Portfolio Update January 2017 (+2.6%)

Source: career-intelligence.com

In attempt to force myself to keep on top of writing, I’m going to try and just make some key points about what happened to the portfolio in the given month – for record keeping, but also to take note of potential more in depth posts for later in the month.  It’ll also help me be diligent on keeping the current holdings up to date and reporting both good and bad months.

Key Gainers & Losers

January 2017 continued the post-Trump rally – with the portfolio up 2.6% despite a 3% drop in the USD (still don’t know why the C$ has been so strong this year).  Two main stars of the month – tech companies who sort of missed out on the broader market rally in November and December; and our divided portfolio of highly concentrated rate-reset preferred shares.  Apple Inc. (AAPL)Facebook (FB), Mercadolibre (MELI), and Shopify (SHOP) all provided double digit gains for the month – potentially in anticipation of earning reports for February.  Our rate resets also did well with the broader preferred share ETF (CPD) gaining 3.5% and many individual preferred shares gaining 5-10%.

It’s nice to be part of an overall market run up as not many stocks are bucking the trend.  No major laggards this month – with the biggest losses coming from the 3% drop in currency.

 Saying Hi & Bye

I don’t typically trade often, so unsure if this section is going to stay – while I’m not a day trader, I’m also not patient enough to buy and hold for a decade.  I also have this tendency to let the number of individual holdings in the portfolio expand to an almost unmanageable size (just to get a piece of some company that’s of interest) and then scale down.  So that typically means if a stock has peaked my interest, I’ll buy it just to own it, but give it 6 months to see how it pans out.  If I like what I see, I’ll likely hold on to it for 1-3 years.  January we actually some decisions:


Bye: Microstrategy Incorporated (MSTR) – we’re saying bye to Microstrategy mostly due to the initial silliness for buying it it the first place.  I’ve been noticing this big push in organizations to start looking at business analytics and intelligence over the past 5-10 years.  While MicroStrategy might have been one of the initial first movers in that space, Tableau Software Inc. (DATA) appears to be the top dog now (at least from a sales and customer footprint basis).  However, there are a whole slew of companies underneath Tableau and the idea for investing in this company was that some consolidation and/or take-over bid (i.e. from Microsoft Power BI, Oracle, Salesforce, etc.) would happen.  It still might happen – and I’ll kick myself it it happens next week – but I have better investment ideas than to leave it to a take-over gamble.

neulion logo.jpg  Hi: NeuLion Inc. (NLN) – I’m going to caveat this by saying a) I don’t typically invest a lot in these microsized companies ($250M) but b) it’s sometimes these “gambles” that can provide a nice push to your portfolio when it does work out.  NeuLion is the backbone behind live and on-demand streaming content for soccer, football (NFL), basketball (NBA), tennis, UFC, and many other events.  Being a NBA League Pass customer myself, I’m fascinated by being able to watch 4 games in HD at once and be able to toggle between games.  To me, that’s the experience I enjoy – especially as a consumer who has decided to cut-the-cord and stream everything.    While this also may seem hypocritical based on my reasoning for selling Microstrategy, Disney (DIS) made an investment in BAMTech, a NeuLion competitor, paying $1B for a 30% stake in a company with revenues of $100M – about the same amount of revenues that NeuLion current has.  While I can’t expect a buy-out at that same level, I can certainly risk 0.5% of the portfolio and dream that it happens.

Some Key Decisions (maybe some New Year Investment Resolutions too)

We’ll probably write specific posts about some of these decisions in details, but thought I’d at least jot them down should I procrastinate and not get to blogging about them:

resp logo.pngInclusion of Other Investment Accounts  – there has always been some difficulty trying to track performance and holdings as we hold various personal accounts (registered and non-registered), but also hold a corporate investment account (from my independent contracting days), and education accounts for the kids.  I’ve just decided to lump everything in as everything is still being managed collectively – and technically, should the kids not go to school (which would never happen), that money could flow into our registered retirement accounts.

index investing.jpgMove towards passive/index/couch potato investing for some accounts –  With these new investment accounts in the fold, these primarily are passively managed – basically, I’m following the Canadian Couch Potato by holding a diversified set of low-cost index-based ETFs and mutual funds within these accounts.  The main reason is that we’re likely to just add the minimal contribution at the start of each year, and I’m ok with the 6-7% annual return a balanced portfolio of bonds, Canadian equity, US equity, and International equity should get for these accounts.  While I’m not that big of a fan of slow and steady, I can appreciate the need for that in these types of accounts.


bank-of-america-logoReducing Bank of America (BAC): As we mentioned in our Year in Review, with the run-up in the US financials at the end of the year, Bank of America sat at over 10% of our overall portfolio.  The investment thesis for the bank was that it continued to trade well under book value after the 2009 financial crisis.  Now with the share price nearing book value, I feel it’s time to take some off the table – so we’ve reduced our BAC holdings for 15%.  Yes, we still expect book value to grow as interest rates rise and the bank continues to cut expenses – but this would apply to all US financials – and I’d rather go for a top dog like Wells Fargo (WFC), Goldman Sachs (GS), or JP Morgan (JPM) if it weren’t for the benefits the BAC warrants currently provide.

optionsConcentration vs. Diversification: I’ve always had this dilemma as to whether it is better to be diversified (which I will admit have never been) or concentrated in specific areas (i.e. US tech stocks) and hedge accordingly.  I’m leaning towards concentration leading to greater overall wealth (i.e. you don’t see Warren Buffett holding 40% in bonds), but I’m going to try out a few things through the year.  So, we’re going to start with some put ratio spreads on SPY and BAC to hedge against the overall market, and Bank of America.  Ironically, you also don’t have Warren Buffett hedging positions either – but I also don’t $80B+ on hand to invest when things go badly.



2 thoughts on “Portfolio Update January 2017 (+2.6%)

  1. Pingback: Portfolio Update – February 2017 (+9.2%, Currency +1.9%) | Fearless Cal's Investment Journal

  2. Pingback: News for Today: More Trading Shenanigans (Quarter End Trades – MIDD, BRK.B, SPY, BAC, AIG) | Fearless Cal's Investment Journal

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