For the most part, I have kept my investing side private. I made this choice because over the last two years of investing and trading (mostly forex speculation of which I do not do anymore) there is one thing my partner “Mr. Market” has taught me about the Capital Markets and the Money markets, do not be fooled that you know everything about the market, it always changing and ready to take your money no questions asked. But there is no denying I love playing this game. There is something strangely arousing about skimming through hundreds of pages of annual reports and proxy statements looking for deep value in the so-called “efficient market” just to prove those academics wrong.
There is no better feeling than figuring out the story of a small cap company with great potential for growth and exorbitant amounts of Free Cash Flow ready to be recognized by the market and watching your stock values sore as others make subpar gains with their blue-chip stocks. But I’m not here to seduce you with my strange fixation with the equity game, but I wanted to share a journey I took starting in January with The Capitalise for Kids Challenge hosted by CIBC Investors Edge. It’s a national portfolio management competition where I also helped raise funds for children’s mental health. Coming off the bat of a shaky 2018 Q4 there was a lot of fear in the market and most marketable securities had dropped by 10-20%, but my investing philosophy tells me to buy when others are fearful and sell when the streets are greedy. Now having said that I am not suggesting that this is the best Investment style it’s just what works for me. My Asset allocation is unorthodox to say the most but being different in the market is what helps you beat the street. I guess at this point it’s pretty obvious that I am an active manager and not passive. But some of the greatest Investors have had wonderful careers using this approach, John C. Bogle the founder and chief executive of The Vanguard Group is the first name that pops up when you talk about passive investments or Mutual Funds to anyone in the finance industry. This just goes to show you that what is more important in the market is not the stock picking but establishing your relationship with Mr. Market. I digress, the reason I took part in the Capitalize for kids Challenge was the fact that they are trying to help and support Children who are unable to cope with the troubles of the world because some are born with a less developed brain and others have serious mental illnesses and no access to facilities. Some of the beneficiaries have done so much work in the health care space by providing these facilities to help kids get access to the tools they need to feel normal and help them with their education and growth, but funding is a big issue. Some of the companies that are part of the sponsorship are The George Hull Centre for Children and Families, Yorktown Family Services, KidsHelp Phone, IWK Health Centre and Sick Kids Foundation. Each has dedicated time and effort to help children and their families fight against mental illness, and as a student who has been on the opposite end of the stick it resonated with me and I had to get involved. If you want more information on each one they have dedicated websites where they discuss their missions and how they are impacting society. If you are still interested in giving a donation to the campaign you can inbox me and I will send you the link and any additional information.
And now the performance of the portfolio, I hesitated to write up this section because there is a common trope in investing where individuals coattail off other investors ideas without doing their own research and due diligence, this my friends is not investing that is speculation. I just want to start by saying I am not anyone’s Investment advisor or representative and this information is my opinion and not advice in any way shape or form.
Now with the legalities out of the way let’s take a look at how the portfolio performed over the last three months.
Format Notes: I will list the holdings that I had in the portfolio to this date, I will not include any rebalancing, risk management and dividends payments for simplicity. I will state each holding weight in my portfolio and the nominal return that it generated, I will not use real returns adjusted for inflation because the holding period was only three months, and then I will give my reasoning to why I was holding a few off the top winners and some of the interesting findings that occurred over the last couple months.
Ranking as of 12/03/2019
My Portfolio was in the number 88 spot nationwide, so I have maintained my position in the top 100 over the three months. Compared to the other students at Simon Fraser University my portfolio is in second place. At the begging the portfolio was worth $1 Million CAD and as of 12/03/2019 the value is $1.07 Million CAD my total return was 7.26% my monthly return was 1.9% and my daily return was 0.04% (the portfolios below and above me had negative returns daily, -0.36% and -0.23%. I will explain this later.)
1) Apple Inc (AAPL)
– 23.71% of the Portfolio, Nominal Return of 15.16%
2) International Business Machines Corporation (IBM)
– 1.64% of the Portfolio, Nominal Return of 0.59%
3) International Petroleum Corp (IPCO)
– 5.78% of the Portfolio, Nominal Return of 10.2%
4) 3M-Minnesota Mining and Manufacturing Company (MMM)
– 29.31% of the Portfolio, Nominal Return of 6.1%
5) Monster Beverage Corp (MNST)
– 7.06% of the Portfolio, Nominal Return of 7.54%
6) PepsiCo (PEP)
– 1.38% of the Portfolio, Nominal Return of 1.02%
7) Royal Bank of Canada (RY)
– 0.96% of the Portfolio, Nominal Return of -0.13%
8) Sandstorm Gold Ltd (SSL)
– 17.31% of the Portfolio, Nominal Return of 7.97%
9) Walmart Inc (WMT)
– 12.88% of the Portfolio, Nominal Return of 1.14%
The top holding are Apple and 3M, Apple has been through some ups and downs because of bad news in the last couple months but their recent acquisition of Laserlike a machine learning startup, their dividends payouts might increase and the call for stock repurchases have caused the value of the stock to reach its 3 months high this week. ( If you want my Full Equity report you may send me a message) . Although 3M is an income stock it experienced rather abnormal uptrends during the 2019 Q1, this might be because investors are looking for safer investments and want to escape the riskier equities (Especially the FAANG stocks). For full details on why I picked these stocks if interested, I have my equity reports on all of them, you just need to inbox me and I will gladly share my findings.
Now the reason why I experienced capital gains on days the market was being sold off and others lost money was that my portfolio was significantly weighted towards all weather conditions (Commonly Known as All-weather Funds). When Mr. Market was feeling greedy my Apple bet would make money and my positions in Sandstorm Gold Ltd(Gold usually does better in conditions when investors are moving out of Equities) would lose a bit of value, but when the opposite happened the prices for the income stocks(Walmart Inc, 3M-Minnesota Mining and Manufacturing Company) and commodity Stocks(Sandstorm Gold Ltd, International Petroleum Corp) would experience massive gains as investors shift to safer bets.
And that’s that, we are in the last couple days of the campaign and I am not expecting much price action in the next week as a Macro based investor, I do not predict stuff I prepare for it. During the last day, every portfolio will receive their dividends payments and mine is currently $ 16 974 CAD which would bring the total for the portfolio to about $1.086 Million CAD. Although the portfolio management is coming to an end, the fight to help children with mental illness is still going on, and I will do everything in my power to continue to support and fight for this cause.