Portfolio Seven Updated November 2020

Portfolio seven is five years old.  The trustee contributed $6000 and the beneficiary contributed $3000 for a total of $9000.  The current value is $13,919 for a gain of $4,919 or 57%, which is 13% / year adjusted for the timing of cash flows.  Go to the link on the right or here to see the details.

Portfolio gains have been driven by Mastercard (MA), Alibaba (BABA), Taiwan Semiconductor Manufacturing (TSM) and PayPal (PYPL).  There are 10 stocks in the portfolio.  The other stocks are doing OK or it is too early to tell.

Portfolio Eight Updated November 2020

Portfolio Eight is 5 years old.  The beneficiary contributed $3000 and the trustee $6000 for a total of $9000.  The current value is $14,361 for a gain of $5,361 or 60%, which is 13.5% / year when adjusted for the timing of cash flows.  Go here or the link on the right to see details.

Performance has been driven by gains in Mastercard (MA), Nvidia (NVDA), Paypal (PYPL) and OKTA (OKTA).  There are a total of 10 stocks in the portfolio.  Generally the other stocks are performing adequately or it is too early to tell.

Portfolio Performance As of May 2020 and Replacement Stock Selections

The stock market has recovered almost all of the losses incurred with the pandemic.  From peak to trough (Feb 2020 to March 2020) we lost about 23% of our value.  Today, we are down about 7% from peak.  Our percentages do not completely align with the market because some portfolios hold up to 20% cash and some bond investments (BND ETF from Vanguard) and Gold (IAU ETF ticker).  This performance generally aligns with riding the market down and then back up again.Portfolio Performance May 10 2020

Whether by luck or design, our portfolios did not hold most of the industries that bore the brunt of the Covid impact, like airlines, hotels, and commodities. We did have some stocks that we recently sold in some of these hard hit areas.

I reviewed the rest of the portfolio and we are continually “pruning down” the list of stocks that we hold. There are about 30 stocks held across the portfolio right now, down from about 40 or so in the relatively recent past. This does not include ETF’s.

The stocks that have driven the most value in the portfolio that are not bought across all the portfolio (because every beneficiary selects individually) are:

  • Electronic Arts (EA) – videogames
  • Mastercard (MA) – electronic payments & credit cards
  • CME Group (CME) – financial services
  • Alibaba (BABA) – Chinese e-commerce giant
  • Nvida (NVDA) – semiconductors
  • OKTA (OKTA) – SAAS provider of security services
  • Paypal (PYPL) – electronic payments
  • Procter & Gamble (PG) – iconic brand company
  • Taiwan Semi-conductor (TSM) – semiconductors
  • Union Pacific (UNP) – Railways
  • Gold ETF (IAU) – tracks price of gold

If the portfolios that are selecting new stocks don’t currently own one of the stocks listed above, they may want to consider buying them.

New stocks for May 2020:

  • Carrier (CARR) – manufacture and sale of Heating and cooling systems (HVAC).  Recently spun out from a conglomerate
  • Facebook (FB) – owner of Facebook, Instagram, and WhatsApp seems to have recovered from past controversies
  • Cloudflare (NET) – security and edge networking has been growing with the crisis

Stocks To Pick:

Portfolio Four – select three stocks

Portfolio Five – select two stocks

Portfolio Six – select one stock

Portfolio Seven Updated December 2019

Portfolio seven is more than 4 years old.  The beneficiary contributed $2500 and the trustee $5000 for a total of $7500.  The current value is $10,526 for a gain of $3,026 or 40%, which is 11.5% / year when adjusted for the timing of cash flows.  See details here or at the link on the right.

Portfolio seven’s gains to date have mainly come from Mastercard the credit card company and Alibaba the Chinese e-commerce giant.

Portfolio Eight Updated December 2019

Portfolio 8 is a bit over 4 years old.  The beneficiary contributed $2500 and the trustee $5000 for a total of $7500.  The current value is $9,557 for a gain of $2,057 or 27%, or 8.2% / year when adjusted or the timing of cash flows.  You can see the summary here or at the link on the right.

The portfolio holds 9 stocks.  The biggest winner is Mastercard (MA) and the others have been doing OK.  General Motors (GM) and Baozun (BZUN) are down a bit overall.

Portfolio Eight Updated March 2016 – Tax Time

Portfolio 8 is half a year old.  The beneficiary contributed $500 and the trustee $1000 for a total of $1500.  The current value is $1341 for a loss of ($159) or negative (10.6%).

Portfolio 8 Updated March 2016

This portfolio consists of Mastercard (MA) and Tata Motors ADR (TTM).  Both stocks are down about 10% for the year so far.  Due to the fact that there are no sales and not much dividends (it has only been 6 months) there were no tax forms sent by the brokerage.

Portfolio Seven Updated March 2016 – Tax Time

Portfolio_7G_Mar_2016

Portfolio Seven is about half a year old.  The beneficiary invested $500 and the trustee $1000 for a total of $1500.  The current value of the portfolio is $1357, for a loss of ($143) or negative (9.5%).  Both Alibaba (BABA) and Mastercard (MA) have come down about 10% since purchased in the fall.

Due to the fact that there is only modest dividend and no sales in this portfolio we were not sent a tax return by the brokerage.

Stock Selections for 2015

Attached are the stock selections for 2015.  We are expanding the list slightly because most of the funds not only have new cash to invest for 2015 but we also did a recent round of selling that needs to be re-invested.

US Stocks

  1. Box (BOX) – $13, 52 week range $11-$24, $1.5B market cap, no dividend, little debt.  Box provides a cloud-based document storage and governance capability and is growing rapidly among Fortune 500 corporations
  2. Mastercard (MA) – $101, 52 week range $75-$101, $114B market cap, 0.7% yield, $1.5B debt.  Mastercard is a global credit card brand that benefits from the long-term migration of cash and checks to credit.  Their biggest competitor, Visa, recently announced a merger with Visa Europe which likely will distract that company for several years and give Mastercard an opportunity to pick up market share
  3. ConocoPhillips (COP) – $55, 52 week range $41-$74, $68B market cap, 6% yield, $25B debt.  ConocoPhillips is an oil and gas exploration company that is a major bet on future price rises for natural gas and oil with technical knowhow and efficient production.  They recently made major cuts in response to the commodity price collapse
  4. Union Pacific (UNP) – $86, 52 week range $79-$124, $73B market cap, 2.6% yield, $13B debt.  Union Pacific operates a massive US rail network and has been hit recently by reductions in the industrial and commodity economies.  However, they are highly efficient and represent a solid long term bet on industrial growth and recovery

Foreign Stocks

  1. Tata Motors (TTM) – $30, 52 week range $21-$51, $19B market cap, no dividend, $11B.  Tata Motors is an Indian based company that benefits from low costs and growth in the Indian car market and also owns Jaguar and Land Rover.  The stock will be down a bit early next week because they just released earnings and showed an unexpected loss due to a one time event
  2. China Eastern Airlines (CEA) – $30, 52 week range $20-$50, $8B market cap, no dividend, $6B debt.  China Eastern Airlines can benefit from the growth in outbound Chinese tourism and investment as well as potential government mandated consolidation in the airlines sector which could result in higher profits and reduced competition
  3. Alibaba (BABA) – $83, 52 week range $57-$120, $207B market cap, no dividend, $8B debt.  Alibaba is a major web commerce / mobile player in China.  Much of Yahoo’s value was based on an ownership stake in this entity (we recently sold off Yahoo)
  4. Novartis (NVS) – $89, 52 week range $88-$106, $214B market cap, 2.7% yield, $22B debt.  Novartis is a major Swiss based drug maker

Wildcards

This is a new section.  These are some riskier stocks either because of high prices or uncertain outcomes.

  1. Tesla (TSLA) – $232, 52 week range $181-$286, $30B market cap, no dividend, $2.6B debt.  Tesla is a maker of electric cars led by the charismatic Elon Musk.  Their valuation is very high considering that they lose money, gas prices are low which reduces the savings from electricity, and they deliver a fraction of the cars that a “major” automotive giant would.  On the other hand, their fan base is passionate and their design is praised
  2. Facebook (FB) – $107, 52 week range $72-$110, $301B market cap, no dividend, little debt.  Facebook is the ubiquitous social media presence with a huge and growing global and mobile footprint and messaging.  Their market cap has almost tripled since their IPO and are led by the charismatic Mark Zuckerberg
  3. Cheniere (LNG) – $46, 52 week range $43-$82, $11B market cap, no dividend, $16B debt.  Cheniere is a long term bet on liquified natural gas, which takes (relatively) cheap US gas and ships it to offshore countries seeking clean energy and diversified energy sources.  This is a risky but possible bet because the facilities are mostly built but yet to ship gas and prices are falling, but the long term upside is also large if they can survive and prosper