With the Federal Reserve signalling that they intend to lower interest rates in the very near future, I thought I would do a quick mind map and scratch what the impact would be on the types of investment decisions I would make going forward.
With commodity prices falling off and the Federal Reserve signalling they will pause on future interest rate hikes, the dynamics of a falling US$ and rising commodity prices including oil could be in play. I decided to do a quick analysis of CNQ which is considered among the big players in the Canadian Energy scene to see if there may be an opportunity to jump in.
With commodity prices including copper falling, I thought it might be a good time to take a look at some copper stocks. Southern Copper was one I've owned in the past so I thought I'd check in and see if there may be an opportunity to buy in.
April 2019 - Sold shares in SCCO for 18 percent gain
Luxury retail stocks were taking a pounding along with the broader market. Stocks like Tiffany had been falling from the $140’s to the mid $80’s. Tiffany is a stock I’ve held in the past and had on my watch list to look at if it were ever to fall back. So with the tumble I did a quick analysis to see if there is an opportunity to jump in.
March 2019 - Sold shares for 18.9 percent gain
One of the most under performing asset classes so far this year has been German equities. As of this writing, German stocks were down over 20 percent year-to-date. Everyone complains about the weakness in the Dow Jones indexes, but the German markets have been in a serious downfall. This despite some of the most well-known and dominant global companies like Daimler Benz and Seimens. The German economy is the enginge of Europe and the opportunity to get exposure to that market at a 20 percent discount was appealing to me. I decided the best way to get the exposure was to passively own a basket of German stocks and that led me to evaluate some German equity ETF’s. In this mind-map video I walk through my analysis of several German equity ETF’s.
Oil prices have been nose diving in the past few months and along with it oil stocks. I thought it would be a good opportunity to do some due diligence on some oil stocks to see if there were some opportunities to buy low. Instead, I decided to have a look at some ETF’s to see what if that may be a better road. In this in this mind map video I share my analysis and review of several energy ETF’s.
With Emerging Market stocks taking a hit, I thought it would be a good time to explore building up a position in the sector. In the video I evaluate several ETF's to determine which would be an appropriate one to add to my portfolio.
I’ve owned Las Vegas Sands in the past and it has been good to me. I’ve also sold it prematurely because of some questionable financial reporting treatments that didn’t sit sell with me. With the stock down near 14 percent this year and at a 52-week low, I thought it may be worth revisiting it to see if anything with the company has changed. As from my position in MGM, many of the fundamentals with LVS are quite similar. The question is how are they performing. I put together a mind map video and podcast where I apply my 8 Questions framework and see if indeed an opportunity is at hand.
This decision was also a very difficult one because there is also some politics at play here.
I continue on with my analysis of video game stocks with a quick dive into Take Two Interactive. They are known for their Grand Theft Auto franchise.
When I was a kid I spent a heck of a lot of time playing video games. I’m totally dating myself here but I had at one point an Intelivision which as the time had the coolest sports games and also a Sega Genesis where I got my first look at Madden Football. Over time I ended up getting Playstation and a Wii but I hardly used them like I did back in the day. Beyond this, I really didn’t know much about video games, but wow have things changed. I had no idea how much of a following games have. The big reason is the ability to play the games online has allowed all sorts of competition. You can literally play anyone anywhere on the planet. To my surprise there are all kinds of tournaments and leagues that have sprouted up and the big one’s offer serious prize money. The other part that floored me was how many people actually will watch other people play video games. The Overwatch League finals were played at the Barclays Center in New York and the arena was sold out! The more I read about it, the more I looked into it. I evaluated a few of the big name game companies which you can find in my Mind Map video pages. I ended making a move and picking up some shares in Activision Blizzard. Here is my mind map analysis (podcast) that lead me to my decision.
UPDATE November 2018: As November wore on the stock kept tracking down and soon my loss position was at 25% which meant the stock would have to go up over 30 percent just to break-even. Given the negative sentiment I didn’t see that happening. I had the stock on a tight leash and so with the latest pullback I said that’s enough. As hard as it is to sell, I have to stay true to my investing playbook and when any stock crosses my loss threshold I have to sell regardless of how I feel about it. It feels painful right now but it is short term pain for long-term preservation of my savings. I still like the company and the whole video game/e-sports space, so I’m still going to keep Activision on my watch list and if the stock continues to track lower then I might jump back in if the fundamentals of the business remain intact.
Starbucks stock has been getting crushed the last few months. Weak forecasts, some not so great PR events started taking the stock down. It got me interested to see if it may be worth picking up as it seems to be out of favour by Wall Street. In this video I take a little dive into Starbucks and scratch out my thought process that led me to buy shares in Starbucks.
Fitting into my theme of investing in companies that can own the OS, JD.com is positioning itself to become a real player in online retailing. It has been one of the big players in the China market and it is looking to branch out to other parts of Asia. It is very aligned with other players like Tencent and Walmart and aggressively building out its retail ecosystem channels. The stock has been falling and some say the US trade tariff sabre rattling has put pressure on China stocks. In this video I share my mind map exercise that I used to evaluate and ultimately led to my decision to buy into JD.com.
UPDATE 1: Since I made the decision, some significant news has come out. It was announced that Alphabet had made a $550 million dollar investment in JD. I think its a big deal in that it validates JD's value proposition. JD has now entered partnerships with Alphabet, TenCent, and Walmart. These are companies that are aggressively trying to build out online ecosystems to own the OSfor distribution in retail. Whoever can control that online platform has a good chance at building durable competitive advantage. Whatever happens, JD has connections with all the main players. The Alphabet connection also signals that both parties are looking to take on Amazon.
UPDATE 2: Since the Alphabet announcement, more events have occurred, specifically from the Mad King himself, who pondering restricting Chinese companies from investing in American technology companies. I wonder now if the JD/Alphabet partnership is now in doubt given the Eye of Sauron is now looking upon China quite aggressively. I cite the potential of a tariff tit-for-tat as serious risk factor that could negatively impact JD.com and other China stocks.
UPDATE #3: Sold shares in JD.com (Ticker: JD) for 28.5 percent loss (Net Forex). This was a tough one. I still think the fundamentals of the business are quite solid as they are aggressively positioning themselves being the OS for retail in China and Asia. They have aligned themselves with some heavy weights (Walmart, Tencent, Google) to build out a formidable retail ecosystem.
So what changed my thinking? Math. The stock fell through the $30 level and my loss position was well over 20 percent. Basic math tells me that the stock would have to pop back over 25 percent to just get to break-even, which given the volatile nature of the stock is quite possible.
The other factor comes to governance. Richard Liu the CEO was arrested for alleged assault and then released in the US in August. He since returned to China. The police said the charges could not be substantiated and so he was released. There have been rumblings that this is not the first time this has happened and so there is a serious cloud on the leadership. Adding to this is that the management structure has been setup so that Liu because of his significant ownership of shares can still run the company. This is a big distraction and I think this will stick to the company.
I was down 28.5 percent which means the stock would have to up almost 40 percent for me to break-even which I think will be pretty tough under this current dynamic. Following my playbook on managing with losses, I decided to sell now and move on. It’s a tough one as at one point the stock was trading in the high $40’s and so I was in a good position. That’s the way investing goes sometimes.
MGM has not been on my watchlist and I really wasn't thinking about getting into casino stocks but a recent Supreme Court decisions that essentially legalized sports gambling in the US I thought was a game changer movement that could really put gaming companies in a strong position to move. I did a quick scan and MGM appeared to be not the most producing gaming company but what drew me was management's foresight to build out sports betting platforms and services in the anticipation of the legalization of sports betting. In this episode I do a quick deep dive that lead me to the decision to buy some MGM stock.
I've had Johnson and Johnson on my watch list for a long time. I've held it in the past and I got a pretty good return on it. After I sold when it was in the $70's the stock kept on moving and literally doubled. I thought I may never get back in but the stock since the start of the year has been falling and it went down into the mid $120's when I thought it would be good to take a look again. In this video I do a quick dive into JNJ to see if it is still worthy to include in my portfolio.
Consumers staples stocks have not been getting a lot of love in the last while. It has been lagging the S&P 500 index for quite a while. This despite companies continuing to generate strong profit and cash flows. I've been motivated to get some exposure to the space, but I just haven't had much time to do a deep dive, so I decided I would instead buy a basket of consumer staples stocks via Exchange Traded Funds. Here is my mind map video where I did a quick evaluation of several prominent US consumer staples ETF's. I apply the concepts I teach in my How To Invest in ETF's course to identify the best ETF for my portfolio.
I've been wanting to get some exposure to health care stocks. Problem with health care stocks, especially pharmaceutical and drug companies is the regulatory burdens of getting drugs approved, limited exclusivity of selling the drug once you've got approval. Figuring out what drug stocks to buy is almost like buying a lottery ticket and I just haven't had a good go of it, but I still want my portfolios to have some meaningful exposure so I thought ETF's would be a better way to go. The drug stocks have been lagging the market lately so I thought this may be a good opportunity to buy in at lower price point. In this video I evaluate several pharmaceutical ETF's and incorporate the teachings from my course on How to Invest in ETF's to figure out which ETF will serve the purpose.
Update - August 16, 2018
I just sold my position for an 18.9 percent gain.
This is my second foray into Southwest Airlines. I bought into Southwest in August 2016 and I was able to generate a return of 25.9 percent. The stock has been tracking down the last few weeks so I decided to take a look again and see if there was an opportunity to jump back in. Even though I’ve analyzed the company, I still ask the same 8 questions about the company.
This is my second time owning Big Lots. I bought in 2011 on separate occasions and earned 21 percent and 9 percent respectively. I kept it on my wish list since because I felt that the discount retail space is a growing one given the hollowing out of the middle class and polarization between high and low income consumers. I never bought back in as the stock really took off and I just thought it became too expensive for my liking. In the last while the stock had been pulling back down from the $60’s to its current level in the low to mid $40’s, which caught my attention so I decided to dive in and take a look at it. Like always my dive into Big Lots involved answering those pesky but important 8 questions. In this mind map video, I walk through my answers that led me to buy shares.
I noticed that Restaurant Brands stock has been tracking down a fair bit. One of Restaurant Brands core assets, aka Tim Hortons has been getting a lot bad press. I was thinking maybe it would be a good time to take a look at the company to see if there was an opportunity to buy in. In this video I scratch out my thought process and evaluation of Timmy's parent company.