Sunday, July 22, 2018

Uranium Again

A few weeks ago, I sold my URA ETF due to changes in its constituents.  Took a loss of USD 1650.

To replace this, I have bought directly into Cameco, and a bucket of small uranium companies.  This makes up around 3% of my portfolio.




Wednesday, May 30, 2018

Bought Offshore oil companies

Over the past few days, I bought a small amount of US-listed offshore oil companies.  Rig holders, OSVs and drilling.  Around 2.5% of my portfolio.  I believe that, barring a recession, both shallow and deep water exploration and development will return over the next few years.


I finished buying the day before the market dived on Italy worries. We'll see how it goes.

Friday, May 11, 2018

Bought Cardinal Health (CAH)

This week, bought 417 shares @ USD 53.55 at a total cost of USD 22,332.

CAH released bad earnings early this month, due to write offs in its newly acquired medical equipment distribution.  This drove the stock price down 20%, allowing me to buy at just below 12X FCF.



Thursday, May 3, 2018

Selling Kering. And Inner Peace.

Sold my Kering shares at Euro 477.50 on 31st April.  Profit was SGD 57K, or 180%.  Over 4 years.


Since I bought Kering in early 2014, its main brand Gucci has transformed from a bland, logo-driven luxury brand to a young, exciting one.  Unknown designer Alessandro Michele took over and revitalised the brand, making it younger, more colourful, and gender neutral.  I don't understand any of this fashion crap, but sales are up double digits for the last 7 consecutive quarters:

The brand's transformation is best captured in pictures.

Severed head at fashion show:


Collaboration with graffiti artist Gucci Ghost:



Handbags - the bread and butter of the industry - now with colourful prints:
Now Gucci is a trendy, hip brand, popular with millennials.  It is the hottest fashion brand in the world.


Hard to know if the decision to sell was correct.



At a PE of 30, Kering is now reasonably expensive.  But the trend is still up - both the stock price and fashion trends - and I cant see any sign of it stopping.  Its easy to see the stock doubling again from here due to increased sales combined with operating leverage.  OTOH, a lot of good news is already priced in.  Fashions come and go.  Trees don't grow to the sky.  Especially for a company that sells handbags - its not the next Google or Facebook.

I chose to sell because of:
  • Valuation
  • The chart was going parabolic.  Theres no real support to tell when the uptrend breaks.
  • I want to lighten up on stocks near the end of the business cycle.

Someone once told me, even when a stock shoots up after you sell it, you should be happy for the guy who brought it from you.  Because even if he makes money that you could've made, he's still taking a greater risk than you.

Inner peace.


Tuesday, April 24, 2018

Bought McKesson (MCK)

Bought 150 shares last night at USD 150.57 for a total of USD 22,590.44.

I'm wary of buying stocks this late business cycle.  But the drug distributors' revenues did not fall in the last recession.  Their profitability depends on the supply side, not demand. Their profits - and stock price - have fallen in the past few years due to generic drug price deflation.

The main long term risk is the consolidation of their customer base, which causes price competition.  But I think its already priced into the stock price.  I don't see a catalyst now for the stock or its earnings to go up, but by the time I do, so will everyone else.  I'm willing to hold this for a few years, through the next recession.  When a company is part of an oligopoly, has recurring revenue from an essential good, and is selling at 11X FCF, how can you not buy it?


I'm now 50% invested:


Looking to sell the banks in the next 6-12 months as we come to the end of the business cycle.

Gazprom

I entered a small position in Gazprom, the Russian gas company, last year.

Gazprom is an indispensable supplier of piped gas to Europe, trading at a single digit PE.  It (and its underlying currency) trade in accordance with crude oil prices.  It was a 1% speculative position, due to the risk of forced privatisation.

This was based on a previous recommendation from Capitalist Exploits.  They turned negative on it due to increasing geopolitical risk: US shareholders have been given a deadline to dispose of their Rusal stock/bonds, and Gazprom could be next.

Sold it last week.  Profit around USD 600.


Sunday, April 22, 2018

Covered FMG Short

Covered my FMG short at on 20th April at AUD 4.69.
It had closed above the 4.50-4.55 support level for several days.
Loss of AUD 2.8K.