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.