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.

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Responsible Investor Portfolio Weekly Update, September 19th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI $NOW $QCOM $DQ $DPW.DE $AMWL $SNOW

This past week was better that it might seem for the stock markets which were affected by the weakness in the technology sector. Because of the relative weight of the FAANG stocks the performance of main indices was dragged down by their underperformance. The Nasdaq and the S&P500 were down 0.6% and 0.7%, respectively, while the Dow, which does not feature as many tech stocks as the two other main US indices, was basically flat.

One can be amused by the IPO frenzy that is roaming the markets of late, suffice to consider this week’s debut of $SNOW, but should thread very carefully when investing in them. Most of the time these stocks are very volatile and their track record is either not there, or comes from quarters preceding the IPO in which the company did not have to follow the stringent reporting requirements set by the SEC: be careful out there, and invest responsibly !

In the meantime many headlines keep the market volatile, from the premature death of US Supreme Court Judge Ruth Bader Ginsburg (suggest you listen to Michael Moore’s latest Rumble podcast) to Democratic-party nominee Joe Biden desperately seeking latino votes in swing states and the rising number of Covid-19 cases globally which is causing another round of lockdowns in some European countries. Despite this, the European Stoxx index was up 0.3% this week, while Italy’s stock market lagged behind, and was down 1.5%.

No purchases this week for our RI portfolio but I am itching for new buys! I just don’t trust the environment at the minute and especially these volatility levels. Patience is a virtue and that’s especially true for responsible investors. On my watchlist are stocks like $DQ (energy), $DPW.DE (courier services), and $AMWL (telemedicine).

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 30+ 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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$NEM $BK $SYF $GILD $GRUB $SQQQ $SCO $PCG $LVMUY $LRLCY| Responsible Investor Portfolio Update, July 4th, 2020

Q2 ended with a bang and Q3 started on a positive note. All major markets were up this week as the sentiment continues to be positive despite the concerning news about C-19 in the US and other non-European countries. Note the typical behaviour of the “momo crowd” erroneously reading certain news like the jump in new jobs in the US which however reflects events which occurred in the past rather than focussing on the future like “smart money” does.

Once again the US markets gapped higher, led by the Nasdaq (+4.6% weekly gain), while Europe lagged behind whilst delivering a gain, with the Italian stock market staging at 3.2% gain (#Stoxx +2.0% and #OMXC20 1.8%). Note however that most European indices have a lot more room to recover compared to the US stock market and this may affect the relative weight of our positions going forward. The Copenhagen stock market is up 10%+ YTD and its valuation is getting expensive.

Gold has passed a key resistance level and opened the opportunity for further appreciation: our position on $NEM enabled us to benefit from this move.

Our RI Portfolio was positive this week (+0,6%) but its growth was muted compared to the tracked stock markets because the hedges dragged it down. The markets are so buoyant and the valuations so high that I did not want to sell the hedges as things may change direction after the 4th of July weekend.

Five weeks after initiation we are showing a positive total return of 2.0% beating the Market by 0.6%.

No alerts this week ! I know it is nice to receive them but timing is also important.

This week’s winners in our RI Portfolio were both from Europe: Danske Bank (+6,4% gain) and Inwit (+5,7% gain).

No relative changes between the three currencies of the RI Portfolio.

We now have 15 open positions, 2 of which are leveraged hedges (inverse ETFs). Even in times of high valuations I keep finding cheap stocks and a possible further drop of the markets next week may offer an opportunity to initiate new positions.

The table below summarises the portfolio performance since inception.

2000703 RIP

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$BK $SYF $GILD $GRUB $SQQQ $SCO $PCG | Responsible Investor Portfolio Update, June 13th, 2020

Two weeks in, the Responsible Investor Portfolio is up 2.5% while the markets are only up 0.6%: that’s a +1.9% outperformance. As the RI Portfolio has stocks traded over multiple markets, the market performance is calculated as a weighted average.

This past week was particularly volatile and saw a sharp decline in the stock markets on Thursday 11th of June: that day the RI Portfolio was actually up, you can read the details in a previous post. This week’s outperformance is particularly significant as the markets were down 4.9% while our portfolio only lost 0.4% (+4.4.%).

We have made 3 trades this week: we sold CELL.MI for a 7.8% profit and bought $GRUB following rumours about a takeover from JustEat after Uber’s bid hit the wall. So far Grubhub is up 6.9%. The other trade is a hedge on oil.

The relevant currencies (USD, EUR and DKK) were neutral and therefore had no impact on the portfolio.

We now have 10 open positions, 2 of which we intend to keep on a short leash as they are leveraged hedges. There is still a long way to go to achieve a complete portfolio which requires several additional positions as well as a greater diversification across the various sectors.

200612 RIP

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$GRUB $SCO $SQQQ : was your portfolio up on Thursday June 11th ?

The markets were way overbought and last Wednesday I decided to add a couple of hedges, namely $SCO (a double inverse ETF on oil) and $SQQQ (a triple inverse ETF on the Nasdaq). The relative weight of these positions meant that as the US markets tanked about 5% on Thursday the 11th of June, my Responsible Investor portfolio was up. Only a little, but green.

Photo 12-06-2020, 08.22.10

If on average over the mid to long term the markets go up, and you beat them, you should do well with your investments.

Enjoy the weekend !

stock-photo-hedging-abstract-hand-writing-word-to-represent-the-meaning-of-financial-word-as-concept-the-560758789

$SQQQ as a hedge proved to be a winner

Over the past two weeks the market has been quite choppy, especially intraday, but overall it has continued to hold. In fact, the Nasdaq has gained 4.4% and the S&P500 1.1% while the Dow was basically flat at -0.2%.

The difference in performance can be explained by the stocks which compose these indices, with the Nasdaq obviously being packed with many technology stocks which have been outperforming most indices. To give a couple of examples, one of the technology ETF $XLK is up 5.1% this past two weeks, and the so called FAANG stocks are all above 4% with $NFLX up 9.4%.

The relative lack of technology stocks in the European indices, which are dragged down by many bank stocks ($XLF), is the main reason why the European stock markets have been laggards. The financial sector was already suffering from the dovish monetary policies of various areas of the world, with negative interest rates in Japan and Europe for example. The pandemic has only increased their pain as money printing continued everywhere, including the US.

Some say that March 23rd is when the markets bottomed: since then the 3 main US indices have recovered a lot of the previous losses due to the pandemic crisis with a gain ranging between 27 and 31%, while the European stock market has only rebounded by 14%. When they say that it is a market of stocks rather than a stock market, what they mean is that you have to pick the right indices if you want to invest in ETFs, or the right stocks if you want to have more chances of beating the market.

Here are my top 3 winners for these past two weeks:

$SQQQ +6.96% (this is a hedge)

$AMAT +5.07%

$BMY +4.51%

The earnings seasons is not over but its pace is certainly slowing down with a lot fewer companies reporting earnings next week: the one I will be watching most closely is $BABA on Friday.

If you want to see which stocks, ETFs and currencies I own in my eToro portfolio, please follow this link.

Have a great weekend everybody and invest responsibly !