still work to be done, but it looks like the worst is behind us. I did manage to beat the S&P 500, which I can once again thank Apple as well as Visa. I’m still looking for some good dividend paying stocks to add to my portfolio. As my age creeps up, I need to start generating some more passive income and dividend paying stocks will be part of that strategy.

My current holding is as follows:

I decided to sell out Airbnb in December as it entered long term capital gains territory and I’ve become more cautious with the company outlook. It’s a good service and I’ve used Airbnb in the past, but more recently I’ve booked with hotels instead of Airbnb’s whenever possible. The cost advantage is minimal and in many cases more expensive than hotels. I know I was extremely bullish when it first came public, but with the recent clamp down by local communities it’s going to be more difficult to sustain its growth. It’s still a nice cash generating machine, but at this point it’s just too risky for me.

This was a great year for generating income as the Fed boosted the short-term rates. During the first half of the year, I was routinely picking up T-bills for the yield. There was also a few good arb plays that generated some nice gains such as Activision. I was less aggressive than in previous years with selling options to generate income. I didn’t feel the need to take on additional risk as the short-term rates were high. Selling options will continue to be part of my overall strategy.

So, looking out in 2024, the market is pricing in rate cuts by the Fed in response to the anticipated economic slowdown. I guess interest rate sensitive sectors should do well such as financials and more speculative companies. I will still focus on large cap companies with dividend payouts. I'll be happy if I can generate 10% + return for 2024. Who knows, maybe I’ll just transition a portion of the portfolio to the S&P 500 index and relax a bit.   

Have a Happy New Year, Good Health and Fortune to All!

2023 Performance = +29.76% with the running monthly returns as follows:

January +8.04%
February -1.60%
March +6.31%
April +2.39%
May +1.02%
June +7.00%
July +3.85%
August -2.10%
September -6.10%
October -1.62%
November +8.42%

December +1.88%

 

Annual performance for the past twelve years is as follows:

2012 +61%
2013 +44.61%
2014 +29.47%
2015 +33.48%
2016 +14.61%
2017 +42.12%
2018 -4.11%
2019 +40.17%
2020 +32.81%
2021 +13.58%
2022 -14.14%

2023 +29.76%

CAGR from 2012 to 2023 = 25.18%

 

November 2023 Report

November exhibited strong results during this seasonally strong period for the markets. The portfolio increased +8.42% which can be attributed to Apple (42% of portfolio) gaining ~ +11% and Visa (23% of portfolio) ~ +9%. Hopefully, the momentum continues through December and end the year on a strong note. Cash holding remains ~ 5% and is currently generating a yield of ~5%, which is not bad. I would have to see some good compelling opportunities to put this cash to work.

I did not participate in any merger arb plays. Just continuing playing the short put game by picking up some pennies here and there.

I know, this must be one of the most boring monthly reports as the portfolio remains stagnant as I’ve evolved into a buy and hold investor.

That’s all I have to report…

 
2023 Performance = +27.37% with the running monthly returns as follows:

January +8.04%
February -1.60%
March +6.31%
April +2.39%
May +1.02%
June +7.00%
July +3.85%
August -2.10%
September -6.10%
October -1.62%
November +8.42%

October 2023 Performance

October was not kind to the portfolio. The big drag to the portfolio can be attributed to Constellation Brands, which declined ~ 6.5%. Apple and Visa were relatively flat. So overall, the portfolio declined ~1.62%. As we enter the seasonally strong months, I’m cautiously optimistic that we will end the year on a strong note.

I did go relatively big on two merger arb plays: Horizon Therapeutics and Activision. I went heavy on both via short Puts as the risk reward was favorable to a successful close. I managed to pick up some spare change in front of a steam roller without being flattened.

So nothing new, just trying to play it safe to the end of the year.

 
2023 Performance = +17.48% with the running monthly returns as follows:

January +8.04%
February -1.60%
March +6.31%
April +2.39%
May +1.02%
June +7.00%
July +3.85%
August -2.10%
September -6.10%
October -1.62%