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.

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Responsible Investor Portfolio Weekly Update, September 12th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI $NOW $QCOM $ZS

Happy Saturday from Copenhagen whose stock market continues to push higher. After a negative week, in the last 5 days the OMX index rose by 2.1% to levels now very close to all time highs. The European stock markets in general had a very good week, with the Stoxx index up 1.7% and the Italian FTSEMIB growing by 2.2%. As our portfolio consists in European stocks for 65%, it is not surprising that we have had a great week ourselves with a 2.3% increase versus a market performance of 0.4%.

The US stock markets were down, especially the Nasdaq which fell by 4%. The technology sector was the laggard and yet our two tech stocks, $GRUB and $TCEHY outperformed the Nasdaq which is a sign of their relative strength. After a long period which started in late March when it almost seemed that it didn’t matter which stock investors decided to buy we are now back to a market of stocks and picking the right one will be key.

There were several good news of our Italian stocks: Inwit and Raiway rose by 9.1 and 7.5%, respectively. On the automotive side, $UG.PA continues its rise: with this week’s 6.1% increase it is up 17% since my buy alert. Consumer discretionary also had a good week, especially in the luxury sector as the 3.4% weekly increase of $MC.PA demonstrated. It was a negative week for the bank sector and our two positions weren’t immune: it will be interesting to see if this downward trend continues in which case we will have to pull the plug.

I continue to like lots of candidate stocks to add to our portfolio, such as $NOW, $QCOM or $ZS but I would like to see the volatility reduce before we make our next buys. As always I will send a Buy Alert on this website and on Twitter if the time is right.

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, September 5th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $WBD.MI

At the beginning of the week the stock markets kept going higher as if there was no tomorrow but on Thursday they came to a screeching halt. More importantly, the Friday morning rally did not last long and the week ended with a second consecutive down day. I cannot even remember when we had two red days in a row last time !

While nobody knows what happens next, with the upcoming US presidential election and economies around the world still struggling to pick up, I cannot see governments stopping the support of the stock markets with more “propping” policies. Analysts are raising S&P500 quarterly earnings estimates for the first time since Q2 2018, Factset reports. Only time will tell and we will be quick in raising cash if the downtrend continues.

Despite the end of week selloff the Dow and the S&P500 managed to pull off a nominal increase of 0.24 and 0.16%, respectively, whereas the Nasdaq fell 1.6%. The European stock markets had a similar decline with the Stoxx down by 1.25%; the FTSEMIB retraced by 1.49% and the Copenhagen Nasdaq fell by 2.5%. The Danish stock market currently has a whopping P/E of 32.8 which is even higher than that of the S&P500 which stands at 30.5.

No changes to our portfolio this week. For the second week in a row our best performer was $SYF which is up 23.2% since we bought it and has now overtaken $GRUB. Car-maker UG.PA had a great week and was up 3.8%. Our other tech stock $TCEHY fell 4.7% but the fundamentals remain intact.

On my watchlist there are stocks like $VEEV, $QCOM and $GOOG. This recent selloff can present an opportunity for shopping at more reasonable prices.

The table below summarises the portfolio performance since inception.

Responsible Investor Portfolio Update, August 29th, 2020 | $TCEHY $NEM $BK $SYF $CLIX $GRUB $PCG $LVMUY $LRLCY $PEUGF $ELC.MI $WBD.MI

Just when one might have started thinking that the FED was running out of ideas to sustain the growth in the stock market, Jay Powell announced an unprecedented change to the inflation policy from 2% as a goal to 2% on average as the target. Not that inflation has gone up during years of balance sheet expansion, including in the EU, but it does provide more room should it pick up and pass the 2% mark. That news depreciated the dollar even further relative to the euro.

In more recent news, Japan was hit by the sad news of their long-standing Prime Minister Shinzo Abe announcing to step down due to illness after 8 years of service and one year before the natural end of his term. This exerted pressure on the Japanese stock market as it can be seen from the drop the $EWJ ETF had on Thursday. It will be interesting to see whether his successor will continue to embrace the so-called “Abenomics” and maintain the stability Abe achieved by ending a streak of several predecessors who only lasted 1 year on average as PMs of Japan.

The US stock markets have had an impressive week with the three main indices all closing 2%+ higher. Europe had a good week as the Stoxx index moved 1.1% higher but the national stock markets performance varied: for example Italy was up 0.7% while Denmark was down 0.3%.

No changes to our portfolio this week. Our best performer was $SYF which gapped 7.8% higher, followed by one of our two banks stocks, $BK, which grew by 5.1%. $GRUB fell 4.4%, however that’s not concerning given how much it has run over the past weeks.

On my watchlist there are stocks like $WDAY, $QCOM and inverse ETFs such as $SQQQ.

The table below summarises the portfolio performance since inception.

2000828 RIP

Responsible Investor Portfolio Update, August 15th, 2020 | $TCEHY $NEM $BK $SYF $GILD $GRUB $SQQQ $SCO $PCG $LVMUY $LRLCY $PEUGF $ELC.MI $WBD.MI

Another positive week for the global stock markets with Europe over-performing the US. The Italian stock market jumped almost 5% while the Stoxx index gapped 2.77% higher. The Dow and the S&P500 were up 2 and 1%, respectively. The Nasdaq was very quiet and closed marginally higher.

There are increasing calls from investment banks for a potential future over-performance of the Stoxx versus the US Stock Markets which have run a lot: YTD, the S&P500 is up 4.7% while the Stoxx index is down 10% and the FTSE MIB lags behind with a -13,82%. There are exceptions within Europe: for example the Danish stock market being up 15% YTD and currently has a P/E of 31. With our portfolio consisting of European stocks for 68% at present, we are geared to benefit from a possible mid-term rise of the European stocks.

We have had 3 winners this week as $SYF , WeBuild and Elica rose between 5% and 7%. This week’s sell off in gold has negatively impacted on $NEM , down 7%, however this precious metal is expected to rise further in the near future.

$TCEHY continues to be hit by anti-China US policies and, more recently, by the dispute between $AAPL and $GOOG vs Epic Games, the company behind popular video game Fortnite in which Tencent has a stake.

Two of our positions hit the SL price, namely $SCO and $GILD. For the latter it might have just been bad timing as the fundamentals and the valuation remains strong: we might get back in if the earnings continue to grow and the technicals suggest an entry point.

The table below summarises the portfolio performance since inception.

2000814 RIP

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Responsible Investor Portfolio Update, August 1st, 2020 | $TCEHY $NEM $BK $SYF $GILD $GRUB $SQQQ $SCO $PCG $LVMUY $LRLCY $WBD.MI $IMA.MI $ELC.MI

It is surprising how the global stock markets are capable of shrugging off just about any news headline recently. This week was no different. The pandemic keeps wreaking havoc in many developing countries and of course in the US as a second wave in Europe seems inevitable now. Check out these great graphs from the Financial Times.

On Wednesday the CEOs of the largest 4 tech companies, Apple, Amazon, Google and Facebook appeared before a US Congress Committee to be “grilled” on anti-trust accusations. You can’t say anyone of them lost their cool, really, and when the same companies all reported their Q2 earnings after the close the following day on the one hand it seemed that as if there is nothing to stop them from hoarding cash, and on the other it does reinforce the point of whether there is fair competition and reasonable profit.

The US markets were up this week, especially the Nasdaq, while the World Stocks Index was mostly flat. Italy saw a sharp decline, just shy of 5%, and the European stock markets in general were also down (Stoxx index fell by 2.6%). The other stock market we watch closely, the Nasdaq Copenhagen, was less badly hit with a 1.4% loss and continues to outperform most European stock markets.

We keep finding great investment opportunities in the Italian stock market. A classic rule when it comes to personal finance is to invest in what you know. This past week I have sent two new buy alerts, one for mid-cap in the Industrial sector called IMA (which is already up 14% since my buy alert) and another one for a Consumer Cyclical stock called Elica, both traded on the Italian stock market.

I am disappointed by the recent weakness in WeBuild which tanked 21% this week. This is a good example of why focusing only on valuation is not sufficient to pick (or deciding to stick with) a stock: if the market is against it, you won’t see it grow. With the 38.2% fib level broken, there is the risk of further depreciation. I will look into it more closely in due course and send an alert if I sell/reduce/accumulate.

WBD.MI_YahooFinanceChart

I realised that one of our SQQQ position was incorrectly reported despite the ETF having hit our SL price of 8.1$: apologies for the inconvenience.

So far we have not included dividends in the total return and I will endeavor to add this information in a future update as some of our stocks have already paid a quarterly dividend since the inception of the RI portfolio.

The table below summarises the portfolio performance since inception.

200731 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 20+ 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.

Has #volatility peaked ?

Has volatility peaked ? Difficult to say, what’s certain is that over the past 4 weeks the US markets have wiped out all the gains of the last 3 years, basically since Trump’s presidency started. Some say that coronavirus has only been the trigger of the neutralisation of a rally on steroids caused by liquidity injection and tax breaks, ie not of true #earnings growth. While more #liquidity is coming, it would appear that monetary policy alone is not going to be a sufficient cure for the market and that fiscal policy is also needed as well as an effective way to put an end to this biological crisis.

Intro over. So what can investors do in these difficult times ? Last week we talked about raising cash and inverse funds. The situation has not changed as volatility remains high although it has decreased from about 80 to about 60 this past week.

In the meantime, it helps looking at what the new earnings are saying. $ACN for example, a company on my watchlist, has beat expectations early this week but halved their revenue forecast. This company traditionally releases earning much earlier than most S&P companies, which are not due for a few more weeks.

Another interesting observation. The Norwegian krona has tanked and lost about 20% compared to the Euro in the past 20 days: that is a massive drop for a currency of a country with AAA rating ! #Norway has been seriously hit by the virus, is not part of the EU which prevents them from accessing the benefits of QE and is heavily reliant on $OIL which is down >50% over the past month. Not looking good for Norway, but is their currency a possible future investment opportunity when the situation stabilises ?

This week 3 of our long positions have hit the stop loss limit, namely $SYF, $RR.L and $OXY . It is very important not to let your losses run beyond 7 to 20%, depending on your risk profile and whether they are dividend payers or not, so it is advisable to insert suitable stop losses, thankfully this is function that works well on many trading platforms. I continue to watch $SYF closely as I think there will be a great buying opportunity in the not too distant future, whereas I think $RR.L will be under prolonged pressure due to their reliance from the aviation industry and $OXY won’t recover until $OIL rebounds unless they are taken over.

As always, be patient and invest responsibly !

Happy weekend to all.