BeSmartRich’s Portfolio update- August 2017 2


 

Trump and Kim JongEun hit it off!

 

Kim and Trump’s recent drama is an epic event that is really showing the world that unpredictable egoistic and moronic leaders with powers can really shift things wildly fast.

Epic battle just begun!

 

These are what’s trending in the news…

  • Donald Trump Says the US military is ‘locked and loaded’
  • North Korea prepares missile strike near the US territory of Guam
  • China, Russia and Germany sound alarm over war of words
  • Chinese President warns Trump to tone down language after ‘fire and fury’ threats to North Korea

It really feels like two 5 years old kids are fighting over chocolate pudding.

 

Trump’s epic tweet. He certainly toned it down from Fire and Fury…

 

and the markets are selling off. 

and here I am thinking about what to buy.

 

I think this is just rhetoric.

Trump cannot do much. Mostly empty words. Same goes for the ugly looking North Korean Kim (I am South Korean by the way in case you care…). The moment Kim does anything stupid, US and South Korean Military would jump in and Kim can get easily wiped out within several days.

This may put some pressure on China so that they can stop being trade partner with North Korea.

This kind of geopolitical risk typically provides me with a buying opportunity so I am looking to buy whatever is affected now. This is fun. Similar to Brexit but a little different (Trump’s epic battle with Kim is an entire equity wide volatility but Brexit was a bit more of certain sectors specific. The markets have been very upbeat lately so I am gladly welcoming this kinda short term volatility.

 

That was enough of Trump and Kim Jong Eun’s epic keyboard fights. Now let’s take a look at our portfolio.

 

Our Portfolio 

Here is our top 10 holdings

Lassonde Industries        12.7%

Linamar                           10.4%

Stella Jones                     9.3%

Cash                                 8.9%

CGI group                        7.1%

Enghouse                         5.4%

Constellation Software    4.7%

Couchetard                     4.6%

MTY Foodgroup              4.2%

Google                            4.0%

 

Top 10 holding including cash represents 71% of our total portfolio.

My portfolio is getting really concentrated. Am I worried?

Not really… Every single holding of mine literally print out cash year after year and are operated by relatively competent, frugal, visionary, ethical and debt hating leaders who have skin in the game. I am quite comfortable.

 

Diversification is overrated. There is no point of picking individual stocks if you are buying 100’s of stocks. Just buy ETFs instead which will make life super easier. Buying 5 or more stocks typically provides sufficient diversification and reduces its company specific risk by over 90%. Just make sure you constantly monitor your long term picks.

 

I am thinking of taking some profit of Linamar but have not fully made up my mind yet. Its most recent quarter showed pretty good performance and it is still growing while auto correction seems to be slowly sneaking into the sight. Linamar is a great performer and I love it but still it is a cyclical stock and I am typically not a big fan of cyclical stocks.

 

You may have noticed that I topped up Lassonde Industries, initiated a position on MTY Foodgroup and Google. Lassonde has been my favorite and I shouldn’t but am in love with the guy who is running it. As far as I know no analyst is following the company as this is boring as hell and still small. No share issuance at least for last 10 years. Brokers cannot make any money out of it so they are not even allowed to research and issue reports. The guy who is running it owns more than half of the company and only the other half is in circulation. It has been growing slowly and steadily and that’s the kind of game I like to play in when it comes to stock picking.

 

I just noticed that 25% of my portfolio is tech or tech service stocks so I may get temporary hit whenever tech sector is down but in a longer term, I do not see any issues with them at all and think that they will perform better than other sectors going forward.

 

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 $130,760 now whereas the Canadian Markets would have taken $1600 from you during last 3 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 4.49% in 2017 but we still have another 5 months to go so let’s see who will eventually win this year.

 

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

Yay!

 

 

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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2 thoughts on “BeSmartRich’s Portfolio update- August 2017

  • Riada

    Hi BSR,

    A great list of companies you have working for you. I sold off my Linamar position in my non-registered account two months ago to max out my wife’s TFSA. Unfortunately, this happened before the rally, and I’ve been looking for an opportunity to jump back in for all the reasons you stated above. Instead, I added to my Magna position after the pullback on Friday. I will be watching the NAFTA negotiations closely, but I see no reason to jump ship on these two, well-managed and profitable companies…not yet at least.

    • monsterid
      Be Smart Rich Post author

      Magna and Linamar both are solid companies making tones of cash. Only one thing worries me which is as I said that they both are cyclical companies and I am very well aware that cyclical companies’ stock really crash during the downturns. I will have to closely monitor it and when things get deteriorated, I should consider selling it off and buy non-cyclical.

      I personally like Linamar better due to its significant insider holdings compared to Magna’s and its smaller size but I consider both of them solid and best in the industry.

      Good luck and thanks for stopping by!