frommi

Sold BRX, XOM and bought more MSM,ENB,IRM. Bought back SYF puts. I am slowly reducing my diversification and try to be a little more concentrated ( but within my limits and always with the goal to increase my income and the safety/quality/growth of that income ). My EUR/USD hedge was stopped out at breakeven.

Sold WHG (didn`t meet my "buy more" test on a second inspection, they will have lots of redemptions next quarter) and PEP (reached fair value). Bought more ENB (got a lot more comfortable after the latest earnings) and TAP. Bought back the FB put with a small gain and sold some puts on SYF.

1.) These are 100% of my life savings, its an irreplaceable asset base. 2.) I make mistakes, a lot of mistakes. 3.) With 10% annual returns, i can live a comfortable life. Why risk what i have for something i don`t need? 4.) For 99% of people in the world my portfolio is already very concentrated. 5.) I did a lot of tests with different ranking criteria on my watchlist and the Top15 portfolios always came out as having the best returns. I don`t know why that is, but that is the reason my maximum position size is 6.6% (1/15). There was only one ranking that was better and that was past 4 week return, Top5 was best there, but Top3 was a lot worse, so i don`t trust it. And now the most important aspect: Handpicking stocks out of my ranking ALWAYS performed worse. My conclusion: I am a bad stockpicker, but i know how to create portfolios that outperform.

If it looked rosy, you wouldn`t get it that cheap. But at a 2019 P/E of 6 a lot of bad stuff is already priced into the stock. But its also still a small position for me, a recession next year may derail the investment.

bought more SYF, looks like an overreaction to the WMT news.

Pretty boring right now, size from top to bottom. Tobacco/Consumer ~25%, 25% REITs, 25% Energy and Industrials, 25% Healthcare/Utilities/Other. 5% dividend yield and 5-7% expected dividend growth on a portfolio level, 10-50% undervalued by my rough estimates. I won`t post 50% annual returns with this, but i also doubt that i get >-50% drawdowns :). October drawdown was ~-1.5% in $, +1% in €. KMI (6.6%) SRC MO SKT MSM (5.4%) WBA PM LON:BATS SPG D OXY (3%) HKG:0398 (the only netnet right now, but of course its paying a dividend and trades at a P/E<7) FAST KIM TAP XOM CAH T LON:IMB HSY (2.5%) PPL ENB (2%) CCI MPW CVS IRM MDP SYF (1.2%) BRX PEP DIS WHG EPR STOR BP AMNF OMC UBP WPC SITC (0.3%) Options: -FB puts 145$ strike 21DEC2018 Trade/hedge positons: EUR futures that cover 100% of the dollar exposure with a break even stop around 1.134$.

Sold CHD (reached my definition of expensive),VTR (reached fair value). Bought more MSM and ENB. Bought back the puts i sold on FB pre earnings. (value collapsed from 6.7$ to 1.3$ in just 3 days!) Sold 145$ puts on FB again with expiration date 12/21/2018. Hedged currencies this morning into JPY and EUR, but with tight stops. (Stop on EUR is at break even already, so this hedge is essentially free now.)

Sold PG,EIX,NNN,IBM and bought more SRC,MSM,FAST,ENB,OXY,TAP,KIM. PG,EIX and NNN reached fair value and IBM just suxx. Took my tax losses because i think that the Redhat deal was a huge value destruction and probably an act of desperation. Maybe that marks the bottom, but i don`t have to make back my money the same way i lost it. And the realized tax losses allowed me to buy more of other stocks.

Small update on currencies, since the spread between long term and short term interest rates in mexico has widened its currency is not in the top spot anymore. CAD and USD are still in the top 5 so i sold all currency hedges over the past weeks with a small loss.

Sold the spread for +-0 because i don`t like how strong the stock behaves in this market. Bought more KMI (reached my personal position size limit now) and MSM.

We can agree that studying FB and GOOG makes sense for anybody, because the economy of the advertising systems they use is just amazing (at least as long as demand for digital ads is growing, should this turn it can result in a double whammy). But i disagree that KO,KHC and PG struggled because of them, they just had problems with a strong USD and falling demand for unhealthy products over the last 10 years. I wouldn`t even call Google or Facebook Tech companies, in my mind they are just advertising spaces. But since they were overpriced for much of the last years they have together only performed in line with the market over the past two years, so there was nothing that a value investor has missed. MSFT is also interesting, but much too expensive right now. For other tech stocks like NVDA or TXN i would argue that you are looking at a cyclical industry just at the top. This is a dangerous place to be. And AMZN, NFLX or TSLA are not really investable for me at the current point in time. AAPL can be seen as a consumer products company. I agree with packer here, the tech sector is wide spread and you can`t brush them all together.

How did you determine this? I know at least two investors of group A that outperformed the market over the last two years (using low P/NCAV) and i am sure there are more than enough that outperformed over that timeframe with B), too. If tech doesn`t belong into my circle of competence why should i bet there? (My problem there is always to determine the longevity of the cashflows, because of that i also don`t invest in biotech/pharma.)

But why sell the German index specifically? This is my personal anti-home bias. According to https://papers.ssrn.com/sol3/papers.cfm?abstract_id=76248 Italy would work best, but i don`t think there is an active option market for that index. But when you look at the DAX holdings there are a lot of awful, overleveraged and cyclical businesses in it. The best is that no professional investor will ever use this effect, most investors i know laugh about it or dismiss it as a statistical fluke. (Should this change, i will probably reduce my position size)

That was my seasonality trade. I buy these puts every year on the first day of May and sell at the end of October or if the DAX goes down by 20%. Over the past 100 years this has hedged a portfolio without extra cost. Every 4-5 years the puts are 5-6 baggers. While this looks like an even trade it boosts portfolio performance by 3-4% on average and reduces drawdowns from -50% to -20%. That was also the a good way to survive the bear market of 1929->1932. I am a pretty fearfull guy and need this stuff to stay fully invested. I am sure i will look stupid for selling them one day too early on monday. :)

And sold some 140$ nov18 puts on FB for 5.6$, the premium is really fat. Looks like the market expects a pretty big move after earnings. *EDIT* I also bought a TSLA bear call spread 300/400 MAR2019 for 47$ credit because i just love the drama.

Sold all DAX puts and bought starter positions in SYF,TAP,MSM,WHG and more OXY,FAST,KIM,KMI

Bought back calls on TSLA and NFLX with a little profit. I expect that Musk has massaged the Q3 numbers, will run a huge show tomorrow and i don`t want to be in front of a short squeeze. And my shorting window ends in 3 days, so i am slowly preparing to go to 100% long again for the next 6 months.

Your question implies that you are looking for confirming evidence to feed your confirmation bias. Better ask in what type of environment you don`t want to own any financials and how likely it is that this will happen over the next 3-5 years.

FAST

http://www.joelstevens.net/ (or was that smiley supposed to be a wink and you already knew that and were being ironic?) No. Thanks!

Thanks! Was a good read, maybe you should start a blog with all the content you are producing? :)

Sold out of PBSV, bought more of D,SPG and IBM. But only because i reached my personal position size limit for KMI, SKT, BTI, PM and MO. I am down to 4% in netnets now and the rest is in defensive dividend growth stocks. I am still hedged with DAX puts and short call spreads on TSLA and NFLX.

I think this is the key here. Since depreciation lags capex by at least one year, earnings of capital intensive businesses are overstated, because they have to reinvest more than deprication in the future to maintain the status quo.

I own MO,PM,BTI and IMBBY. All of them pay out a huge amount of their earnings because they need so little capital to reinvest into the business. PM has maybe gone a bit far with their latest increase, but as long as the currency crisis doesn`t get worse i think they can get manage that. The next 1 or 2 years will probably see lower dividend increases. PM is a bet on a weaker dollar long term. MO is probably the safest bet right now, at least if JUUL sees more regulation going forward.

He is pretty unlucky right now, but i can imagine that he makes a comeback sometime over the next 1-2 years. The market was very irrational on the short side over the past 3-6 months. Nearly every stock with a high short interest has gone up a lot. Maybe some of the last short hedgefunds are in liquidation? Really looks like the last leg up before the meltdown.