BeSmartRich’s Portfolio update- May 2017 11

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Hello my precious readers!

Has it been what? 2 months since my last portfolio update?

I have been crazy busy but things are almost manageable on my end. 🙂

 

Let’s see what’s happening in the market.

US dollar reverted back. Gold gained. TSX shed about 2% and Nasdaq shed 2.5% after reaching all time high.

 

 

So what happened?

Trump’s hype is fading slowly?

 

The picture from Politico magazine is priceless.

 

The markets have gained so much since Trump got elected because of all the pro-business promises by Trump such as cutting taxes, reducing regulation, boosting business activities and spending etc… 

 

The markets bought into the promises but all of sudden Trump’s billionaire style of ‘I can do anything because I got power and money’ bully starts to be noticed. The most recognizable one is intimidating and firing FBI director. The markets noticed big time and may be realizing that Trump is bad for the markets.

 

Well the markets were overdue for a pullback and for most of working people like us who will keep having money to invest from our day work, pullback is a great thing.

 

I love pullback and when I saw one of my admirers from my watch list shed like 4% because of Trump but no one else, I pulled the trigger. An old fashion pullback trigger on a super high quality company! I just love times like this.

 

 

Brexit

I should keep reminding you guys. Do you remember Brexit? It seems like no one cares about Brexit anymore. It is already forgotten a long time ago. But at the time of Brexit, the markets thought the World was going to end and the planet earth was going to get hit by cyclone followed by earthquake, tsunami and drought. 

Why? Because of the eventless event Brexit that no one cares about.

 

and that’s exactly when I squeezed every dollar I had at the time and added more on Linamar and an developed country ETF, XEF.

Both of them are up quite a bit. $6,000 gain or 35% gain within last 11 months. I am praying for very long sustained Brexit. I want market crash by 30%. 2008-2009 was the best time to invest. I wish I was an active investor at the time.

 

 

 

 

Enough of that.

Let’s talk about us.

Some of you may have been wondering why we have not been put out net worth for a while. You know, we have been updating it every month ever since we started this blog?

We decided to temporarily stop showing our net worth until further notice. It is not that it is not growing. (It is still growing) but my wife was not too comfortable sharing that sensitive info in this scary internet world. As I always strive to be a good husband, I listened. Well I was kinda half threatened by her.. 🙂  However I am happy to update you what we have and how our portfolio is doing periodically.

 

Our Portfolio 

Here is our top 10 holdings

Cash       

CGI group                       

Constellation Software

Couchetard

Dollar Tree                      

Enghouse

Lassonde Industries     

Linamar                           

MTY Foodgroup            

Stella Jones                     

 

 

Top 10 holding including cash represents substantial amount of our total portfolio.

Linamar has been doing well (It had 23 consecutive quarter of double digit operating earnings growth) and it has gone up quite a bit but I feel they are still undervalued. I will watch it closely since it is a cyclical company. Did you notice how many Quebec companies are in our top 10 holding? 4 of them. I gotta thank Quebecors for building solid businesses. Love you guys although I know 0 person from there. Keep it up!

You may have noticed that Corus Entertainment has disappeared from March 2017 portfolio update. 

Yes you got it right. We sold out the position. It may go up further but we wanted to crystallize the gain we had on it. The industry is already disrupted and I can only see a downhill for them from a long term perspective.

I have some cash around looking for an opportunity. If nothing pops up, then I will probably wanna buy more on Lassonde industries. I can’t get enough of it. I wish it drops like 50% on one day so that I can sell almost everything in my portfolio and fill my portfolio with the company.

 

 

Portfolio performance

Let’s take a look at how we are doing so far this year?

If you invested $100,000 on September 8, 2014 with us, hypothetically speaking, you would have had $127,344 now whereas the Markets would have taken $200 from you during last 2.5 years.

If you invested one of those mutual funds, then you would have considerably less because those greedy bastards mutual fund managers would have fed themselves as well. Ever wondered why Canada big 5 banks make so much money? Because some people have been contributing it (hint- not me.. 🙂 )

 

I am beating the markets by 0.33% in 2017 but we still have another 7 months to go so let’s see who will win this year.

 

So far BSR :TSX = 4:0 including 2017.

Bring it on!

 

 

Did you enjoy my post? Here are my most popular posts.

 

 

I recently put Warren Buffett’s top 50 quotes together. Check it out.’

 

 

Don’t forget about his stock picking tips!

 

 

Have you heard about Peter Lynch, a Wall street legend? Check out Peter Lynch’s top 13 best stock picking tips as well. You won’t regret it.

 

I also shared why cash flow is so important when you buying any stocks

 

Also importance of not waiting too long when you find great companies

 

Importance of insider ownership- especially founders

 

Many people like this post as well.

 

I recently restructured my portfolio and changed investing style

 

The result of restructuring

 

This was interesting

 

Classic Kevin o’leary post was quite popular.

 

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11 thoughts on “BeSmartRich’s Portfolio update- May 2017”

  • Reply ↓
    DivHut

    Great update. While it’s always nice to be beating the markets it can be largely irrelevant if your main focus is income. The way the world markets have been behaving in recent weeks you can be up or down in a matter of a day but it’s those dividends that stay consistent. Great job for the month.

    • Reply ↓
      Be Smart Rich Post author

      Thank you for your comments and that’s a fair statement. I was once like you however I changed my investing strategy after realizing that dividend do have very little impact on performance of the stock itself.

      My family is not relying on dividend income to support our lifestyles yet as we are pretty young so until then we will purely driven by performance of the total portfolio including dividend and capital gains rather than dividend income alone. What I am looking for is companies that are great at allocating its capital with higher return on equity. If companies cannot find a better way of spending its net income to boost overall returns than paying out dividends for the owners, then it makes senses for them to pay out dividends so that shareholders can take the money and invest in elsewhere. However if companies can invest the retained net income to provide higher return than shareholders can then, it would be a prudent idea to use the retained earnings to grow and expand.

      Peter Lynch’s ‘One up on Walstreet’ will be helpful to you. Typically dividend growers are Slow growers or Stalwarts where growth has been slowed but can provide consistent and reliable dividend incomes.

      Slow Growers
      Large companies that are old and expected to grow about the same level as the country’s growth. Utilities are a great example of a slow grower. I am not against it but I certainly do not expect a high return. Examples for this would be PG&E Corp and Duke Energy, the biggest utilities companies in North America. PG&E achieved 4.93% of return per year for last 10 years and Duke Energy achieved 6.3% of return per year for last 10 years. That’s less than markets (9-11% on average)

      Stalwarts
      Large companies that have solid products that are stable and recession proof. Companies that fit this would be Kellogg.
      Kellogg has grown 5% per year last 10 years. Again, that’s less than markets.

      I like dividend growth investing but I am more inclined to super high quality growth stocks at fair price. Just like Buffett said, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”

      Cheers!