A lot of work for nothing..

I noticed over the past months that a lot of my initial holdings, from when I started the blog has been performing extremely well. I always try to evaluate if what I have been doing make sense, or if I should change my investment strategy. So I decided to check, how well has my starting portfolio done in comparison to my real portfolio? In my real portfolio (as you know) holdings have been sold, trimmed and a lot of new holdings have come into the portfolio. Has all the work of throwing out old investment cases and adding new ones added significant amounts of alpha, or has it even been destructive?

My assumption is that I just hold the starting portfolio from March 18th, 2016. Since one of my holdings, SAFT was bought by Total, that holding is just placed in cash. Because of this cash levels will be high and on average at similar levels to my real portfolio.

Starting Portfolio

Starting_portfolio2016

So how will this starting portfolio hold up against all my “clever” moves where I took profits in some holdings, cut my losses in others and found new good investment cases?

Graph_20171105_RealvsStart

Somewhat crushing results, where I’m exactly neck and neck with my starting portfolio. Looking at risk adjusted returns I’m slightly slightly ahead. My real portfolio had a standard deviation of 12.4% versus the starting portfolios 13.6%.

How the result was achieved for the Starting Portfolio

StartingPortfolio_Performance

What happened?

Basically the explanation is that I made the mistake of selling two holdings that did extremely well after I sold. Zhengtong Auto and Highpower International. I didn’t have the staying power and bought into other holdings that did well, but not nearly as well as these two. Other than that, I made the right decisions, exiting many of my other holdings like SAS Preference shares, Criteo, Ctrip and MQ holding, all four under-performing quite a lot.

But how ironic to end up in the same place after 1.5 year of struggling to beat the benchmark. Hopefully I at least learned a thing or three, that’s the main point of all the hard work..

 

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Dairy Farm logo

Portfolio changes – Dairy Farm & Ramirent

Ramirent out

I continue to rotate my portfolio away from cyclical companies to safer quality havens. Ramirent has been riding the cyclical construction boom in the Nordics. I believe we are seeing the very last legs of that. Especially in Sweden construction could very soon come to a halt with daily articles commenting on the property market. This is something I have analyzed closely myself and I have seen the signs for quite some time. So I’m a bit disappointed that I didn’t manage to exit Ramirent when the stock was trading at least one EUR higher, but here we are. I kept this holding since I started the blog, to avoid the risk of follow this cyclical company all the way down again, it’s time to sell. So as of today’s close I sell my full holding in Ramirent.

Dairy Farm

I actually started to research this investment thanks to a comment I got from on of you readers. The question was if I have looked at Jardine Matheson Group. My answer at the time is that its a very complex conglomerate to research, because it contains so many different types of exposure. One of the core holdings of the Jardine Group is called Dairy Farm and as many of Jardine’s holdings it is separately listed. It’s name might lead you to the wrong conclusions, it’s not a milk company of any kind, but a diversified company of Asian retail stores, mainly focused on food. It might come as a surprise for some people living in Asia that this company is the owner of so many famous retail stores for the Asian region. Dairy Farm operates supermarkets, hypermarkets, convenience stores, health and beauty stores and home furnishings stores under all these well-known brands:

DairyFarm_companies

I have been trying the last few weeks to enter this stock at a more attractive level, but failed to find/time any weakness. Therefore I took an initially smaller position of 4% in this company at today’s close, with the possibility to add in-case I see any short-term share weakness. This is not a cheap stock, but a quality company that I intend to hold for the very long term. It has good exposure to the growing middle-class in Asia. A full analysis will follow at a later date.

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