Updated: Feb 7
Many of You have been praising the resilience of our portfolio in both good and bad times. Last month, when we recused risk, had quite a bit of cash, and went extremely diversified, having added smaller cap stocks, we generated 20.34% with Risk Score 3. When the cyclical started growing in November, we generated 26.25% - given our well-diversified portfolio of mainly undervalued stocks. Perhaps most importantly, our portfolio is growing virtually every day, regardless of market performance, which to me is one of the most important factors. Now, let us look at some of our diversification in more detail.
𝙀𝙦𝙪𝙞𝙩𝙮 𝙚𝙭𝙥𝙤𝙨𝙪𝙧𝙚 𝙞𝙣 𝙩𝙝𝙚 𝙐𝙆 🇬🇧
We have built quite a bit of exposure to the UK at prices that were/are extremely attractive. Aston Martin (current value 2.79%), Investec (3.10%), Micro Focus (2.55%) National Express (1.02%), Go Ahead (2.05%) have been a big part of the portfolio and all of them contributed c.100% except Investec. We have sold Capita with great profit and are now back at very interesting prices with 2.29% of portfolio. We also hold Shell at 1.18%. Our favourite undervalued stock now is KIER with 5.69%. Total of UK exposure adds up to 20.67%. Again, we see it as the most undervalued market in the world, because of or perhaps thanks to - the pandemic and Brexit problems.
𝙀𝙦𝙪𝙞𝙩𝙮 𝙚𝙭𝙥𝙤𝙨𝙪𝙧𝙚 𝙞𝙣 𝙀𝙪𝙧𝙤𝙥𝙚 🇪🇺
Being quite skeptical about prices in the US, we have historically preferred Europe. AMS.ZU is our 3d biggest position with 3.1%, Porsche has been the biggest position for most of the time, currently at 2.3%. We also have Tecnicas Reunidas in Madrid at 1.82% as well as Melia at 0.84%. We used to have Vonovia, Credit Suisse, SES, and few others but closed them in profit, often having held them for more than 6 months. We have Takeaway (1.09%) and OCI in the Netherlands as well at 0.48%. Total exposure in Europe (outside UK) - 9.63%
𝙀𝙦𝙪𝙞𝙩𝙮 𝙚𝙭𝙥𝙤𝙨𝙪𝙧𝙚 𝙞𝙣 𝙃𝙤𝙣𝙜 𝙆𝙤𝙣𝙜 🇭🇰
To be sure, we have also built (and took profit since) an exposure on the HK stock exchange, as we believe in the potential of this market. We even did quite a lot of profit on $HKG50 and the remaining exposure is standing at 2.38%.
𝙀𝙦𝙪𝙞𝙩𝙮 𝙚𝙭𝙥𝙤𝙨𝙪𝙧𝙚 𝙞𝙣 𝙍𝙊𝙒 🌎
India is our 4th biggest position at 3.17%. We have Brazil ETF at 1.19% and its big food processing company BRF at 0.85%, bringing the total to 2.04%.
Apart from long equity exposure, we also built short positions in order to further improve our risk management and protect the portfolio from downturns. Currently, we have VIX at 2.32%, DDD at 1.42%, TZA at 1.35%, SQQQ at 0.96% and Netflix at 0.52%. Please note that the ETFs are creating a leveraged inverse correlation to $NSDQ100 or $SPX500 Total (not including leverage) exposure at 6.57%.
Currently, we just have 0.07% exposure to $MIOTA with c.66% gain, but we also used to hold $XRP and short Bitcoin. We are not experts here, but encourage everyone to diversify, especially those who hold only cryptos should get an exposure to a well-diversified equity portfolio.
𝙀𝙦𝙪𝙞𝙩𝙮 𝙀𝙭𝙥𝙤𝙨𝙪𝙧𝙚 𝙞𝙣 𝙩𝙝𝙚 𝙐𝙎 🇺🇸
Finally, by far the biggest market in the US. We hold behemoths such as ET at 2.99%, American Airlines at 2.87%, PTON at 2.56%, CNC at 1.96%, Fedex at 1.75% and BABA at 0.78% (could be counted in Asia as well), CIti at 0.41%. Big Cap exposure at 12.91%.
Small Caps include our biggest position - TRXC at 5.84%, BNGO at 2.58%, Nikola at 1.72%, Bropbox at 1.24%, Athenex at 1.26%, Reta at 0.79% Total reaching: 13.43%
Penny stocks include our recent sensation BOXL at 2.97%, INPX at 2.16%, COCP at 1.39%, HTBX at 1.28%, as well as TBLT at 0.57%. Total: 8.37%.
𝙀𝙏𝙁𝙨 𝙖𝙣𝙙 𝘾𝙖𝙨𝙝 💰
Apart from direct equity exposure, we have 17.27% exposure to ETFs. Many of them have already been mentioned (shorts, India, Brazil) but we also have ETFs such as HMMJ (at 2.18%) that provides us exposure to Medical Marijuana, ARKK (at 1.05%) that invents in innovation, or KRE (at 1.02%) that encompasses banking sector.
Last instrument is cash at c.17%. We usually have between 10 and 30% in order to benefit from the best opportunities on the market, also - and especially so - during market downturns.
In conclusion, the above portfolio took a lot of hard work and analysis to create and we are now enjoying the dividends of careful stock-picking across geographies, industries, and instruments. We did hold FX, USD, and Commodities and will perhaps build them back into the portfolio going forward.
Enjoy and let me know what you think!
PS. All my investments and portfolio are public. To join eToro please follow the link: https://bit.ly/3i7Yo3C