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 Five Updated March 2016 – Tax Time

Portfolios four and five are 6 1/2 years old.  The beneficiary contributed $3500 and the trustee $7000 for a total of $10,500.  The current value is $10,435 for a loss of ($65) or (0.6%) or basically flat performance when adjusted for the timing of cash flows.  The spreadsheet detail can be found here or in the links on the right.

We sold Seaspan (SSW), Yahoo (YHOO) and Sasol (SSL) this year while buying Union Pacific (UNP), Tata Motors ADR (TTM) and ConocoPhillips (COP).  Right now ConocoPhillips (COP) is on watch after cutting their dividend 75%, and LinkedIn was hit hard during their recent earnings guidance, also putting the stock on watch.

We had some gains and losses this year the brokerage account makes it easy to calculate taxes since it includes the original cost basis as well as the sales information.

Portfolio One Updated March 2016 – Tax Time

Portfolio One is our longest lived portfolio, starting right after 9/11 and is 14 1/2 years old.  The current value is $35,158 with the beneficiary contributing $7500 and the trustee $16,500, for a total of $24,000.  Thus the gain is $11,158 or 46%, which works out to about 4.5% / year over the life of the portfolio adjusted for the timing of cash flows.   The detail can be found on the links on the right or you can go here to download the spreadsheet.

There are 20 stocks in the portfolio, which is about the maximum I’d want to track in a single portfolio.  When we add new cash into the portfolio and / or sell existing stocks we are consolidating in order to keep at a maximum of 20 stocks.

We had three sales last year, with Garmin (GRMN), Yahoo (YHOO) and TransAlta (TAC).  We had four purchases with Box (BOX), Novartis (NVS), Tesla Motors (TSLA) and Tata Motors (TTM).

We had a net long term capital loss last year, driven primarily by TransAlta.  Up to $3000 in stock losses can be deducted against ordinary income so this at least should be helpful on the beneficiary’s tax form.  The portfolio earned $935 in dividends and had $70 in foreign taxes withheld (this can be deducted as a benefit on the US tax return).  It is important to realize the percent of total return that comes from dividends; while some companies like Tesla won’t pay dividends (because they are growing rapidly), the return on dividends from established companies is an important source of income growth for the portfolio.  I will be sending the tax information to the beneficiary from the brokerage company after completing this update.

Portfolio Six After 2015 Purchases and Sales

Portfolio_Six_After_Fall_Purchases

Attached is an update for Portfolio 6 after fall purchases and sales.  New stocks include Union Pacific (UNP), Tata Motors (TTM) and ConocoPhillips (COP).  Returns do not include the impact of dividends so they are understated.

Portfolio Five After 2015 Purchases and Sales

Screen Shot 2015-11-21 at 9.43.53 AM

Attached is an updated view of Portfolio Five after 2015 purchases and sales.  New stocks include ConocoPhillips (COP), Tata Motors (TTM), and Union Pacific Corporation (UNP).  Returns only include stock price rises and decreases not dividends (so dividend paying stocks are understated).

Portfolio One After 2015 Stock Purchases and Sales

Portfolio_One_Post_2015_Purchases

Attached is a screen shot from Google Finance for Portfolio One after the purchases and sales from Fall, 2015.  New purchases are Tesla (TSLA), Tata Motors (TTM), Novartis (NVS) and Box (BOX).  The remaining cash also is updated.  The % return by stock does not include dividends (only “raw” stock price appreciation or depreciation), so dividend payers have a higher return than is listed.

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