Responsible Investor Portfolio Weekly Update, October 24th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI $DSV.CO $DANSKE.CO $BRK $UMC $AAPL $JD $ADSK $BYDDF

The global markets were down this week, especially the European indices which are battling with rising covid-19 cases. The Italian stock market distinguished itself from the others thanks to Moody’s upgrading its outlook from negative to stable while maintaining the rating unchanged at BBB: the FTSEMIB recovered on Friday and finished the week with a 0.7% loss while the Stoxx was down 1.7%. The Danish stock market fell as much as 2.9% as the country saw the Rt growing again, effectively reversing the trend which was initially showing a containment of the second wave: despite this week’s fall, investing in the Danish stock market has been rewarding so far in 2020 as the Copenhagen OMX25 is up 22% YTD.

The US stock market indices were also down this week. Interestingly, the three main indices (Dow Jones, SP500 and Nasdaq) were mostly in sync in the first three trading days of the week, as if they were in waiting mode for the last US presidential debate which polarised the attention of the media and of the world on Wednesday night. While the debate was not as balanced as the ad by the two contenders of the Utah state, it did seems like a decent confrontation between Trump and Biden, especially compared to the first one. The last two trading days of the week, however saw the SP500 recover some of the losses and finish with a 0.4% decline while the Dow and the Nasdaq fell 0.85 and 0.9%, respectively.

$SYF beat earnings on Tuesday and announced a multi-year extension of the financing and credit card relationship with $WMT and Sam’s Club. It also declared a $0.22/share quarterly dividend which corresponds to an annual forward yield of 3.27%. The stock goes ex-dividend on October 30th and the dividend is payable on November 12th. Next week $NEM, $DSV.CO, $GRUB and $PCG will report earnings.

You will remember that we had reduced our $GRUB position last week: the stock is down 2.5% since then, so it was good call. I will be watching its price action to determine whether the time is right to exit the rest of our position. As stock prices follow earnings and earnings expectations it will be critical to see what results the company reports this coming Tuesday for Q3.

Last week we talked about three stock on our watchlist which can benefit from the (post-)pandemic world. Those still apply but again I don’t like the volatility levels and the nearing US presidential election date won’t help in the short term. This week I would like to add a couple to our watchlist: the first one is an EV play, BYD Company Ltd (ticker: $BYDDF), and the other is a semiconductor stock, $UMC, out of Taiwan.

Our Responsible Investor portfolio was down 0.8% this week whereas the market was 0.9% lower which means that we have beaten the market again, however marginally.

The table below summarises the portfolio performance since inception.

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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.

$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

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 10+ positions and can be accessed via this link.