Q4 2024

Disclaimer

Nothing discussed/written should be considered as investment advice. Please do your own research or speak to a financial advisor before putting a dime of your money into these crazy markets. In other words, if you buy something I bought, you deserve to lose your money.

The only reason why I am making my portfolio public because it provides accountability to me. Some or all the analysis I provide could be from the top of my head and should not be considered accurate.

My investing goal is simple; to try to manage risk while being fully invested without market timing. Howard Marks said it best, “even though we can’t predict, we can prepare.”

All my references to the Market are only for the US Market.

Performance

For the year I returned 23.6% compared to 23.84% for the S&P 500 (without dividends reinvested). Most of the return was due to Berkshire Hathaway, British American Tobacco, Carriage Services and making some timely trades in early August.

The table below is a breakdown of my portfolio at the end of Q3. What you see below where my entire net worth, excluding my home, is allocated.

Portfolio Activity

I sold my Disney position for a 13.5% gain. I added my exposure to Glasshouse, Cronos Group, Grown Rogue and Etsy. Speaking of Etsy, they recently approved a new stock repurchasing program, which authorized the repurchase of up to 1 billion of stock, which is 18% of the company.

Two weeks ago Grown Rogue announced they are currently completing Phase II construction planning, expected to commence in Q1 2025, that is expected to increase production to more than 1,000 pounds per month of craft flower.

I opened a position in Occidental Petroleum (at about $46 per share). This is simply a pure trade and it will not be a long term holding. My thinking is the price I paid is 28% less than what Warren Buffett paid in the open market.

I opened starter positions in Alpha Metallurgical Resources (AMR) and Dollar General (DG). AMR intrigues me because of how much stock they’re buying back. DG intrigues me because I bought it at a price that’s 12% less than Seth Klarman.

I opened starter positions in two British UK small cap stocks: Foxtons Group and TruFin. Foxtons is one of Britain’s best-known real estate agents and its trading at a EV/sales of 0.9x. TruFin is an investment holding company where, I believe, the sum of the parts are vastly greater than the market cap.

Quotes & Charts

“You are under no obligation to remain the same person you were a year ago, a month ago, or even a day ago. You are here to create yourself, continuously.” ~Richard Feynman

“Few things are more persuasive than the opinion you desperately want or need to be true.” Source: https://collabfund.com/blog/rules-truths-beliefs/

Jeff Bezos on not under-estimating opportunity:

“I think it’s generally human nature to over-estimate risk and under-estimate opportunity. … The risks are probably not as big as you perceive and the opportunities may be bigger than you percieve.”

Napoleon Hill on not doing what the majority of people do when faced with temporary defeat:

“Before success comes in any person’s life, he is sure to meet with much temporary defeat, and, perhaps, some failure. When defeat overtakes a person, the easiest and most logical thing to do is to quit. That is exactly what the majority of people do.”

“As the US has gone from “uninvestible” at the beginning of this bull market to today’s “obvious trade,” its share of the global stock market has surged from 40% to 64% (Chart 6), pushing market concentration to unprecedented levels (Chart 7). The US is the most expensive it has ever been compared to the rest of the world, with the premium having gone from -11% (a discount) in 2009 to +60% today (Chart 8). But rather than take steps to mitigate this extreme portfolio concentration, it appears that investors are doubling down. According to Bank of America’s latest fund manager survey, institutional investors are overweight US stocks, but even more worrisome may be the concentration in smaller investor portfolios. According to a recent Wall Street Journal article citing Vanda Research, the average individual’s stock portfolio has 40% of its value tied up in just three tech stocks!

With all eyes on US large cap growth stocks and disinflation beneficiaries, we see bigger opportunities in international, small caps, value stocks and inflation beneficiaries.”

Source: https://caia.org/blog/2024/10/11/what-does-once-generation-investment-opportunity-look

Michael Jordan’s response when asked if a fear of failure motivated him:

“I never feared about my skills because I put in the work. Work ethic eliminates fear. So you if you do the work, what are you fearing? You know what you’re capable of and what you’re not.”

“The first takeaway is that if you are going to include an allocation to trend following, given the observation of a strong dispersion of annualized returns among CTAs, you should consider diversifying across multiple CTAs (or trend following strategies).” ~Laryy Swedroe

Source: https://alphaarchitect.com/2024/12/portfolio-efficiency/

Tax benefits of MLPs from Bill Gross https://williamhgross.com/somebody-stop-me/