Portfolio changes and Value Investing

SAS Pref – Slicing position

So my biggest position in the portfolio is the SAS Preference shares, this is somewhat of a high yield bond position and therefore has a different kind of characteristics than the rest of the portfolio. For instance the position would lose in value if/when the Swedish Riksbank decided to hike interest rates. I think the position has performed tremendously well, +6% since investment and even more (+7.5%) since I recommended buying the SAS Pref in one of my first posts on the blog. Given the strong performance I decided to slice my position in half as of today and I will soon allocate my money elsewhere. Although I don’t mind keeping a bit in cash after a good run over the last couple of weeks.

Another observation, SAS ordinary is trading at P/E of about 6.5 and Lufthansa P/E is below 5. Either profits are going to come down or valuations up in a not too distant future. If I look at ticket pricing the last 12 months, I’m guessing we as customers are getting a lot of the oil-price decrease. So another reason to stay a bit cautious on the SAS Prefs.

Poor Value investors

An Article has been hitting headlines the last few days talking about Growth vs Value investing:

“Using a formula created by Ned Davis Research that tracks changes in the relative performance between the two styles, growth has been in an uptrend versus value since July 2006, a stretch of dominance that outlasts virtually every other feature in the American stock market. At present, growth’s edge has gone on about three times what it normally has since 1932 and is the longest in history.

In other words, it’s been pretty shitty being a Value investor over the last 10 years. But the bigger point is, maybe now it is time to shine? I for one believe that is the case, and I should try to shift my portfolio more towards Value than it currently is, a deeper dive into this is definitely needed as soon as I can find time.

 

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