What's your current portfolio?

[Graham Osborn]

Here's my updates as of today:

 

This model portfolio is +12%ish since July 1 when I started it - whatever that means lol.  This apparent good luck may be short-lived, but the Sharpe ratio seem OK and it seems insulated against a range of wacky central-bank scenarios.  We'll see.  I hope to have the opportunity to liquidate the majority of my external options portfolio (which is far more volatile) and beef this portfolio up to ~20 positions in the next few months.

 

No longer appearing here is AGN which I covered at my target and GBX which I sold at a small loss since the technical picture seemed to have changed.

 

PS: covered HCA a few minutes after entering the trade, going to wait.

[Sleepwell]

Permanents: ~45%

UHAL

ALLY

BRK

 

Generals/Undervalued: ~35%

ICON

AC

GM

FOGO

JASO

MSG

 

Special Situations: ~20%

TWX

DVMT

LVNTA

[dpetrescu]

1. SSD - Simpson  50%

This is my main idea for the last few years. Such a plain and simple company. Everything I've learned from Buffett I found in this company. Not planning to sell for many decades.

 

2. GOOG - Alphabet  ~18%

Who am I to say if its overvalued but what an unprecedented moat.

 

3. IBM leaps

This is more of an investment in Warren than IBM. I generally stay away from turnaround stories.

 

4. GM

discount bin

 

5. ADSK - small position

Software company with good moat and just recently moved from sales to subscription like Adobe.

 

6 other - VZ Verizon, short CAT, short RIO, LEE Enterprises

 

7. TBD - I'll have a lot of cash available in January with a bunch of long term options expiring so looking for more ideas. Great discussion. (Although it would be nice for everyone to include the 10 word summary for the few key holdings)

[bennycx]

55% WFC, 22% BAC, 22% AXP, rest cash (6 digit portfolio)

 

SICK moves! Can't believe my luck..

[Graham Osborn]

Currently:

 

CTSH

SAFM

USNU

SMCI

EBN.V

IPGP

GOOGL

SRMC

AGN (short)

IEHC

PHO.V

[sculpin]

Currently:

 

CTSH

SAFM

USNU

SMCI

EBN.V

IPGP

GOOGL

SRMC

AGN (short)

IEHC

PHO.V

 

Do you have a short (1 para) investment case for EBN.V?

[Graham Osborn]

Currently:

 

CTSH

SAFM

USNU

SMCI

EBN.V

IPGP

GOOGL

SRMC

AGN (short)

IEHC

PHO.V

 

Do you have a short (1 para) investment case for EBN.V?

 

No I'm actually long.  I'm aware of the historical short thesis but I don't agree.  I actually like the stock very much.  I haven't been shorting much lately but I would only short a large cap - regardless of your views shorting a microcap is really risky.

[Patmo]

Currently:

 

CTSH

SAFM

USNU

SMCI

EBN.V

IPGP

GOOGL

SRMC

AGN (short)

IEHC

PHO.V

 

Do you have a short (1 para) investment case for EBN.V?

 

No I'm actually long.  I'm aware of the historical short thesis but I don't agree.  I actually like the stock very much.  I haven't been shorting much lately but I would only short a large cap - regardless of your views shorting a microcap is really risky.

 

I think he meant short in the literal sense - aka 1 paragraph instead of say a 10 page pitch of your long position.

[TwoCitiesCapital]

PEFIX ~ 11%

FNMAJ ~ 9%

FRFHF ~ 8.5%

SAN/BSMX ~ 8%

FCAU/EXO ~ 8%

ATUSF ~ 6.5%

SBRCY ~ 6%

PDER ~ 5%

ZROZ ~ 4%

OGZPY ~ 3%

LUKOY ~ 1.5%

Cash ~ 26%

 

Not including sub 1% positions or my shorts, the gross exposures are above.

 

 

 

 

 

[sculpin]

Currently:

 

CTSH

SAFM

USNU

SMCI

EBN.V

IPGP

GOOGL

SRMC

AGN (short)

IEHC

PHO.V

 

Do you have a short (1 para) investment case for EBN.V?

 

No I'm actually long.  I'm aware of the historical short thesis but I don't agree.  I actually like the stock very much.  I haven't been shorting much lately but I would only short a large cap - regardless of your views shorting a microcap is really risky.

 

I think he meant short in the literal sense - aka 1 paragraph instead of say a 10 page pitch of your long position.

 

Yes I did - guess I should have used "brief"!

[mhdousa]

PEFIX ~ 11%

FNMAJ ~ 9%

FRFHF ~ 8.5%

SAN/BSMX ~ 8%

FCAU/EXO ~ 8%

ATUSF ~ 6.5%

SBRCY ~ 6%

PDER ~ 5%

ZROZ ~ 4%

OGZPY ~ 3%

LUKOY ~ 1.5%

Cash ~ 26%

 

Not including sub 1% positions or my shorts, the gross exposures are above.

 

Can you talk a little about PEFIX?

[TwoCitiesCapital]

PEFIX ~ 11%

FNMAJ ~ 9%

FRFHF ~ 8.5%

SAN/BSMX ~ 8%

FCAU/EXO ~ 8%

ATUSF ~ 6.5%

SBRCY ~ 6%

PDER ~ 5%

ZROZ ~ 4%

OGZPY ~ 3%

LUKOY ~ 1.5%

Cash ~ 26%

 

Not including sub 1% positions or my shorts, the gross exposures are above.

 

Can you talk a little about PEFIX?

 

PIMCO/RAE fundamental index for emerging markets.

 

Uses a Total Return Swap proxy for Research Affiliates' value weighted emerging market index and then invests the collateral in fixed income instruments to beat the Libor+spread on the TRS. Very similar to PIMCO's StocksPlus fund (also a high performing fund), but for emerging market, value weighted exposure instead of cap-weighted S&P.

 

Was heavily overweight Brazil and mineral companies last year and was up ~50% as EM rallied. Top 1% of EM performers last year so may not do as hot this year and I've taken some gains, but ultimately I like the structural potential of returns from both fixed income and equities and its' value focus. Will probably be a long-term holding to get diversified EM exposure along with the single names I select.

 

 

[StevieV]

1. SSD - Simpson  50%

This is my main idea for the last few years. Such a plain and simple company. Everything I've learned from Buffett I found in this company. Not planning to sell for many decades.

 

2. GOOG - Alphabet  ~18%

Who am I to say if its overvalued but what an unprecedented moat.

 

3. IBM leaps

This is more of an investment in Warren than IBM. I generally stay away from turnaround stories.

 

4. GM

discount bin

 

5. ADSK - small position

Software company with good moat and just recently moved from sales to subscription like Adobe.

 

6 other - VZ Verizon, short CAT, short RIO, LEE Enterprises

 

7. TBD - I'll have a lot of cash available in January with a bunch of long term options expiring so looking for more ideas. Great discussion. (Although it would be nice for everyone to include the 10 word summary for the few key holdings)

 

Curious about SSD.  What makes it so attractive in your mind?

 

I know almost nothing about the company.  However, at first glance, it looks like they have been on a long round trip back to their peak earnings of 10 years ago.  I guess it is not that surprising that earnings peaked in the housing bubble, but it has taken a long time to get back to that point.

 

I do think the construction sector has some room to run.  Unlike say, auto sales, new homes sales don't appear to be near any type of peak to me.  I think the more gradual rebound in housing starts is a good thing for the industry.

 

As I said, I don't know anything about the company and have no opinion on its prospects.  Curious about it given your strong statement and large investment.

[CorpRaider]

PEFIX ~ 11%

FNMAJ ~ 9%

FRFHF ~ 8.5%

SAN/BSMX ~ 8%

FCAU/EXO ~ 8%

ATUSF ~ 6.5%

SBRCY ~ 6%

PDER ~ 5%

ZROZ ~ 4%

OGZPY ~ 3%

LUKOY ~ 1.5%

Cash ~ 26%

 

Not including sub 1% positions or my shorts, the gross exposures are above.

 

Can you talk a little about PEFIX?

 

PIMCO/RAE fundamental index for emerging markets.

 

Uses a Total Return Swap proxy for Research Affiliates' value weighted emerging market index and then invests the collateral in fixed income instruments to beat the Libor+spread on the TRS. Very similar to PIMCO's StocksPlus fund (also a high performing fund), but for emerging market, value weighted exposure instead of cap-weighted S&P.

 

Was heavily overweight Brazil and mineral companies last year and was up ~50% as EM rallied. Top 1% of EM performers last year so may not do as hot this year and I've taken some gains, but ultimately I like the structural potential of returns from both fixed income and equities and its' value focus. Will probably be a long-term holding to get diversified EM exposure along with the single names I select.

 

I used to hold that.  Think I "traded" out of it at one point after a quick inconsequential gain.  I'm sure to my detriment.  I think I also got spooked out about PIMCO's use of derivatives generally, at some point.

[TwoCitiesCapital]

PEFIX ~ 11%

FNMAJ ~ 9%

FRFHF ~ 8.5%

SAN/BSMX ~ 8%

FCAU/EXO ~ 8%

ATUSF ~ 6.5%

SBRCY ~ 6%

PDER ~ 5%

ZROZ ~ 4%

OGZPY ~ 3%

LUKOY ~ 1.5%

Cash ~ 26%

 

Not including sub 1% positions or my shorts, the gross exposures are above.

 

Can you talk a little about PEFIX?

 

PIMCO/RAE fundamental index for emerging markets.

 

Uses a Total Return Swap proxy for Research Affiliates' value weighted emerging market index and then invests the collateral in fixed income instruments to beat the Libor+spread on the TRS. Very similar to PIMCO's StocksPlus fund (also a high performing fund), but for emerging market, value weighted exposure instead of cap-weighted S&P.

 

Was heavily overweight Brazil and mineral companies last year and was up ~50% as EM rallied. Top 1% of EM performers last year so may not do as hot this year and I've taken some gains, but ultimately I like the structural potential of returns from both fixed income and equities and its' value focus. Will probably be a long-term holding to get diversified EM exposure along with the single names I select.

 

I used to hold that.  Think I "traded" out of it at one point after a quick inconsequential gain.  I'm sure to my detriment.  I think I also got spooked out about PIMCO's use of derivatives generally, at some point.

 

Certainly anytime you have leveraged exposure and then invest the collateral, it has the potential to go disastrously wrong. The long-term returns of the StocksPlus fund gives me some confidence that they are able to manage those risks appropriately.

 

The key is to make sure the collateral isn't positively correlated with the underlying leveraged exposure. Nothing worse than having your collateral diminish in value just at the the time you need it. A portfolio of highly rated, highly liquid bond securities should be a reasonable hedge to a portfolio of EM equities. It's not like they're investing it all in EM fixed income as an offset to EM equities.

[Ross812]

10.7% Cash

 

7.9% - AXP

7.8% - DIS

7%    - LKQ

6%    - FRFHF

5.5% - NOV

5.4% - TJX

4.8% - LBRDA

4.7% - LCSHF

4.5% - CHKDG

4.1% - WFC

4%    - SBUX

3%    - BDVSY

3%    - BF.B

3%    - IAU

2.8% - WLTW

2.8% - BAM

2.5% - LSXMA

2.2% - V

2.2% - GILD

2.1% - BRK.B

2.%  - FWONA

1%    - ATUSF

1%    - TRIP

1%    - KMI

 

[mhdousa]

PEFIX ~ 11%

FNMAJ ~ 9%

FRFHF ~ 8.5%

SAN/BSMX ~ 8%

FCAU/EXO ~ 8%

ATUSF ~ 6.5%

SBRCY ~ 6%

PDER ~ 5%

ZROZ ~ 4%

OGZPY ~ 3%

LUKOY ~ 1.5%

Cash ~ 26%

 

Not including sub 1% positions or my shorts, the gross exposures are above.

 

Can you talk a little about PEFIX?

 

PIMCO/RAE fundamental index for emerging markets.

 

Uses a Total Return Swap proxy for Research Affiliates' value weighted emerging market index and then invests the collateral in fixed income instruments to beat the Libor+spread on the TRS. Very similar to PIMCO's StocksPlus fund (also a high performing fund), but for emerging market, value weighted exposure instead of cap-weighted S&P.

 

Was heavily overweight Brazil and mineral companies last year and was up ~50% as EM rallied. Top 1% of EM performers last year so may not do as hot this year and I've taken some gains, but ultimately I like the structural potential of returns from both fixed income and equities and its' value focus. Will probably be a long-term holding to get diversified EM exposure along with the single names I select.

 

I used to hold that.  Think I "traded" out of it at one point after a quick inconsequential gain.  I'm sure to my detriment.  I think I also got spooked out about PIMCO's use of derivatives generally, at some point.

 

Certainly anytime you have leveraged exposure and then invest the collateral, it has the potential to go disastrously wrong. The long-term returns of the StocksPlus fund gives me some confidence that they are able to manage those risks appropriately.

 

The key is to make sure the collateral isn't positively correlated with the underlying leveraged exposure. Nothing worse than having your collateral diminish in value just at the the time you need it. A portfolio of highly rated, highly liquid bond securities should be a reasonable hedge to a portfolio of EM equities. It's not like they're investing it all in EM fixed income as an offset to EM equities.

 

Do you own the institutional version? Is there somewhere where you can get if for less than the $1m minimum?

 

[giofranchi]

10.7% Cash

 

7.9% - AXP

7.8% - DIS

7%    - LKQ

6%    - FRFHF

5.5% - NOV

5.4% - TJX

4.8% - LBRDA

4.7% - LCSHF

4.5% - CHKDG

4.1% - WFC

4%    - SBUX

3%    - BDVSY

3%    - BF.B

3%    - IAU

2.8% - WLTW

2.8% - BAM

2.5% - LSXMA

2.2% - V

2.2% - GILD

2.1% - BRK.B

2.%  - FWONA

1%    - ATUSF

1%    - TRIP

1%    - KMI

 

Thank you Ross,

I would like to know your mind on four topics:

1) What do you see in AXP that prompted you to make it the largest holding in your portfolio?

2) I don't know LKQ: another large position of yours. Why?

3) BRK is a small position. What concerns you at this point?

4) Finally, TJX is a wonderful compounder: why do you think they have been so successful in a very tough environment for retailers?

 

Cheers,

 

Gio

[TwoCitiesCapital]

PEFIX ~ 11%

FNMAJ ~ 9%

FRFHF ~ 8.5%

SAN/BSMX ~ 8%

FCAU/EXO ~ 8%

ATUSF ~ 6.5%

SBRCY ~ 6%

PDER ~ 5%

ZROZ ~ 4%

OGZPY ~ 3%

LUKOY ~ 1.5%

Cash ~ 26%

 

Not including sub 1% positions or my shorts, the gross exposures are above.

 

Can you talk a little about PEFIX?

 

PIMCO/RAE fundamental index for emerging markets.

 

Uses a Total Return Swap proxy for Research Affiliates' value weighted emerging market index and then invests the collateral in fixed income instruments to beat the Libor+spread on the TRS. Very similar to PIMCO's StocksPlus fund (also a high performing fund), but for emerging market, value weighted exposure instead of cap-weighted S&P.

 

Was heavily overweight Brazil and mineral companies last year and was up ~50% as EM rallied. Top 1% of EM performers last year so may not do as hot this year and I've taken some gains, but ultimately I like the structural potential of returns from both fixed income and equities and its' value focus. Will probably be a long-term holding to get diversified EM exposure along with the single names I select.

 

I used to hold that.  Think I "traded" out of it at one point after a quick inconsequential gain.  I'm sure to my detriment.  I think I also got spooked out about PIMCO's use of derivatives generally, at some point.

 

Certainly anytime you have leveraged exposure and then invest the collateral, it has the potential to go disastrously wrong. The long-term returns of the StocksPlus fund gives me some confidence that they are able to manage those risks appropriately.

 

The key is to make sure the collateral isn't positively correlated with the underlying leveraged exposure. Nothing worse than having your collateral diminish in value just at the the time you need it. A portfolio of highly rated, highly liquid bond securities should be a reasonable hedge to a portfolio of EM equities. It's not like they're investing it all in EM fixed income as an offset to EM equities.

 

Do you own the institutional version? Is there somewhere where you can get if for less than the $1m minimum?

 

I do own the institutional shares. It's through my 401(k) at the moment, but most retirement accounts allow you to waive investment minimums or significantly lower them to $5,000-$10,000 so purchasing in an IRA/401(K) etc should help out with that.

[valueinvestor]

~30% - Brookfield Canada Office Properties

~20% - Cimpress

~10% - Loral Space and Communications

~5% - Seattle Genetics

~5% - Incyte Corp

~2.5% - Coty Inc

~2.5% - Henry Schien Inc

~2.5% Nuvectra

~1% - Rentech Inc

~15% - Cash (It will be approximately ~50% once Brookfield Canada Office Properties is acquired and Loral provides a special dividend).

[Ross812]

10.7% Cash

 

7.9% - AXP

7.8% - DIS

7%    - LKQ

6%    - FRFHF

5.5% - NOV

5.4% - TJX

4.8% - LBRDA

4.7% - LCSHF

4.5% - CHKDG

4.1% - WFC

4%    - SBUX

3%    - BDVSY

3%    - BF.B

3%    - IAU

2.8% - WLTW

2.8% - BAM

2.5% - LSXMA

2.2% - V

2.2% - GILD

2.1% - BRK.B

2.%  - FWONA

1%    - ATUSF

1%    - TRIP

1%    - KMI

 

Thank you Ross,

I would like to know your mind on four topics:

1) What do you see in AXP that prompted you to make it the largest holding in your portfolio?

2) I don't know LKQ: another large position of yours. Why?

3) BRK is a small position. What concerns you at this point?

4) Finally, TJX is a wonderful compounder: why do you think they have been so successful in a very tough environment for retailers?

 

Cheers,

 

Gio

 

Gio,

 

1) I think AXP is a fantastic company, but JPM is proving they can go after AXP's bread and butter for the last few years. My position in AXP was based on valuation after their loss of Costco then what was essentially progressive betting on what was a falling knife. I bought a 2% position at $75, doubled it to 4% at $65, and held my nose and converted my last 3% of cash to AXP at $55. I've been selling since then. As for what I think it is worth, AXP is still a high quality company that is not going to be displaced, but it's growth will slow with competition. The company is still worth a PE of at least 15.

 

2) LKQ - My thoughts on the company are here:

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/lkq-lkq-corp/msg266841/#msg266841

 

3) I actually have a personal large position in Berkshire! The reported portfolio is from our more actively managed IB account. There is a large slug of BRK.B stock sitting with a pile of index funds in a Vanguard account. With that said, I am not very excited about Berkshire's investment into Apple. 

 

4) The long and short of TJX's success is because they can offer something the internet cannot - a treasure hunt. My wife goes to TJ Maxx to find xyz and comes out with a nice sweatshirt and new shoes.  I look at internet retail's impact on brick and mortar like this: brick and mortar stores that sell items people specifically seek out are easily replaced by internet retail. For example, if I want to buy a Vitamix blender, Ralph Lauren Polo Shirt, Samsung TV, or Ping driver I could drive to Bed Bath and Beyond, Macy's, Best Buy and Dicks Sporting Goods respectively or I could type it into a browser and purchase online. With retail models like TJX, IKEA, and Costco, you do not have this problem.   

 

[cwericb]

valueinvestor Sometimes I feel that I am the only guy here that has BOX.UN. Like you, it is a mojor holding and I have been in it for a very long time through various names and I have done well.

 

I see that it may be another six weeks before we get the results of the formal valuation of Brookfield’s offer. Are you waiting this out or reducing now? Think I will probably hang in.

 

Portfolio by size:

FFH. - Fairfax Financial

BOX.UN - Brookfield Canada Office Prop

RY - Royal Bank

ALS - Altius Minerals

CKI - Clarke

PWT - Penn West Petroleum

BB - Blackberry

MTL - Mullen Group

CHK - Chesapeake Energy Corp.

POE - Pan Orient Energy Corp.

ADV - Alderon Iron Ore Corp

[valueinvestor]

valueinvestor Sometimes I feel that I am the only guy here that has BOX.UN. Like you, it is a mojor holding and I have been in it for a very long time through various names and I have done well.

 

I see that it may be another six weeks before we get the results of the formal valuation of Brookfield’s offer. Are you waiting this out or reducing now? Think I will probably hang in.

 

Portfolio by size:

FFH. - Fairfax Financial

BOX.UN - Brookfield Canada Office Prop

RY - Royal Bank

ALS - Altius Minerals

CKI - Clarke

PWT - Penn West Petroleum

BB - Blackberry

MTL - Mullen Group

CHK - Chesapeake Energy Corp.

POE - Pan Orient Energy Corp.

ADV - Alderon Iron Ore Corp

 

Investing is a lonely profession, as many would say. Though there are other perspectives that are more qualified to provide insight, in my perspective, it is a forever hold. Hoping the proposal falls through, even if shares tumble. May not have the capital, but more than happy to purchase as much as possible to the point where the only owners that matter is Brookfield and me. A portfolio of properties that is recession resistant and typically reserved for pension funds and other institutional investors, that made more money than the last even during the years of the oil "crisis," and pays a 5-7% annual dividend distributable monthly, trading at a price that is below NAV ex the tallest building in Calgary where occupancy starts late 2017 is quite compelling.

 

How do you feel that Brookfield is taking out BOX-UN less than NAV?

[cwericb]

Oh I feel the same as you, although I have been a little frustrated that the market has undervalued it. I have owned it since the Royal Trust/Gentra days - 1993ish. As far as Brookfield’s deal is concerned, this is the second time they have tried. The last time their offer was found to be seriously lacking - much to their embarrassment.  I had heard that one of the institutional investors was dragging their feet saying the offer was too low. I am quite content to stay for the long run but if the offer is accepted I think I will put the funds into one of the other Brookfield companies.

[valueinvestor]

That's incredible, never knew about everything you've said. Thanks for the information! Do you think since Brookfield Property Partners are purchasing it below the stated NAV, then they will be able to re-rate the property portfolio on their balance sheet? This may translate into BPY's share price.