Responsible Investor Portfolio Weekly Update, October 17th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI $DSV.CO $DANSKE.CO $BRK $AMWL $AAPL $JD $ADSK

It was a choppy week for the stock markets which continue to be dominated by the two narratives of the US presidential election and of Covid-19 numbers. The US stock markets were mildly positive, led by the Nasdaq (+0.8%), while the Stoxx declined 0.8% and the Italian index was 1.0% lower. The Danish stock market continues its rise and added another 0.6% gain.

The first significant week of the Q3 earnings saw notable beats in the banks stocks which have been lagging for most of the year. One of our bank stocks, $BK reported better than expected earnings on Friday. But it was not all rosy in that sector as $WFC missed earnings and tumbled on Thursday. Our exposure to the bank sector is limited and we will likely keep it that way for a while.

The earnings of one of our consumer cyclical stocks, $MC.PA, were extremely positive thanks to a beat on both the top and the bottom line: Q3 revenue was up by almost 4B€ ! The stock rallied 5% and is now up 13.6% since we bought it. Next week $SYF will report earnings.

We have reduced our $GRUB position this week: the stock has run a lot, +13.2% just in this last week, and after the takeover news I felt we needed to protect our profits in case the market or the stock was attacked by sellers.

The Covid-19 numbers are exerting more pressure on the physical world while e-commerce and tech companies in general thrive. I am getting ready to make a move on an online retailer (spoiler: not $AMZN) and I would like to increase our exposure to the technology sectors with companies such as $AAPL and $ADSK. Let’s see if this week will be the right one.

Our Responsible Investor portfolio was up 1.6% this week: based on the weighting of our stocks relative to the indices they are traded on, this corresponds to a 2.0% market beat.

The table below summarises the portfolio performance since inception.

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Responsible Investor Portfolio Weekly Update, October 10th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI $DSV.CO $DANSKE.CO $BRK $DQ $AMWL $AAPL

All stock markets were markedly higher this week, led by the US indices which rallied for most of the week, fueled by the president’s alleged recovery from C-19 and the possibility of another stimulus bill being passed in the not too distant future. Biden has increased his lead in the run for the presidency and while his policies are not considered positive by most Wall Street investors, the markets love clarity and stability, which a clean win would provide. Uncertainty and unpredictability have often led to an increase of volatility.

Up to now very few S&P 500 companies have reported their Q3 earnings and next week the earnings season goes in full swing with some large banks and it will be interesting to see whether or not they will be able to deliver better results compared to previous quarters. Year to date investing in banks has meant being on the losing side and valuations are very currently attractive; whether or not the stock prices will rise will mainly depend on their ability to grow their earnings.

Our Responsible Investor portfolio was up 2.4% this week. We have finally seen some positive movement on Webuild which closed the week 5.3% higher. The opening of the Gerald Desmond Replacement Bridge in the US was a significant milestone: let’s see whether the growth will continue over the next few weeks. The banks and financial stocks in our portfolio were on fire this week: $SYF is now up 34% since we bought it in late May. $GRUB has now reached the 30% mark and I would also like to mention our recent buy in the transportation sector $DSV.CO which is up 7% in less than 3 weeks.

We have made one buy this week, Warren Buffet’s $BRK-B which is a well known diversified business. While the purchase was triggered by a technical signal, it is intended to have a stabilising function similar to the one a position in bonds would have in a portfolio which mainly consists of stocks. In the past I have typically owned a 10-15% position in governmental bonds, mostly from BBB countries, but in this period I find corporate bonds or stable companies like Berkshire -which offer a moderate yet steady capital appreciation in the long term- more attractive.

The current positions of our portfolio amount to about 42% of the available capital, which means that we have 58% in cash. I am therefore always on the lookout for new buys: on my watchlist I have a renewable energy company like $DQ, a telemedicine play like $AMWL as well as $AAPL which will deliver a special event next week during which the launch of the new iPhone 12 is expected.

Some of our stocks pay a dividend, either yearly or quarterly: from this week onwards I will report the dividend adjusted growth of our portfolio. So far the dividends received have increased our overall performance by 0.8%, which is significant given that less than 5 months have passed since inception.

The table below summarises the portfolio performance since inception.

If you don’t want to miss my alerts, please subscribe to Responsible Investor or follow me on Twitter. I also run an eToro portfolio which currently has 35+ positions and can be accessed via this link.

Responsible Investor Portfolio Weekly Update, October 3rd, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI $DSV.CO $DANSKE.CO $NOW $QCOM $DQ $FDX $AMWL $CIEN $AAPL $GOOG

September is finally over and has seen the global markets go lower despite the uptrend in the last trading days of the month. Our Responsible Investor portfolio has beaten the market over this period by 0.9%. In mid to long term investing this is crucial because compounding is amplified relative to the market average performance. When friends ask me how to invest 10k € I suggest that they buy a US market index ETF because that´s too small a sum to diversify your portfolio with a group of stocks with which you can aspire to beat the market. Starting from 30 to 40k €, however, one can have about 25 to 35 different stocks, ETF or bond positions and it makes more sense to pick a diversified group of superior stocks rather than accepting the market average return.

I don´t normally keep a stock beyond a loss of 10% and in that respect construction company Webuild is a “stinker”: because I believe the stock has a great potential for capital appreciation and is somewhat subject to the fluctuations of the Italian stock market, I have not pulled the plug yet. This week I have lowered the stop loss price as you can see from the table below and when the technicals are right, I might even send an accumulation alert.

Volatility seems range-bound lately, especially in the last 3 weeks. It remains well above 20 and the news flow is such that there are less opportunities for it to reduce particularly considering there are now only 30 days to the US presidential election and one of the candidates has contracted Covid-19. The recent pullback has provided an entry point to a few good stocks such as $CIEN $AAPL $GOOG and $ORSTED.CO, let’s see if the coming week will be a good time to make a purchase.

Banks and financials were the strongest positions of our portfolio this week, with $SYF advancing by 9.2%, followed by $DANSKE.CO (5.7%) and $BK (4.0%). Our two consumer cyclical stocks, both trading on the French stock market also showed their strength as $MC.PA gapped 3.9% higher and $OR.PA rose by 1.9%. In the meantime very soft inflation data were published in Europe and with the second wave in full swing in most countries, it will be interesting to see what is the next move the ECB will make on the monetary policy side.

The table below summarises the portfolio performance since inception.

If you don’t want to miss my alerts, please subscribe to Responsible Investor or follow me on Twitter. I also run an eToro portfolio which currently has 35+ positions and can be accessed via this link.

Responsible Investor Portfolio Weekly Update, September 26th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI $DSV.CO $DANSKE.CO $NOW $QCOM $DQ $FDX $AMWL $SNOW

If it wasn’t for a strong day on Friday, all US markets indices would have been down this week, but the Nasdaq somehow pulled off a 1.2% weekly push higher, whereas the S&P500 was 0.6% lower and the Dow lagged with a 1.7% decline. The Russell 2000 (the US small caps index) tanked finishing the week 4% lower. The situation wasn’t that different in Europe as the Stoxx was down 1.1%, the Italian FTSEMIB even lower with a 1.4% decline and the Danish OMX25 was only nominally higher.

Finally a buy, and the first stock from the transportation sector in our Responsible Investor portfolio: DSV Panalpina ($DSV.CO), a Danish shipping company. I have been meaning to go long on this stock for months and waited for a pull back that never came. This is one of the typical mistakes of irrational investors who are often unwilling to buy a stock that is always going up. In fact, if the stock is undervalued, the fact that it is appreciating is a pro, not a con, because investors have all they need, ie valuation and momentum, on their side.

The pressure is mounting on Nikola ($NKLA), the latest hype in the EV stocks as the CEO resigned just days after Hindenburg Research released a report accusing the CEO of overstating claims on the readiness of Nikola’s technology and misinforming investors. After a fall of 42% in just one week the stock is still worth 7B$ with annual sales of 440k$: think about that for a moment. The stock is still up 88% YTD but has fallen 75% from the July high. I will keep staying away from it and have another EV stock on my watchlist.

Our portfolio was down this week, but not as much as the market. This is thanks to tech stocks like $GRUB, utility company $PCG and our latest purchase $DSV.CO, all up 3+%. $NEM was hit because of the sharp decline in the price of Gold. Both our banks stocks were affected by the weekly downturn. Overall, though, it is good to see our RI portfolio having beaten the market this week.

It looks like there is no going back to the previous normalcy, at least not in the near future given the rising number of Covid-19 cases globally, therefore shipping stocks are poised for further growth. On my watchlist I have $FDX which looks grossly undervalued based on future earnings estimates. It is up 57% YTD whereas competitor companies like $UPS and $DPW.DE are up 37% and 11%, respectively.

After months of depreciation relative to the euro, the dollar has been showing signs of strength: the EUR/USD is down from 1.18 to 1.16 and is now at the 138.2% Fib level from the March 11th relative high: will it rebound from here ? I periodically report on the the EUR/USD as our portfolio is calculated in USD and has a mix of stocks traded in USD, EUR or DKK, the latter being pegged to the EUR.

The table below summarises the portfolio performance since inception.

If you don’t want to miss my alerts, please subscribe to Responsible Investor or follow me on Twitter. I also run an eToro portfolio which currently has 35+ positions and can be accessed via this link.

Responsible Investor Portfolio Update, August 22th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $ELC.MI $WBD.MI

This is a market of contrasts. On the one hand we have increasing Covid-19 numbers all over the world and particularly in Europe where infection cases are going back to April-May levels, and on the other several bullish signals, the most recent one to note being the existing house sales in the US which grew by 25% in July – a rate not seen since 2006.

In the meantime the candidacies of Joe Biden and of his prospective VP Kamala Harris have been formalised at the Democratic Convention and the US stock market did not have a negative reaction. In the past there used to be many articles about how a Democratic government would be unwelcome for corporate America whereas positions seems to be more open to a leadership alternative to Trump of late.

It was a mixed week for the stock market: the MSCI World was flat, Europe was down 1.8% (with Italy loosing 2.42% and the Nasdaq Copenhagen a meager 0.12%) and the US indices were up with the S&P500 growing by 0.7% and the Nasdaq by a whopping 2.7%, whereas the Dow ended the week flat. The Dollar recovered about 0.58% over the Euro.

We have made one purchase on the RI portfolio this week, a relatively new ETF which invests in e-commerce while shorting the bricks & mortar sector. It is basically a combination of two other ETFs I have watched (and still own in another portfolio), $IBUY and $EMTY, and goes by the ticker of $CLIX. Thanks to its long and short positions it adds a lot of alpha to a signle investment: it is up 87% YTD, widely outperforming all the US stock market indices.

Our $SQQQ position hit the SL price at the beginning of the week but I expect that it is more of an arrivederci for this hedge. $TCEHY gapped 7% higher and looks like a break-out is around the corner. With gold recovering most of last week’s losses, $NEM was up 2.7%. On our watchlist we have stocks like $HUBS, $JD and $CSGP.

The table below summarises the portfolio performance since inception.

2000821 RIP

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Responsible Investor Portfolio Update, July 25th, 2020 | $TCEHY $NEM $BK $SYF $GILD $GRUB $SQQQ $SCO $PCG $LVMUY $LRLCY

I was on holidays for the last two weeks and while I took a break from the weekly blog, I kept an eye on the markets and even sent three buy alerts over this period. So much has happened within the span of a fortnight, from the worsening of the pandemic in the US, to the diplomatic tension between the US and China and the start of the earnings season. While the first two may offer an excuse for a correction, all eyes are on earnings which will be the reality check for this frothy market.

Two months have passed since the inception of the Responsible Investor Portfolio and we are still in the black with a total return of 1.9% (excluding dividends) whereas the market is up 1.3% (0.6% market beat).

The majority of our 18 portfolio positions are traded in European currencies whereas 43% is in USD. Over the last two weeks the USD has lost 4.4% vs the Euro and this impacts on our portfolio on which I report in USD.

We initiated a position in Tencent the week before last and also one in the Italian contractor WeBuild (previously trading as Salini). Following the approval of the EU Recovery Fund and a positive technical signal, I also sent a buy alert for an ETF which reproduces the price of a selection of European dividend stocks and is traded on the Italian stock market, EUDV.MI.

The table below summarises the portfolio performance since inception.

200724 RIP

If you don’t want to miss my alerts, please subscribe to Responsible Investor or follow me on Twitter. I also run an eToro portfolio which currently has 15+ positions and can be accessed via this link.

 

The consequences of #QE and the next #Eurozone #recession