Portfolio Four Updated November 2020

Portfolio Four is 11 years old.  The beneficiary contributed $6000 and the trustee $12,000 for a total of $18,000.  The current value is $30,032 for a gain of $12,032 or 67%, which is 7.7% / year adjusted for the timing of cash flows.  See the details here or on the link on the right.

Gains have come from Tesla (TSLA), Nvidia (NVDA), Procter & Gamble (PG), Oracle (ORCL), and Wal-Mart (WMT).  There are 19 stocks in the portfolio.  The others are generally doing OK although Box (BOX), Elbit (ESLT), and CME (CME) are down a bit recently.

Portfolio Four Updated December 2019

Portfolio Four is 10 years old.  The beneficiary contributed $5500 and the trustee $11,000 for a total of $16,500.  The current value is $22,566 for a gain of $6,016 or 37%, which is 5.1% / year when adjusted for the timing of cash flows.  You can see a summary here or at the link on the right.

The portfolio has 19 stocks.  Big gains have come from Appian (APPN), Elbit Systems (ESLT), Procter & Gamble (PG), Oracle (ORCL) and Wal-Mart (WMT).  It is important to factor in the impact of dividends on stocks held a long time; for example Royal Dutch Shell (RDS.B) and Westpac (WBK) look like “losers” from a stock price perspective – but when dividends are (properly) included, they move into the winning column.

Portfolio Three Updated August 2018

Portfolio three is 11 years old.  The beneficiary contributed $5500 and the trustee $11,000 for a total of $16,500.  The current value is $23,170 for a gain of 40% or 5.6% / year adjusted for the timing of cash flows.  You can see the data here or at the link on the right.

We have a few stocks that we are considering selling now.

  1. ABB (ABB) – ABB is a European conglomerate with a new CEO that is well run.  Down about 20% from 52 week high but too early to sell (just bought it last year)
  2. DowDuPont (DWDP) – this chemical company is performing well.  We will likely sell it before it splits into 3 stocks in 2019
  3. Baidu (BIDU) – Baidu is a large internet company in China.  It is down about 20% from 52 week high.  Will probably keep
  4. Elbit Systems (ESLT) – Elbit is an Israeli defense contractor.  They are doing well operationally but are down about 20% from a recent peak.  Probably will hold on to it
  5. Wal-Mart (WMT) – Wal-Mart is well run but in the fight for its’ life against Amazon.  May want to take our winnings and go. Stock recently rallied…

None of these are immediate sells but ones to consider.

Portfolio One Updated July, 2018

Portfolio One is almost 17 years old.  The beneficiary contributed $2000 net (of withdrawals) and the trustee $16,000 for a total of $18,000.  The current portfolio value is $42,930 for a gain of $24,930 of 138%, which is approximately 7% / year when adjusted for the timing of cash flows.  You can see the detail here or on a link on the right.

This portfolio has moved over to the beneficiary and the former trustee now has agency so that we can take advantage of free trades on the former trustee’s account.  We are now at a phase where it makes sense to consider making some sales to take “risk off” on the account.  In addition, cash yields about 1.85% “risk free” in a money market account, so the impact of leaving money in cash is less impactful (it used to be earning effectively zero).

Here are the stocks that we are considering selling:

  1. Tesla (TSLA) – Tesla is a highly risky and volatile stock.  There is enough information out there about this stock to fill 10+ blogs like this.  As a result it is under consideration for selling
  2. Anheuser Busch Inbev (BUD) – This giant multi-national beer company is well run by the G3 group out of Brazil.  But growth has been hard to come by because they are gigantic and they are battling the high end craft beer in the USA and cheaper alternatives abroad
  3. WIPRO (WIT) – This Indian outsourcer has a low dividend and hasn’t been making much of a return.  A candidate for selling
  4. Wal-Mart (WMT) – Massive retailer in battle for its life with Amazon.  Starting to acquire other companies and expand e-commerce footprint to compete.  May want to take earnings and move on
  5. Illinois Tool Works (ITW) – ITW has been a great stock for many years.  They acquire companies and integrate them and have earned above average returns.  They recently have had some worse earnings results and maybe it is time to take gains off the table and move on
  6. Comcast (CMCSA) – While Comcast has a hellish reputation, they have been a good stock.  Down a bit and under pressure, maybe it is time to take our gains and move on
  7. Ebay (EBAY) – Ebay was an amazing pioneer.  After the spin off of PayPal (PYPL) which is doing great, they’ve not done super well, and seem far removed from most top-of-mind Internet conversations.  Perhaps it is time to sell off remaining eBay

There are 19 stocks in the portfolio (we bought Exxon Mobil XOM twice at two different purchase prices so we show them separately and it looks like 20 stocks if you count the lines).  They are not all of equal weight – they range from about $1300 to about $4300, but the average ($43k / 19) is a bit over $2000.

If all the above stocks were sold, that would be about 33% of the portfolio.  At that point we could determine how much to keep in cash (perhaps all, or maybe just $10k of it) and how much to re-invest.  These sales would result in gains but they would not be too significant; they are all long term sales and the maximum rate is 15% for long term capital gains (and this only applies to the “gain” portion, which would be relatively small for these stocks).  Would calculate a more exact amount if we were specific on what was being sold.

We executed this plan in August and will determine what to do with the proceeds.


Recent Stock Activity – Updated as of the end of March

Earlier in the year we had a mini-correction of sorts. Since then, many of the stocks in the portfolio have recovered, but some haven’t. I went through the recent stock performance of all the stocks in the portfolio and here are a few that were highlighted.  Recently updated again…

  • Appian (APPN) – Appian creates low-code software for corporations.  They went IPO in 2017 and had a big run up; since then their shares have been volatile.  Our portfolios bought in at about $23-24 / share and now it is at $25, although it briefly hit over $40 / share (which is why the current price is about 60% of its 52 week high).  Watching for now
  • Comcast (CMCSA) – Comcast has been on a 5 year + run but recently hasn’t bounced back from the recent dip and is about 20% below its’ peak.  Comcast lives in a very complex regulatory and technological environment that is difficult to summarize without being an expert in that field (which I’m not).  Watching for now
  • Dow Dupont (DWDP) – Complicated chemical company about to split into multiple units.  Had some senior resignations and is down about 20%.  Watching for now
  • Elbit (ESLT) – Israeli defense contractor recently picked up Uzi machine gun maker from Israeli government.  Down about 20% recently.  Watching for now
  • Facebook (FB) – a whole series of publicity gaffes and issues with privacy have damaged the stock recently
  • General Motors (GM) – GM had been on a good run lately and has a 4% dividend which is also helpful.  They recently took a 20% hit and haven’t bounced back. On watch
  • Juniper (JNPR) – Juniper is a networking company that was a potential takeover candidate (there was talk of this in the market and the stock went up).  In general I feel that this company will either be bought out or be damaged by the move to the cloud and the rise of players like AWS.  It is down about 15% from its peak and may be time to sell (although it could also shoot back up if it became a serious takeover candidate)
  • Procter and Gamble (PG) – Procter and Gamble is a storied company with a reputation for being well run.  They are down almost 20% from their peak and haven’t come back.  Like GM they have a nice dividend of 3.5%.  The question is – is P&G going to be hurt badly by companies like AMZN or do they have enough brand firepower to thrive long term (they definitely will survive in some form).  Will watch this but hate to give up on what seems to be a well run company
  • Tesla (TSLA) – Tesla is a wild-card company whose valuation is dependent on Elon Musk’s awesome salesmanship.  Recently it has taken a 30%+ hit for a number of reasons including delays in their newest car lines.  May want to sell
  • Wal-Mart (WMT) – Wal-Mart is also down about 20% from its peak, for various reasons, including never-ending competition from Amazon.  They also are now looking to buy Humana which is interesting

Portfolio Four Updated October 2015

Portfolios 4 and 5 are both 6 years old.  Portfolio 4 has $3500 in beneficiary contributions and $7000 in trustee contributions for a total of $10,500.  The current value is $10,892 for a gain of $392 or 3.7%, which is about 0.9% / year.  You can see the details here or go to the links on the right.

The portfolio has several stocks that are on watch.  We have been holding on to Coca Cola Femsa (KOF) which is the Mexican coke bottler but the Mexican currency (Peso) has fallen heavily vs. the US dollar.  Devon Energy (DVN) has been hit hard by the commodity crash, although it is well run and pretty well hedged.  Garmin (GRMN) has also fallen recently on reduced earnings guidance.  Wal-Mart (WMT) is still up significantly from our purchase price but recent earnings guidance was poor and that stock fell too.  Royal Dutch Shell (RDS.B) and Statoil (STO) have also been impacted by falling oil prices, although Shell’s decision to stop arctic drilling is a good one from a financial perspective (the price of oil has made those wells uneconomic).  Seaspan (SSW) has a high price buoyed by a large dividend but that may not be sustainable.

Portfolio Three Updated October 2015

Portfolio three is eight years old, with the beneficiary contributing $4500 and the trustee contributing $9000, for a total of $13,500.  The current value is $13,243 for a loss of ($256) or (1.9%), which works out to an annual return that is slightly negative (0.4%) / year.  See the details here or use the links on the right.

The portfolio has had some stocks move against us lately.  Wal-Mart (WMT), an historically strong performer, recently came out with 3 year stock guidance that showed low growth and the stock went down.  Wynn (WYNN), a gambling company with strong interests in China, was also adversely hit by the Chinese governments’ crack down on money laundering and VIP gamblers.  Exxon-Mobil (XOM), the energy giant, has gone down tied with the commodity bust.  Yahoo (YHOO) is up overall but down from recent highs and is mainly a value play on its Alibaba (BABA) stake.

We will look at selling some of these stocks as part of our 2015 new stock purchase planning.

Portfolio One Updated October 2015

Portfolio One is our longest lived portfolio, at 14 years.  It started right after 9/11 and has tracked the ups and downs of the stock market since then.

The beneficiary has contributed $7000 and the trustee $15,500 for a total of $22,500.  The current value of the portfolio is $34,648, a gain of $12,148 or 54% since inception, at a rate of about 5.5% / year.  To date dividends have contributed over $5000 towards the value of this portfolio.  You can download the portfolio here or go to the links on the right.

For the year to date, the portfolio stocks are down about 7%, compared with the S&P 500 being up 2% and the non-US index down about 6% (in US Dollar terms).  The portfolio is roughly half US and half non US and the increased downturn is due to our concentration in resource stocks and some currencies that depreciated significantly vs. the US Dollar.

There are 19 stocks in the portfolio, with an average value of about $1700.  The largest position is Exxon (XOM) at about $3000 and there are 2 stocks under $1000, Statoil (STO) and Trans-Alta Corporation (TAC).  It isn’t a co-incidence that STO and TAC have been hit by the recent commodity price downturn (Exxon too, although not as much).  The goal would be to have less than 20 or so stocks in the portfolio.

There has been a lot of volatility in the market and we’ve been holding off on selling to see how the dust settles.  We may make some sales prior to reinvesting the new stock selections for 2015.  Items that we are considering for sale are TransAlta (TAC), Yahoo (YHOO), Garmin (GRMN), and Wal-Mart (WMT), although we don’t want to make hasty actions based on short term moves (this mainly applies to Wal-Mart).

Portfolio Four Updated November, 2014

Since we updated portfolios five and six in November it made sense to also update Portfolio Four.  The beneficiary contributed $3000, the trustee $6000 for a total of $9000.  Current value is $11,400 for a gain of $2400 or 26% which is almost 7% / year.  Go here for the detail or to the link on the right.

The same stocks Westpac, Garmin, and Wal-Mart have been major contributors to the gain.

Portfolio Four Updated July 2013

Portfolios 4 and 5 are both almost 4 years old. The beneficiary contributed $2000 and the trustee $4000 for a total of $6000. The current value of the fund is $7186, for a gain of $1186, or 19%, or about 7% / year (when the timing is adjusted for cash flows). You can see the portfolio detail in the links on the right or go here.

Portfolio 4 seems to be doing fine. All the stocks are above their purchase price, with a couple of big winners (Westpac and Wal-Mart) and the portfolio has many stocks that pay significant dividends. Dividends are particularly valuable since there is little or no interest income nowadays with low interest rates.

Last year we sold Exelon when they hit major problems and it looked like their dividend would be cut. The stock hasn’t moved much recently.

Portfolio Four Updated January 2013

Portfolios four and five are both three and a half years old. The beneficiary has contributed $2000 and the trustee has contributed $4000, for a total of $6000. The value of the portfolio is $7123, for a gain of $1123, or 18.7%, which is about 7% / year when adjusted for the timing of contributions. You can see the portfolio here or go to the links on the right side of the page.

This year we sold one stock that fell significantly in value, Exelon, since the pressure on that stock seemed unrelenting. The remaining stocks are all above the price we paid for them, and we will watch them to see if they become overvalued. Westpac, an Australian bank, has done well bolstered by a strong dividend and the rising Australian dollar (or the falling US dollar, depending on how you look at it) and Wal-Mart, that ferocious US retail competitor.

For taxes, there was one sale for a long-term loss (Exelon) of $236, and there was $209 in dividends paid.

Portfolio Four Updated December 2012

Portfolio Four is in its fourth year of investing (along with portfolio five). The beneficiary invested $2000 and the trustee invested $4000, for a total of $6000. The portfolio is worth $6626, for a gain of $626 or 10%, about 4% / year when adjusted for the timing of cash flows. You can see the portfolio on the left or by going to this link.

Exelon was recently sold because that company is under pressure to cut their dividend based on a change in the underlying utility business model – natural gas has reduced the average amount that power is sold for and Exelon is now making less money as a result. The other stock on negative watch is Nucor, a well run US steel company, whose dividends have offset half the drop in the stock price (which is why we track not only share price changes but also accumulated dividends, as well).

Winners include the Australian bank Westpac with a high dividend that has benefited from the increase in the value of the Australian dollar vs. the US dollar, and Wal-Mart the low price retailer that continues to perform well.

Portfolio Four Updated August 2012

Portfolio Four has been updated through August 2012 you can see the sheet here or on the right side of the page. The beneficiary contributed $1500 and the trustee $3000 for a total of $4500 over three years. The portfolio value is $5201 for a gain of $701, or 15.6% or 7% / year since inception.

Portfolio Stocks

Westpac Banking (WBK), an Australian bank, has done well especially with the rising Australian dollar and a high dividend. Wal-Mart has also done well and Nucor (NUE) the non-union US steelmaker, is under its price but has come up from its lows.

Stock Portfolio Review

In any portfolio it is good to keep and eye out for stocks that have had a big run up and might be at a point to sell as well as stocks that have dropped and don’t seem to have a chance to come back in the near term. We also watch for stocks that are just stagnant.

While we don’t rapid-trade in these funds we do rebalance occasionally. I am looking to re-balance before we buy stocks again as part of the annual purchase process (I contribute $500, they contribute $500, and then I “match” $500 for a total of $1500 every year) which happens at the end of the summer. Since many stocks are held in more than 1 portfolio I only describe them one time.

Portfolio One

– Urban Outfitters – low debt, seemingly well run, has recently had departure of top executives. Holding on a bit to see if they can turn things around since drop already priced in. if they don’t turn around by end of summer will drop

– Procter and Gamble – has been a core of the portfolio for a long time with a strong dividend. The CEO recently had a bad conference call and the company hasn’t been growing much when compared to rivals

– Canon – has been a good long term performer but Japan still refuses to have a stock market rally. Need to look at this more but want to have some Japan exposure

– Comcast – held on for a long time when the stock did nothing or tanked because believed in broadband growth and they also added and boosted their dividend over the years. Will watch to see if now it is over valued after the run up

– Ebay – another stock that did nothing for years and went down but finally came back. No dividend but basically a bet on pay pal since they sold Skype. Will look into this some more may want to take profits

– Exelon – the nations’ biggest nuclear utility. Now getting beat because of the low price of natural gas. This hurts coal much more than nuclear because nuclear always runs but it limits its profits, as well. They just took over a big Eastern utility. Will keep holding but watch

– Wal-Mart – recently ensnared in a bribery case. Given their massive size it didn’t move their stock price that much. They have been buying back shares aggressively and boosting the dividend which increases profits per share. On watch

– Philip Morris – had an immediate, great run up. Also a good dividend. May want to see for gains

Portfolio Two

– Also Urban outfitters, Wal-Mart

– Wynn – took almost a 20% hit out of the gate with the share holder dispute issue. Has regained half that loss. Still a great play on China gambling. Will watch

– Siemens – had a big run up but now back to break even. OK run but subject to Euro issues and overseas expropriation and potential corruption issues. Will watch

– Diageo – had big run up and fall, much of which was caused by gyration of UK currency vs. US dollar. Up now at some point may take profits

Portfolio Three

– Also Urban Outfitters, Siemens, Wal-Mart, Wynn

Portfolio Four

– Also Wal-Mart, Exelon

– Nucor – a well run metals company in the US that is subject to vagaries of US economy as well as foreign price competition. Will watch but hate to part with it because it is well run but may not be able to sustain high valuation (see Southwest Airlines)

Portfolio Five

– Also Seimens

– Alcoa is a company like Nucor, well run but hit hard by foreign competition and international prices and demand. Like Nucor would benefit from US rally post “great recession” but that never really materialized. Will continue to watch

– Riverbed – a company with high growth prospects that lost 30% of its value in a single day when they slightly missed their earnings. Held on and since they have hung on at about the same price. Will hold through an earnings release or two seems transient not permanent

Portfolio Three Updated March 2012

Portfolio Three is our third longest duration portfolio. It has been in existence for 4 1/2 years.

The beneficiary contributed $2500 and the trustee contributed $5000 for a total of $7500. Portfolio 3 is currently worth $7080 for a net loss of ($402) and performance of negative (5.6%), or about negative (1.9%) / year. For a bit there portfolio 3 was into “positive” territory but recently it has slipped slightly under.

Portfolio 3 has one “green” stock which is Wal-Mart, and no current “red” stocks (accumulated loss less dividends over $200). We are watching Urban Outfitters like in Portfolio 2 above and if it doesn’t make a move before September we will sell it when the re-investment period begins.

As far as taxes, there were no sales for gains or losses just dividends of $144. Thus this portfolio has less than $950 in unearned income and doesn’t have to file.