Studies have shown the more you look at your portfolio the worse the results for the individual investor. That said, I’ve 5-7 books about the psychology of money so (hopefully) I avoid the pitfalls of cutting my flowers and watering my weeds. I believe it’s important for me to look at my portfolio every quarter to get an idea where my money is positioned.
Let’s get this out of the way. I am nowhere near where I think I should be knowledge wise. I’m still a complete noobie. (It goes without saying anything whatever I say/write is not financial advice…and if you buy something I bought, you deserve to lose your money.)
Even though no one will read this I am making my portfolio public because it provides accountability. All the analysis I provide is from the top of my head and should not be considered 100% accurate.
The table below is a breakdown of my portfolio on December 31, 2020 after the close.
| Company | % |
| MU | 15.2% |
| BRK.B | 11.4% |
| MKL | 7.5% |
| BAC | 7.2% |
| XOM | 4.3% |
| SPR | 3.8% |
| SCHW | 3.1% |
| MO | 2.9% |
| GAPFF | 2.4% |
| IWN | 1.9% |
| IWS | 1.5% |
| OGZPY | 1.4% |
| KGC | 1.3% |
| TAIL | 1.2% |
| DJCO | 1.2% |
| NEM | 1.1% |
| RZV | 0.9% |
| COP | 0.9% |
| BHF | 0.9% |
| DTLA | 0.8% |
| FRFHF | 0.8% |
| CVX | 0.7% |
| HII | 0.7% |
| NERD | 0.6% |
| GD | 0.6% |
| HERO | 0.6% |
| LMT | 0.6% |
| CTTOF | 0.5% |
| NOC | 0.5% |
| RTX | 0.4% |
| FFXXF | 0.4% |
| BXMT | 0.4% |
| FPI | 0.0% |
| LAND | 0.0% |
| SMIT | 0.0% |
| ECH | 0.5% |
| EPOL | 0.9% |
| ERUS | 1.4% |
| EWP | 0.2% |
| EWS | 0.5% |
| TUR | 0.5% |
| EWUS | 0.1% |
| GVAL | 1.7% |
| FNDC | 1.1% |
| EWY | 1.4% |
| FNDE | 0.6% |
| AVDV | 0.8% |
| ICOL | 1.1% |
| Bitcoin | 2.3% |
| Gold | 3.9% |
| Platnium | 1.1% |
| Farmland | 3.7% |
Below is a breakdown by category:
| Row Labels | Sum of % |
| Aviation | 3.8% |
| Bitcoin | 2.3% |
| Conglomerate | 11.4% |
| Defense | 2.9% |
| eSports | 1.3% |
| Financials | 11.2% |
| Insurance | 8.2% |
| International | 14.3% |
| Mid Cap Value | 1.5% |
| Oil | 7.4% |
| Other | 2.9% |
| Precious Metals | 7.4% |
| Real Estate | 5.0% |
| SaaS | 1.2% |
| Semiconductor | 15.2% |
| Small Cap Value | 2.8% |
| Volatility | 1.2% |
Notes
For the year I am up 21.3%, which is quite remarkable considering I was long Boeing (BA) and Brookfield Property Partners (BPY) entering the year. Warren Buffett averaged 20% for decades so I at least got to have one year of Buffett-like returns. Ha. In all seriousness I think my returns were mostly generated because I didn’t have any fear in March. I literally could not sleep at night because I was so anxious to buy stocks. Entering 2020 I was about 50% cash. I had so much cash because this is only my third year as an investor and I didn’t see a lot of stuff that was cheap. I deployed about 60-65% of my cash in March/early April. I stopped buying as the Market climbed because I thought it was Bear Market Rally and I thought I would be able to buy more. I did spend the rest of my cash in June so I give myself credit for recognizing the Fed Put and buying in March. TLDR: I honestly believe my performance was mostly due to buying in March.
I have intentionally chosen to not learn about derivatives. I know what Call and Put Options are and that’s it. I’ve heard too many horror stories of people blowing up because of derivatives and I have issues being patient so I am intentionally ignorant. I put on a small position (in my Roth IRA) in TAIL from Cambria. They buy laddered puts and it gives me some insurance. I know how expensive the US Market is but I think the odds are less than 10% that we get a 20% or more drawdown in 2020. This Market will collapse eventually but I don’t know when. I think once Tesla begins to crash is when the Market as a whole tanks.
I bought Cinemark (CNK) in my IRA during Q4. I made a 1-2% bet because A) the company could survive a year with empty seats and B) the movie business would come back to pre-2020 levels. When the vaccines were announced I got a 90% gain and I exited the position because there were other stocks I wanted to buy. If the stock was in my PA I would still own CNK.
I doubled down on Energy this past quarter. I bought Exxon (XOM) in January thinking A) there wasn’t much downside, B) if oil prices positively regressed there was good upside and C) I could get a solid dividend in my Roth IRA. I knew their balance sheet was shit but I thought overtime it would get repaired even if oil prices were $60 a barrel. Well, I was completely wrong. I could have added to my position in March but was I adding to other positions and honestly, I wasn’t mentally prepared to double down on my bet. At the end of October I was given another chance to buy and I doubled down on the sector buying mostly Exxon and adding small positions to COP and CVX. Also, I think Gazprom is extremely cheap. Is it possible they get taken over by Putin? Yes, but at three times normalized earnings you’re getting compensated for the risk.
I had a big position in Boeing (BA) to begin the year and I got pwned. But I didn’t let that drawdown affect my ability to evaluate Spirit AeroSystems (SPR). This is one of the many companies I bought in March. I had a friend of a friend tell me that SPR and BA are joined at the hip so my job was to evaluate if SPR had enough liquidity to get through the pandemic.
My average buy price of Bitcoin is $9,800. I read an article in Meb Faber’s “The Best Investment Writing Volume 2: Selected Writing from Leading Investors and Authors” and it discussed Bitcoin in great detail and I decided it was worth a 1% allocation. I have no idea where the price will go but after my research into mania’s I find it hard to believe will not succumb to a big drawdown. I think once Tesla’s stock crashes is when Bitcoin crashes. In the long term I think crypto is not going away.
I bought Kinross (KGC) and Newmont (NEM) because they have best combination of good balance sheets and good management. I have no idea if inflation will come but I want to be hedged.
I’ve been buying a basket of Defense companies: HII, GD, RTX, LMT and NOC. The business are okay and they’re trading at okay prices but we’re in Cold War II and I don’t know which company will get the next big contract(s) in the future but if things aren’t entirely pleasant in the world I want to have exposure beforehand.
Brookfield DTLA Fund (DTLA) is preferred stock outstanding with a cumulative preferred. That means that if they skip a dividend payment they have to pay it in the furture. The stock owes about $19-20 in dividends and the par value is $25 which means the stock is worth $44-45. I made a 1% bet and I’m not adding to it.
I began the year buying ETFs of cheap countries (such as ERUS and EPOL) but I’ve been allocating more money to Value International ETFs. Specifically, Emerging Markets. Every month GMO publishes its 7 year asset forecast and they keep showing Emerging Markets are the only sector that will have positive returns. That’s why you see GVAL, FNDC, FNDE and AVDV in my portfolio now. I prefer GVAL the most of the four. As time goes on more money will be allocated there.
The Rational Walk wrote a great piece about how you can safely get a 3.5% yield from the US Government via Series EE Savings Bonds. In order to get 3.5% annualized you have to buy the bonds and hold them for 20 years. If you do that the government will give you double your money. If you hold for less than 20 years you only get 0.1%.
I think I said this in my last update but I didn’t think I would be this diversified. Part of me wishes I had less companies but I don’t want to get my face ripped off and get taken out of the game.
Enough rambling. I hope everyone has a great 2021!
