Stock Selections Completed, SNAP and the Summer Bull Market

We recently completed our stock buying for the fall of 2017.  We do the stock buying and matching in the fall so that beneficiaries can have the summer to make some money in order to do the match.

It is interesting that of the 6 stocks (and one ETF, IAU or gold) on the list, no one took Snapchat (SNAP).  This is interesting because while it is popular with many of the beneficiaries (they use it), they can segregate whether something is useful or whether it may be a good investment. I had Snapchat on the list because I felt that it had been beaten down by bad sentiment and poor results and because it was burning cash BUT that this also created the opportunity for a turn upward (may be at the bottom).  In the past I’ve been hesitant to put up stocks that are tied to products that the beneficiaries may use day to day because I didn’t want that to bias the selection process but it turns out I was wrong.

With Google Sheets it is much easier to track the portfolio real time.  I have a summary sheet set up like the picture in this post and I can just glance at it on my phone from the google sheets app.  I take snapshots of the values in each portfolio every month or so in order to see simple trends over time.

You can see our summer bull market in the results, although you need to mentally factor out the impact of $11,700 in contributions and $6000 in withdrawals across the period (net inflows of $5700).  Thus based on some simple math above, across the portfolio we saw an increase of $154,073 – $136,791 = $17,282 and then you take out the net inflows of $5700 to get a net increase of $11,582 divided by our base of $136,791 from about 6 months ago which is 8.4% and if you roughly double it (to get annual performance) you see annualized performance of roughly 17% in the portfolio during essentially the summer and most of the fall of 2017.

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Stock Selections for 2017

Below are our stock selections for 2017:

US Stocks

  1. Appian (APPN) – $24, 52 week range $17-$27, $1B market cap, no dividend, almost no debt.  Appian is an internet software company that provides automation software for corporate customers.  Well run and growing fast, went public recently and has done well since the IPO

2. Nvidia Corporation (NVDA) – $179, 52 week range $63-$191, $107B market cap, almost no dividend, $4B debt.  Nvidia makes chips for games and graphics cards and these chips are also being used for AI and machine learning use cases.

3. General Motors (GM) – $42, 52 week range $30-$42, $61B market cap, 3.8% yield, $55B debt.  GM is an iconic, global auto manufacturer with strong worldwide presence including China and has invested heavily in electric car technology.  Non US sales total 58% of volume (but a smaller percentage of profits).

4. Snapchat (SNAP) – $15, 52 week range $11-$29, $18B market cap, no dividend, no debt.  Snapchat went public and recently has lost almost half its value.  The company has over $2B in cash but is running a large loss due to operational expenses and acquisitions.  However, it is still strong in market and mind share and could also be an acquisition candidate for the right price

International Stocks

5. Baozun (BZUN) – $36, 52 week range $11-$41, $2B market cap, no dividend, little debt.  Baozun is a Chinese e-commerce provider for many major companies.

6. ABB (ABB) – $25, 52 week range $20-$25, $54B market cap, 3% yield, $7B debt.  ABB is a Swiss company and European conglomerate with strong interests in power and electricity generation.

Other

7. Gold ETF (IAU) – $12, 52 week range $11-$13, no dividend.  This ETF tracks the price of gold.  In case of a market correction (prices go down), gold often holds its value on a comparative basis.  On the other hand, gold pays no dividends and does not generate profits

We looked at bitcoin but there currently isn’t a direct bitcoin ETF and if someone wanted to trade bitcoin or ether they would be better off trading it directly.  These sorts of crypto currencies can cause taxation and other related issues and are too complex for this portfolio at the current time.