New Portfolio Snapshot & Allocation

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agri-business, alternative assets, asset allocation, bubbles, cash, diversification, emerging markets, Europe, Event Driven, frontier markets, Ireland, luxury goods, macro investment thesis, mobile, natural resources, Nifty Fifty, portfolio allocation, property, smartphone revolution, UK, US, volatility

Welcome to the dog days of summer…

A good time to pause & take stock of my portfolio. Following on from my recent H1-2017 portfolio performance post, here’s my Top 10 Holdings today:

In fact, the table lists all of my current disclosed holdings. And just to add some overall context, only five of these holdings actually feature in my Total Portfolio Top 10, while Newmark Security doesn’t even make the Top 20 any longer.

I won’t add new commentary here, since I last focused on my big H1-2017 winners & losers, and covered all my disclosed holdings in this January Top Trumps post. Not to mention, the rash of new investment write-ups this year: Alphabet (GOOGL:US), Record (REC:LN) & Applegreen (APGN:ID). But for your reference, I will provide corporate website & Bloomberg links, links to relevant historic posts & write-ups (remember, good investment theses tend to evolve slowly!), plus the latest share price & market cap for each stock:

i) Alphabet (GOOGL:US, or GOOG:US)   (9.5% Portfolio Holding):

‘So Why Not Google It..?’

Share Price:   USD 940.08

Market Cap:   USD 648 Billion

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Current Portfolio Snapshot & Allocation

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agri-business, averaging, cash, correlation, distressed, diversification, emerging markets, Event Driven, frontier markets, Ireland, luxury goods, mobile, portfolio allocation, property, UK, US, volatility

OK, the Olympics are over – time to focus, focus!

And these pleasant late summer markets might soon grow stormy…

So it’s as good a time as any to offer up a current snapshot of my top holdings & portfolio allocation. Let’s begin with my Top Nine holdings, which follows on from my recent H1-2016 Performance post. [In this post/tables, since I made no incremental H1 buys/sells, the average stake for each holding actually equated to my year-end 2015 holdings…so eight months later, an update’s clearly overdue!]:

[Current:  As of CoB 24-Aug-2016]

For your reference, in my last post, I included a paragraph (or two) of updated commentary for each individual holding. I also completed a similar exercise in my Top Tips post back in January. And just for completeness here, I’ll again provide corporate website & Bloomberg links, links to relevant posts/write-ups (remember, good investment theses tend to evolve slowly), plus the closing share price & market cap for each stock:

i) Zamano (ZMNO:ID, or ZMNO:LN) (9.3% Portfolio Holding):

‘Zamano…So, What Now?!’      (NB: First link = most recent post/write-up)

‘Zoom, Zoom…Zamano!’

Share Price:   EUR 0.113

Market Cap:   EUR 11.2 Million

The Inherent Contradictions of My Portfolio (or Who’s The Greater Fool..?) (Part II)

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blue chips, bubbles, bullish, China, don't fight the Fed, Europe, floating world, Greece, Japan, Nifty Fifty, quantitative easing, US

OK, I posted Part I a month ago (and here’s its prequel, Welcome to the Floating World…), so you may want to skim those posts again. [Especially as the world’s changed so much since then…what with the bond markets going crazy, Greece staying crazy, etc. 😉 ] To briefly summarise:

The central banks ‘control the price of money, and everything else is a function of the price of money‘, and post-crisis they embarked upon the greatest price-fixing experiment ever – an echo/amplification of the entire era leading up to the late ’60s/early ’70s. Consequently, sustained near-zero rates has meant there’s a wall of money that’s slowly but surely being forced into the equity market. And just like the early ’70s, investors have & will continue to exhibit a distinct preference for Nifty Fifty stocks, i.e. large cap/blue chip companies which guarantee (or at least offer the illusion of) predictable quality & growth in an uncertain economic & fiscal environment. Small & mid cap stocks may be neglected accordingly, but will probably end up getting dragged higher regardless.

As for liquidity, central banks will basically find it impossible to reverse the explosion in their respective balance sheets…Pandora’s Box is now open. And GDP growth may prove irrelevant – since positive/accelerating growth is likely to underpin/encourage market sentiment & valuations, whereas weak/negative growth will simply elicit fresh expectations of central bank stimulus. Most of all, regardless of potential rate increases (or bond market volatility), the absolute level of yields means stocks will arguably remain cheap at any price…

But I really don’t have to make the argument: If/when this bull market keeps marching higher, I have no doubt we’ll be spoon-fed all the erudite & compelling arguments we need to justify it, ’til investors can no longer help themselves & inevitably turn the market into a self-reinforcing bubble. I’m not saying this is necessarily a logical process (what bubble is?!) – but I am saying it could easily happen, plus I’m also saying it could well turn out to be unprecedented…

 [Again, it’s worth remembering two recent & very relevant quotes:

Buffett – ‘Everything is a function of interest rates. Interest rates are like gravity.’

Tepper – ‘Don’t fight four Feds!’]

So, what are the implications for my portfolio?

Portfolio Allocation (XIV – Emerging & Frontier Markets)

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agri-business, correlation, corruption, developed markets, Donegal Creameries, emerging markets, Europe, financial crisis, frontier markets, German property, Japan, portfolio allocation, portfolio performance, QE, US, volatility

Continued from here. Wow, it’s been a leisurely journey – spanning a full year – is this really my last post of the series?! Hmmm, we’ll see… Here’s my portfolio allocation pie chart one more time:

[NB: This is from Jun-2012, but since then the only major changes (funded mostly from my Hedge Fund allocation) are: a) an increase in Property from 10% to 13%, as I continue to scale up my German property exposure (see Parts I to V – also here), and b) a large jump in Agri from 5% to 11%, due to my purchase of Donegal Creameries (DCP:ID) & its subsequent hefty appreciation. Note I don’t classify DCP as an Irish stock – after all, the company feeds people (potatoes, mushrooms & yogurt) and animals, what could offer a more ideal uncorrelated exposure?!]

So, Where’s The Bloody Inflation..?!

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baby boomers, banks, Bernanke, budget deficit, capital ratios, de-leveraging, debt monetization, Debt/GDP Ratio, ECB, Europe, European sovereign debt crisis, Fed, financial crisis, fiscal deficits, Flub-Med, GDP growth, Hunt brothers, income/dividend bubble, inflation, Japan, multiplier effect, Occupy Wall Street, politicians, quantitative easing, real assets, risk aversion, savings rate, stagflation, US, Volcker

I was beginning a new post in my recent Hitting the Century series (and here), and realized my next 3 investment allocations were to real assets – Natural Resources, Agri & Property. This v quickly got me thinking about inflation, enough to devote myself to this post instead:

Along the way, dear reader, you may have noticed my pronounced distaste for fiscal & monetary policy in the developed world. Particularly in the US... That’s not intended to be a US slap-down…and certainly not praise for Europe either! It’s simply a pretty inescapable conclusion if you compare the US & (the hard-core of) Europe over the past 4 decades. Jesus, I struggle to think of somebody with any real power in the US who truly gives a flying f**k about their accelerating debt burden, debt monetization, or the long-term external value of the dollar. In contrast, the ECB & certain Eurozone countries still actually exhibit a painful reluctance to take that road to monetary & fiscal oblivion – even in the face of a European sovereign debt crisis!

A Greek Tragedy…?

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austerity, Big Brother, budget deficit, citizenship, Debt/GDP Ratio, default, Europe, European sovereign debt crisis, Greece, Occupy Wall Street, politicians, remittance economy, tragedy of the commons, US, venality

Two key (related) themes echo through recent articles about the Greek sovereign debt crisis. I’ve the distinct & nagging feeling something’s missing here? Hmmm… Anyway, the first theme is the expression of outrage at Greek politicians, their profligate ways and their general shiftiness. Sure, it’s always fun to criticize politicians, but why bother really? What exactly did you expect of them? I’m bemused by the air of superiority displayed in some articles – nah, nah, nah, my politicians are better than yours! Rubbish, there’s nothing unique about Greek politicians in a global context – they’re just a little further down the road to hell…

Let’s think about what makes them tick: Well, they say politics is an unpredictable business – true, you just can’t second-guess stupidity sometimes. But otherwise, you mostly just need to consider the actors’ motivations. Depressingly, this seems to boil down to Money, Power, or both! OK, Duty’s another possibility – reluctant leaders are often the best leaders. But how often, in the past decade or two, have you seen a politician consistently serve out of a clear sense of duty?

Whither the US, Europe & the EUR/USD..?

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activist investors, austerity, Bundesbank, catalyst, CNBC, distressed assets, Edward Gibbon, emerging markets, EUR/USD, Europe, Event Driven, Fed, frontier markets, idiots, Japan, Japanese debt crisis, NAV discount, private equity funds, Red Bull, student debt, US

OK, I confess, this isn’t really about the EUR/USD FX rate. I was beginning another article, and my despair over the developed markets & their prospects just kept interfering..! But let’s try keep this somewhat brief – maybe I’ll return again after reading my Gibbon – and hopefully it will prove a good lead-in for my other article.

Despite the dismal performance in the US & Europe (why even talk about Japan..?) over the past decade, I just can’t get too hopeful from here. I sighed, and resolved again to just ignore the news, when I heard the growing swell of anti-austerity political dissent in Europe (and even fresh mutterings about EUR exit, and devaluation).