Saturday, March 02, 2024

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%

Tuesday, February 06, 2024

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%

Sunday, December 31, 2023

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%

 

Sunday, December 03, 2023

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%

Tuesday, November 07, 2023

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%

Monday, October 02, 2023

September 2023 Performance

September was a brutal month with just about everything taking a dive. My portfolio declined 6.10% lead by all of my big holdings: Apple, Constellation Brands and Visa. It’s a really challenging market to have conviction to take on new positions. I do have a shopping list ready in the event the market does take a plunge for whatever reason.

I thought the market was starting to recover a bit with the recent IPOs. Other than the first day pop, the stocks (i.e. Arm Holdings and Instacart) could not hold onto their gains. Need some strong IPO follow through action to show market strength.

Not much on the special situations front. Still doing some short Puts here and there, but that has been it. A really, really boring month…
 

2023 Performance = +19.41% 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%

Friday, September 01, 2023

August 2023 Performance

August was a mixed bag with the market taking a small dip. The performance of my 3 largest holdings were as follows: Apple -4.27%, Visa +3.60% and Constellation Brands -4.29%. This contributed to an overall decline of -2.10% for August. It is really hard to have the conviction to initiate new positions in this market environment. I would like to see some high-quality IPOs come to market, but I do not see that happening right now. It is also hard to beat T bills with a ~ 5%+ risk free return.

In terms of special situations, I did play Activision and exited the position for a small gain after the dividend payout. I continued to play the short put game to make some pocket change. Also participated in the J&J tender offer (odd lot) for Kenvue and currently holding onto the position. I usually flip these spin offs, but Kenvue has an attractive valuation and a nice dividend payout. Who knows, maybe I will start to build on this position. Spin offs historically have outperformed the market.

Kind of disappointed with Fidelity with their recent online platform issues. Their recent performance has gone way down with the site being slow and system going down near the close of trading. I was with TD Ameritrade, and they also had their issues. Who else is left to try? Thinking of Interactive Brokers.
 
2023 Performance = +27.20% 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%