Your largest equity buy in the last three months is...(long term buys mostly)

[nafregnum]

I've enjoyed reading this thread today, mostly for all your thoughts on holding periods and concentration.

 

Letting my winners run has usually been my best move.  My big regrets have been failures to take larger positions when I feel like I've found a winner.  Haven't bought anything this year, but sold off a little GLASF to sleep better.

 

My main taxable account looks like this - I think I bought Booking, Citi, Nintendo, and Disney last year, but I didn't feel high conviction so didn't make them large positions.  Looks like I sold off most of my losers to offset gains from selling some old winners last year, so the screenshot isn't a good picture of past failures such as BABA.

 

I was lucky to follow a lot of you guys into Energy a few years back, particularly Obsidian which I had been in and out of earlier when it was PennWest -- big thanks for SharperDingaan for defending his rationale on OBE back when it was turning around and it was still unpopular.  I should've listened to him about energy being something you don't hold for the long term.  I wish I had sold above $10 when Russia invaded Ukraine and oil prices were surging.  

 

My best performer and my biggest position sizing regret was Enphase, bought back in 2017.  It turned into a 200 bagger before I sold off most of it, and now I just keep a sliver as a memento.  It was only a 0.1% position, DAMMIT!  That old lesson from Enphase influenced me to build up a bigger position in GLASF a year or two ago.  Buffett has said he's proud never to have lost more than 5% due to a single bad investment - I think he said Tesco was his largest mistake ... so, if I feel particularly convicted about something, I might take as high as a 6 or 7% initial position size.  The way I think about it, If I were to hold a lot of 1% positions I'd probably be better off just buying the S&P.

 

 

When I'm tempted to get more active, I remember this story I heard about research at Fidelity.  (I asked Claude-AI to tell the story since I didn't want to type it out)

 

Quote

 

In 2014, Fidelity reportedly conducted an internal study to determine which types of accounts had performed the best over the long term. The results were surprising:

 

1. The best-performing accounts belonged to investors who had forgotten they had accounts at Fidelity.
2. The second-best performing accounts were those of deceased individuals.

The implication of these findings is that a "buy and hold" strategy, with minimal interference or trading, tends to outperform more active management approaches over the long term. Investors who were not actively managing their accounts - either because they had forgotten about them or because they had passed away - inadvertently implemented this strategy to great effect.

 

This study humorously supports the investment philosophy of legendary investors like Warren Buffett, who famously said that his "favorite holding period is forever."

 

It's worth noting that while this story has been widely circulated and is often cited, Fidelity has never officially published or confirmed the results of this supposed study. As such, it should be taken with a grain of salt and considered more as an illustrative anecdote rather than a rigorously proven fact.

 

 

[Mephistopheles]

Biggest this year -

 

Autonation: Fairly straightforward, solid ROC and valuation, and a buyback monster

[Castanza]

Fairfax, GOOGL, and BRK have been my largest adds to existing positions 

[thowed]

Largest adds this year have been FFH and TVK, though I only initiated them last year.  They were both companies I felt were quality at a reasonable valuation.

 

I've bought small bits of the highest quality companies that I love but are indefensibly expensive.  From things like CSU, I've learned that a basket of companies like this should do well, despite the punchy price, but still find it hard to buy them.

[SharperDingaan]

Yes it's the GSIB bank. Not a popular choice, but with the forced merger of CS, and the Basel related guarantees of ALL Central  Banks, it's pretty hard to see it as anything else. At the current price it's still less than double what it was in March 2023 (CS merge), the Swiss Central Bank isn't going to be accepting of anything less than a 'Swiss Finish', and we would have no difficulty exiting at market price.

 

SD  

 

[Viking]

Lots of interesting posts in this thread.

 

My largest equity buy the past 3 months was;

1.) increased my Fairfax position by 20% at average cost of C$1,485 on Aug 2. Fairfax delivered better than expected results and the stock sold off about 8% over 2 or 3 days.

2.) increased my Fairfax position by another 20% at an average cost of about C$1,445 on Aug 7. When including the gain from the recently announced sale of Stelco and the excess of FV over CV of the equity holdings, Fairfax was trading at close to  1 x BV - crazy cheap.

 

With the spike in Fairfax's share price over the past 2.5 weeks I have sold 75% of the shares I added. The average gain was about 7% - that is what I am targeting with these types of trades so I often sell early.

 

I did something similar when Fairfax sold off aggressively in early Feb (when Muddy Waters published the 'report' of a UFO sighting). 

 

I find 'flexing' my position size (up and then back down) in my best ideas can be a good way to get a little extra return out of my best ideas. This strategy works best when a stock is very volatile - and it looks like volatility in Fairfax is picking up a little.

 

This strategy worked very well for me with Fairfax when it traded on the NYSE from 2003 to 2009 (Fairfax delisted from NYSE in 2009).

 

I only 'flex' in my tax free accounts (RRSP, LIF, RESP etc). I will do it very selectively in my TFSA account. So my 7% short term gain in Fairfax has no tax consequences. 

 

I keep about 25 to 30% of my portfolio for tactical opportunities like this. My goal with this portion of my portfolio is to simply earn a modest 8 to 10% over a year - no pressure. When not invested it sits is cash and earns 3.5% to 4%. I love having cash on hand when Mr. Market gets irrational, like it did a couple of weeks ago. My experience (over 20 years of investing) is a couple of wonderful opportunities that fall in my circle of competence will present themselves each and every year - I just don't know in advance what they will be. But that's ok with me.

Edited August 26 by Viking

[james22]

Increased my MSTR position by 60% when pulled back.

[UK]

5 hours ago, Viking said:

Lots of interesting posts in this thread.

 

My largest equity buy the past 3 months was;

1.) increased my Fairfax position by 20% at average cost of C$1,485 on Aug 2. Fairfax delivered better than expected results and the stock sold off about 8% over 2 or 3 days.

2.) increased my Fairfax position by another 20% at an average cost of about C$1,445 on Aug 7. When including the gain from the recently announced sale of Stelco and the excess of FV over CV of the equity holdings, Fairfax was trading at close to  1 x BV - crazy cheap.

 

With the spike in Fairfax's share price over the past 2.5 weeks I have sold 75% of the shares I added. The average gain was about 7% - that is what I am targeting with these types of trades so I often sell early.

 

I did something similar when Fairfax sold off aggressively in early Feb (when Muddy Waters published the 'report' of a UFO sighting). 

 

I find 'flexing' my position size (up and then back down) in my best ideas can be a good way to get a little extra return out of my best ideas. This strategy works best when a stock is very volatile - and it looks like volatility in Fairfax is picking up a little.

 

This strategy worked very well for me with Fairfax when it traded on the NYSE from 2003 to 2009 (Fairfax delisted from NYSE in 2009).

 

I only 'flex' in my tax free accounts (RRSP, LIF, RESP etc). I will do it very selectively in my TFSA account. So my 7% short term gain in Fairfax has no tax consequences. 

 

I keep about 25 to 30% of my portfolio for tactical opportunities like this. My goal with this portion of my portfolio is to simply earn a modest 8 to 10% over a year - no pressure. When not invested it sits is cash and earns 3.5% to 4%. I love having cash on hand when Mr. Market gets irrational, like it did a couple of weeks ago. My experience (over 20 years of investing) is a couple of wonderful opportunities that fall in my circle of competence will present themselves each and every year - I just don't know in advance what they will be. But that's ok with me.

 

Thanks for sharing! I am doing something simillar with this "trading around the core", which sometimes makes total sense for me, since you already know what are you buying/selling very well, only at a lesser degree (perhaps max up to 20 percent of total position) and somewhat more reluctantly, since I am on the hook for a 15 percent tax, for doing this in any case. However, it seems that from the next year (still hard to believe:)) I will be able to use unlimited deferred tax accounts for basically all my investment portfolio, so it will be even less impediment for such trading, meanwhile I was/am moving more and more to a dealraker's style of operating:)

[dealraker]

Personally I've liking the posts of "I laid it out big time in X and it ain't gone nowhere yet." 

Edited August 27 by dealraker

[dealraker]

I'll add to my previous off-the-cuff comment of liking significant additions to ideas that haven't appreciated --- to an appreciation of there being no mention yet of Dollar General.  My snide bias, one that often displays how wrong I can be unfortunately, is that Dollar General has the best by far self-destructive business model.

 

I live in a county of approx 172,000 people and there are over 25 DG's within this area.  All but 5 are within single digit miles of WalMart and the two local stores to me are almost every day the subject of derogatory online discussions, some  disgusting.  And two more "stores" are underway close by in an area of rapid growth in housing/business.

 

 

[Blugolds]

30 minutes ago, dealraker said:

I'll add to my previous off-the-cuff comment of liking significant additions to ideas that haven't appreciated --- to an appreciation of there being no mention yet of Dollar General.  My snide bias, one that often displays how wrong I can be unfortunately, is that Dollar General has the best by far self-destructive business model.

 

I live in a county of approx 172,000 people and there are over 25 DG's within this area.  All but 5 are within single digit miles of WalMart and the two local stores to me are almost every day the subject of derogatory online discussions, some  disgusting.  And two more "stores" are underway close by in an area of rapid growth in housing/business.

 

 

 

I live in a major metro area and there are DG around, but I have a cabin several hours away that I frequent regularly, that drive takes me through several rural small towns with no major retailers, but they have DG and they always have a full parking lot, its really the residents only option that doesnt require driving 30-60 min to a more populated area with major retail, I think that it their niche. 

 

Not investment recommendation just an observation. Also the nature of the store and its target customer would lend itself to comments I suspect. At least when I have gone in to grab something its usually a customer base attracted to ultra cheap products, generally out of socioeconomic necessity. 

[Hektor]

15 minutes ago, Blugolds said:

several rural small towns with no major retailers, but they have DG and they always have a full parking lot, its really the residents only option that doesnt require driving 30-60 min to a more populated area with major retail, I think that it their niche. 

 

Not investment recommendation just an observation. Also the nature of the store and its target customer would lend itself to comments I suspect. At least when I have gone in to grab something its usually a customer base attracted to ultra cheap products, generally out of socioeconomic necessity. 

Good observations @Blugolds. What is stopping a ALDI or a LIDL from entering these markets?

[Blugolds]

1 minute ago, Hektor said:

Good observations @Blugolds. What is stopping a ALDI or a LIDL from entering these markets?

 

I suppose nothing, but in all honesty these towns are very, very small, we're talking maybe a local cafe or two, a gas station (maybe 1 chain station and 1 off brand) , maybe a subway a church or two and of course several bars.

 

I dont think the community could support Aldi enough to build out there even if pulling residents from rural areas in a 30 min radius, its all farms and trailer homes on land. I dont know if it would be worthwhile to build out a new location for Aldi when there are certainly better options with higher traffic in other areas of the state/country. 

 

I was thinking about it more thoroughly, in my 2 hour drive, the first hour is major interstate larger towns/cities and they have DG that faces more competition via all the big retail names TGT, WMT etc... the last hour is rural hwy, I pass through 4 of these small rural towns, 3 of them have DG locations. 2 of the towns are as I described above and in the previous post 30-60 min from any other option or what I would consider a competitor. the final town closest to the cabin is nearly 100% tourism supported, large lake/flowage, resorts, bars, marinas and again no other options, the nearest option is 20 min away in a slightly larger (but still small town) that has a Walmart and an ACE hardware, Walmart has been there for probably 15-20yrs now and the ACE has been there for at least 30. I dont consider the ACE competition because the offerings are totally different, but WMT would be with grocery options and other cheap goods. 

 

Another interesting observation, we are big Aldi shoppers for things we dont get at COST, but occasionally I risk life and limb to enter WMT in our major metro area, generally for the same items eow or so. I have noticed when we do extended stays at the cabin WMT is the option we choose generally once we get there for the same staples and the prices on several items are actually HIGHER in the rural area than they are back home. So the people are really stuck, no options to speak of and the options that they do have charge 20%+ more on several basics (and that is just what I noticed) that I can buy them for back home. This county like I said supported nearly entirely via tourism is one of the poorest in the state according to analysis, so they really feel that expense and the majority (again according to analysis by provided by the county/state) are uneducated and below the poverty line). Its easy to see how a cheap retailer like DG can come in, give them a cheaper, closer, convenient option and take some of that community market share from WMT.

 

Also in these Midwest rural areas in winter a 30 min drive vs "down the street" can be a big deal in bad weather for folks driving clapped out hoopties.

[Hektor]

Seems like they have some protection from disruption and some opportunities to expand. Thanks @Blugolds

[lnofeisone]

1 hour ago, Hektor said:

Good observations @Blugolds. What is stopping a ALDI or a LIDL from entering these markets?

Lidl struggled mightily in mid-markets. I'm thinking Charlottesville and Richmond, VA where I recall them wanting to close stores. I am skeptical they can enter the Boondocks, WV, and take over DG's business. 

 

Aldi—maybe, but the way I see them enter new markets is by acquiring what is already familiar to people (Winn-Dixie). 

 

I think if you know Lild or Aldi, you go there because they are reasonably good value to consumers. If you don't know them then DG, TGT, and WMT is where you go. This is my East Coast biased observation.

[dealraker]

I think Dollar General sells the "store where there's no competition" model but the reality is quite different.  We shall see, it is a good debate.

 

Every 9 days in NC.

 

https://www.newsobserver.com/news/business/article286644025.html

[Pelagic]

56 minutes ago, dealraker said:

I think Dollar General sells the "store where there's no competition" model but the reality is quite different.  We shall see, it is a good debate.

 

Every 9 days in NC.

 

https://www.newsobserver.com/news/business/article286644025.html

 

The article is paywalled so I'm not sure what specifics they get into, but one of the things DG is somewhat famous for in commercial real estate is simply opening a new store near an old one when the landlord for the existing store tries to raise rates or they want to update the store footprint, since they often operate in areas where the underlying real estate is inexpensive. Shuttered DGs, while not as prominent as say former Pizza Huts, are becoming a hallmark of rural America, often with a new DG open nearby.

 

Agreed though, their model of competing where there are no competitors is attractive. Fascinating company to follow.

[Junior R]

Biggest buys APO, FFH, FIH.U, NKE, STLC

 

STLC was biggest buy before buyout lol

Edited August 27 by Junior R

[SharperDingaan]

18 hours ago, Viking said:

Lots of interesting posts in this thread.

 

The takeaway from all this .... is evolution.

 

Getting comfortable with being both 'buy and hold' (long core position) and short (flex, swing-trade, etc.) - on the same stock, and at the same time; and often on many of the same companies! (we prefer to do FFH around dividend time). It's not giving up on a thesis, it's merely using your accumulated knowledge/experience (alpha).

 

Recognising that you can't swing for the fences until you have both ongoing liquidity (T-Bills &/or marginable stock > USD 10) and reliable diminished cash outflows. Then recognising that when you do swing at a junior, you need to have at least a  100,000+ shares at < 1.00 if the risk is to produce a meaningful result. Most have this backwards.

 

Recognising that AUM is purely a wealth managers compensation metric. Most people just want to be able to eventually reliably retire comfortably; AUM primarily exist to be used, not to contribute to someone else's compensation.   

 

Realising that the tax tail shouldn't wag the dog. Take the gain today, pay the tax, pay down some mortgage .... versus risk losing it altogether and/or suffering a benefits claw-back later (for the rest of your life) 'cause your taxable income is now too high.   

 

Takes a while to learn!

 

SD

Edited August 27 by SharperDingaan

[Spekulatius]

4 hours ago, Hektor said:

Good observations @Blugolds. What is stopping a ALDI or a LIDL from entering these markets?

Local TAM is too small. I like the LIDL stores but they seem more geared towards urban or suburban shoppers that like bargains.

 

 

If you see one buy the German Weißwurst and some Pretzel from the Bakery - they are pretty good and both are some vintage Germany meal right there.

 

There are some other awesome deals to be found there like a good Sopressata for dirt cheap.

 

Edited August 27 by Spekulatius

[Hektor]

Thanks @Spekulatius

[Xerxes]

The podcast TIPS had a good 10 minutes comparison between Canadian Dollarama and Dollar General in this discussion 

 

https://podcasts.apple.com/ca/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000664082589

[Blugolds]

2 hours ago, dealraker said:

I think Dollar General sells the "store where there's no competition" model but the reality is quite different.  We shall see, it is a good debate.

 

Every 9 days in NC.

 

https://www.newsobserver.com/news/business/article286644025.html

 

I think it can be both. My examples are definitely "store where there is no competition" but to your point, I also have seen several instances in various locations where there is a Dollar General and a Dollar Tree nearly within the same parking lot and I remember several times thinking what is this? Like some kind of bargain/discount strip mall area? Didn't see the competitive advantage there at all.

 

As to what percentage of their locations across the country are locationally advantaged vs just in the mix with the rest of the options, I have no clue my comments are purely anecdotal and haven't done a deep dive, I wouldn't consider myself a shopper at either of them and the couple times I have stopped in I don't see anything that would make a customer pick one deep discount retailer of chintzy products over the other, literally the only differentiating factor that I can see is location to the customer but if they are within a 200 yards of each other then that kind of goes out the window. 

[sleepydragon]

Speaking of DG, I want to mention Dollar tree. Its CFO was buying the stock last year at a much higher price than now. It’s not usual a CFO will buy company stock

[UK]

7 hours ago, Spekulatius said:

Local TAM is too small. I like the LIDL stores but they seem more geared towards urban or suburban shoppers that like bargains.

 

 

If you see one buy the German Weißwurst and some Pretzel from the Bakery - they are pretty good and both are some vintage Germany meal right there.

 

There are some other awesome deals to be found there like a good Sopressata for dirt cheap.

 

 

Still not for a 100 percent, because they do not have some 'must buy' brand names, but I think we currently spend majority of our grocery spending in LIDL from a zero some ~5-8 years ago and I was very sceptical at the begining. They have really good/competitive/disruptive for others business model. We buy lots of these Pretzels to, though I did not realised until now, you should pair them with the weisswurst:). My son will be happy to know...he likes all these different German wursts (currywurst is his favourite) a lot:)

 

Edited August 27 by UK