Portfolio Three as of October 2021

Portfolio three is 14 years old.  The beneficiary contributed $7500 and the trustee $15,200 for a total of $22,700.  The current value is $37,246 for a gain of $14,546 which is 64% or 6% / year adjusted for the timing of cash flows.  Go to the link on the right or here for details.

The portfolio consists of three US market ETF’s – Mega, Growth and Total market.  The portfolio Is almost totally invested, with just 3% in cash.

Portfolio Two Updated October 2021

Portfolio Two is seventeen years old.  The beneficiary contributed $27,000 and the trustee $18,200 for a total of $45,200.  The current value is $79,546 for a gain of $34,346 or 76%, which is 7.6% / year adjusted for the timing of cash flows.  For details go here or to the link on the right.

The portfolio is generally doing well.  There is a core of ETF’s and some individual stocks.  Cloudflare (NET) has been doing well and the others mostly purchased recently.  Alibaba (BABA) is up from recent very low prices caused by Chinese politics and a deferral of the Ant IPO, but we are holding on for now.

This portfolio has over $20,000 in cash and the total bond fund (BND) ETF which reduces risk but also reduces total return opportunities.  1/4 of the fund is invested in cash or low risk equivalents rather than equities. 

Portfolio One Updated October 2021

Portfolio One is our longest lived portfolio.  It is 20 years old.  The trustee contributed $20,000 and the beneficiary $10,000 for a total of $30,000.  The current value is $98,262 for a gain of $68,262 which is 227% or 9.7% / year when adjusted for the timing of cash flows.  Go here for a summary or to the link on the right.

There was a stock split since the last update – Nvidia (NVDA) split 4/1. When that occurs you need to adjust the purchase price accordingly. We purchased 5 new stocks for the account so it is almost entirely invested (less than 2% is in cash). The portfolio is generally doing well, with large positions in Taiwan Semiconductor (TSM) and Paypal (PYPL) along with 23 other stocks. There are a couple stocks on watch, notably Alibaba (BABA) tied to the Chinese crackdown and Rocket Mortgage (RKT) which was briefly part of the Meme stock frenzy.

While many recent stock purchases don’t pay much in the way of dividends, over the 20 years of this portfolio, almost $10,000 of the total return is in dividends. This is a big reason why I create these offline tracking sheets, so that you can see the impact of dividends on the portfolio.

Remaining Stock Selections

We have some outstanding investments to consider for 2021.

Portfolio Five

There are stocks in this portfolio to strongly consider selling.

  • SUMO – while the SAAS / analytics sector has seen strong performance, SUMO has performed poorly.  This is a stock to strongly consider selling
  • Baozun (BZUN) – Baozun is a Chinese e-commerce enablement company.  Whether due to China market / regulatory challenges or company growth, it is time to sell this stock
  • Alibaba (BABA) – Alibaba has gone down significantly.  Unlike the other stocks on this sell list, I think Alibaba has a very large and important business for the long term, as a leading cloud platform / e-commerce platform.  They also own a valuable financial business.  Can keep or sell

There will be up to $10k – $11k to invest depending on the sales up above (there was $9k in the cash account due to our selling of Appian (APPN) earlier this year when it hit a brief peak).  This could be 5 or 6 stocks depending on the size, or a stock with a double purchase.

  • Tesla (TSLA) and / or Toyota (TM) – the best run / most profitable companies in the space are Tesla on the electric car space and Toyota on the gas / electric combination play.  While almost all other car makers in the world are betting almost solely on electric cars with the next generation moves, Toyota continues to believe in a future for gas powered vehicles which makes sense because it will be decades or longer before a reliable electric infrastructure girds the globe (think Africa / Asia, for instance)
  • Pinduoduo (PDD) – the Chinese stock market has been pummeled with regulatory changes and cold-war rhetoric.  This may also be an opportunity to buy a valuable and innovative e-commerce company at a discount
  • Rocket Mortgage (RKT) – Rocket was briefly a target of a meme-stock rally and then fell but this obscures that this is a “real” company with a 7% dividend and a solid position in the US mortgage market.  This may be a long term stock to buy at a decent down price
  • Kraft-Heinz (KHC) – Kraft-Heinz fell and had a significant write off.  The company is well run and has a new plan and solid dividend.  They provide essential food staples around the world
  • Taiwan Semiconductor Manufacturing (TSM) – this stock is an essential company in the middle of a global chip shortage but also tied to bellicose behavior from China.  May be an opportunity to purchase it at a discount
  • Nike (NKE) – the global footwear leader just released earnings and said that the global supply chain difficulties would hit revenues temporarily.  Seems like an opportunity to buy a solid company at a discount
  • Uber (UBER) – the ride sharing company had missteps in the past but has changed management and is well positioned to go on a big run of earnings as the economy opens up
  • Square (SQ) – a well run and very interesting company in the financial space that is also moving into deferred payments (essentially loans) and bitcoin

Portfolio Seven:

There are stocks in this portfolio to strongly consider selling.

  • SUMO – while the SAAS / analytics sector has seen strong performance, SUMO has performed poorly.  This is a stock to strongly consider selling
  • Baozun (BZUN) – Baozun is a Chinese e-commerce enablement company.  Whether due to China market / regulatory challenges or company growth, it is time to sell this stock
  • Alibaba (BABA) – Alibaba has gone down significantly.  Unlike the other stocks on this sell list, I think Alibaba has a very large and important business for the long term, as a leading cloud platform / e-commerce platform.  They also own a valuable financial business.  Can keep or sell

If these stocks were sold there would be funds available for 3 purchases.  Here are some ideas:

  • Nike (NKE) – the global footwear leader just released earnings and said that the global supply chain difficulties would hit revenues temporarily.  Seems like an opportunity to buy a solid company at a discount
  • Tesla (TSLA) and / or Toyota (TM) – the best run / most profitable companies in the space are Tesla on the electric car space and Toyota on the gas / electric combination play.  While almost all other car makers in the world are betting almost solely on electric cars with the next generation moves, Toyota continues to believe in a future for gas powered vehicles which makes sense because it will be decades or longer before a reliable electric infrastructure girds the globe (think Africa / Asia, for instance)
  • Uber (UBER) – the ride sharing company had missteps in the past but has changed management and is well positioned to go on a big run of earnings as the economy opens up
  • Square (SQ) – a well run and very interesting company in the financial space that is also moving into deferred payments (essentially loans) and bitcoin
  • Chevron (CX) – a fuels company that is well run and has taken over the lead company in this space from Exxon Mobil (XOM)
  • L’Oreal (LRLCY) – the French cosmetics firm has a global footprint and has really embraced digital and modern methods during the pandemic

Portfolio Eight:

There are stocks in this portfolio to strongly consider selling.

  • SUMO – while the SAAS / analytics sector has seen strong performance, SUMO has performed poorly.  This is a stock to strongly consider selling
  • Baozun (BZUN) – Baozun is a Chinese e-commerce enablement company.  Whether due to China market / regulatory challenges or company growth, it is time to sell this stock

If these stocks were sold there would be funds available for 2 purchases.  Here are some ideas:

  • Nike (NKE) – the global footwear leader just released earnings and said that the global supply chain difficulties would hit revenues temporarily.  Seems like an opportunity to buy a solid company at a discount
  • Square (SQ) – a well run and very interesting company in the financial space that is also moving into deferred payments (essentially loans) and bitcoin
  • Chevron (CX) – a fuels company that is well run and has taken over the lead company in this space from Exxon Mobil (XOM)
  • Pinduoduo (PDD) – the Chinese stock market has been pummeled with regulatory changes and cold-war rhetoric.  This may also be an opportunity to buy a valuable and innovative e-commerce company at a discount
  • L’Oreal (LRLCY) – the French cosmetics firm has a global footprint and has really embraced digital and modern methods during the pandemic
  • Uber (UBER) – the ride sharing company had missteps in the past but has changed management and is well positioned to go on a big run of earnings as the economy opens up

Stock Performance September 2021

Stock Performance September 2021
Stock Performance September 2021

Over about the last 6 months, net of $30,000 in contributions from the trustee and the beneficiaries (some beneficiaries are making additional contributions beyond the normal $1500 / year), the funds in total have gone up by approximately 5% annualized. Net of cash and cash-like instruments (which reduce money in equities), we have returned about 6-7% annualized.

The indexes in the US on the other hand have gone up by between 10-15% annualized, depending on what you are looking at (S&P, NASDAQ, MGK performance, etc…). One of the reasons for our different performance is that we have a decent basket of foreign stocks, including some Chinese stocks which have gone down about 40% during the last 6 months (some of which have already been sold).

Since we are looking at the long term, we’ve historically selected a mix of US and foreign stocks. Foreign economies make up a majority of the worlds’ GDP, but US stocks have turned out to be the best bet recently for a variety of reasons. Chinese stocks, for instance, were hit by changes in government policies. We will continue to monitor the mix and the options for investments.

Stock Investing for Summer, 2021

I usually wait until a bit later but since there is some money on the sidelines anyways and I’ve made some stock recommendations (see here), it makes sense just to do this all right now.

This year we’ve moved 4 of the accounts (2-5) from UTMA to where they are owned by the beneficiary but the (former) trustee has “limited” agency power to see the data and make trades, but can’t move money in or out of the account.

This makes investing slightly more complicated in that I need to send the money to the beneficiary and THEY need to send it on to the investing account. I can no longer move money directly from my account to their account (due to the limited agency rules).

Portfolio Eight Updated July 2021

Portfolio eight is almost six years old.  The beneficiary contributed $3000 and the trustee $6000 for a total of $9000.   The current value is $17,408 for a gain of $8,408 or 93% which is 19% / year adjusted for the timing of cash flows.  Go here for details or to the link on the right.

We are watching Baozun may sell due to China headwinds even though they seem to be a good company.

Portfolio Seven Updated July 2021

Portfolio seven is almost six years old.  The beneficiary contributed $3000 and the trustee $6000 for a total of $9000.  The current value is $15,466 for a gain of $6,466 or 71%, which is 15.7% / year adjusted for the timing of cash flows.  Go here for details or to the link on the right.

The portfolio is doing well overall but we are looking at Alibaba (BABA) which is a giant company doing well but buffered by changing regulations in China, and Baozun the e-commerce enablement firm in China as well.  Will look at plans and may consider selling them.

Portfolio Six Updated July 2021

Portfolio six is almost 9 years old.  The beneficiary contributed $4500 and the trustee $9000 for a total of $13,500.  The current value is $24,154 for a gain of $10,654 or 78%, which is 11.5% / year adjusted for the timing of cash flows.  Go here for details or to the link on the right.

The stocks are generally doing well and no action is needed at this time.

Portfolio Four Updated July 2021

Portfolio four is almost 12 years old.  The beneficiary contributed $6000 and the trustee $12,000 for a total of $18,000.  The current value is $38,597 for a gain of $20,597 or 114%, which is 11.3% / year adjusted for the timing of cash flows.  Go here for the details or to the link on the right.

Like the other portfolios that moved to the agency model recently, the brokerage switched to paying dividends in fractional shares which caused a book keeping headache and I’ve switched back (it doesn’t impact value).  The portfolio has done well and currently doesn’t have much cash on hand.

Portfolio Five Updated July 2021

Portfolio Five is almost 12 years old.  The beneficiary contributed $6000 and the trustee $12,000 for a total of $18,000.  The current value is $38,767 for a gain of $20,767 or 115%, which is 11.4% / year adjusted for the timing of cash flows.  You can see the details here or at the link on the right.

The stocks in the portfolio are generally doing well.  Alibaba and Baozun have been hit with headwinds out of China.  Right now there is $7,452 in cash, mostly from the sale of Appian (APPN), which rose quickly and we sold and have not yet reinvested the funds.

It is minor and doesn’t impact value but we moved these portfolios from UTMA to owned by the beneficiary and the provider flipped all the individual stocks to reinvest dividends so now we have a lot of fractional shares.  I turned that off and it is minor in the grand scheme but an annoyance because I work here to tie out to the penny.

Portfolio Three Updated July 2021

Portfolio three is 14 years old.  The beneficiary contributed $7000 and the trustee $14,200 for a total of $21,200.  The current value is $34,524 for a gain of $13,324 or 63%, which is 6.3% / year adjusted for the timing of cash flows.  You can see the detail here or at the link on the right.

The portfolio is ETF based.  We recently moved from UTMA to self-managed with agency and the dividends came in the form of incremental shares rather than cash so we had to adjust the shares, and there was a reverse split for gold (IAU).  These are minor changes in the grand scheme, but since I tie out to the penny, it is annoying.  I recently changed the ETF’s to not re-invest, which works out since we aggregate dividends and re-invest with new contributions regularly.  The portfolio is 34% Bonds / Cash / Gold which reduces risk but also returns in times when the markets have been rising such as the post March 2020 market scare.

Portfolio Two Updated July 2021

Portfolio two is almost 17 years old.  The beneficiary contributed $13,000 and the trustee $17,200 for a total of $30,200.  The current value is $61,439 for a gain of $31,239 or 103%, which is 8.2% / year adjusted for the timing of cash flows.  Go here or to the link on the right for more detail.

The portfolio is doing well overall, with mostly ETF’s and some single name stocks.  BABA is one of the single name stocks that has hit trouble recently with Chinese regulation, but it is a good long term holding.  The portfolio has 23% of assets in  cash, bonds, & gold which reduces risk but also has held down returns that have risen recently after the March 2020 markets scare.

Portfolio One Updated July 2021

Portfolio One is our longest lived portfolio, at almost 20 years.  We started this portfolio the day after 9/11/01 (a significant day in hindsight).

The value is $91,424 and the beneficiary invested $5000 and the trustee $19,000 for a total of $24,000.  Gains are $67,424 or 280%, which averages out to 10.4% / year adjusted for the timing of cash flows.  Go here for a summary or to the link on the right.

In March we sold half our position in Rocket Mortgage (RKT) when it was part of the “meme” stock frenzy.  The stock has returned to what we paid for it originally plus paid a dividend.  We also had a reverse split for IAU gold shares (rare, it actually makes the price higher) and received a small amount of cash for our fractional half share (not a dividend, a return of capital, but very small).

The stocks in the portfolio are generally doing well, along with the market overall.