odori-park
21
Sep

A Walk Through The Park.. Thoughts On Current Portfolio

After devouring a lightly salted, medium-rare Wagyu steak, I spent a good part of the afternoon taking a stroll through Odori Park, located downtown Sapporo. The Autumn festival has just begun and stalls and stalls of food run through the park, continuing on for at least 5 blocks. The weather now is perfect, and I can’t help but feel nostalgic about the first time I came to Sapporo as an intern at Aegis- an inventory company, which was exactly 9 years ago to the month. I had the best time of my life, and like high school, will never get to experience that twice. In those 2 months I met hundreds, perhaps thousands of people, all through the good grace of my then boss Mr Sato. We spent literally every night out at ‘cabriolet clubs’ and ‘snack’ bars, ‘entertaining’ his associates, and I would return home every night with a mountain of business cards. Whenever I visit Sapporo, I often feel like visiting their office to relive those moments, but never do since I know I wouldn’t be received the same way anymore. Those times were great, but are better off being left just as memories in the ether.

Whenever I go for walks, which is surprisingly very often, I usually take a long route to let my mind wonder. Generally, I think of investments and markets first, as I always have a multitude of ideas juggling around in my head. Nowadays, I think of the long term, as the main portfolio I manage now is built to reap rewards in the months and years to come. People often think long term investing is easy, you just buy a stock and ‘forget’ about it, but things never go according to plan. Even if you are not buying or selling anything actively, you must still be constantly vetting your portfolio, probing it for holes and long term viability. Having said that, my thoughts on my current positioning is as follows:

AMZN: This will continue to run for years. They have their hands in almost every industry, and they are revolutionizing industries slowly but surely. Retail stores and shopping malls are one by one going out of business and you know why? Amazon. They control logistics, retail, entertainment, supermarkets, and web services worldwide, and are even leading many of the new advances in technology. In addition, the data-center overhaul they are currently undergoing from 10g to 40g to 100g ethernet is going to be huge – and expected to reach 800g by 2023. I feel comfortable investing with their management, who works today for results 3 years later, and also feel comfortable knowing no-one can come close to ever competing with them in the foreseeable future.

T: I am not particularly optimistic about telecoms, but they are stable. It is currently trading about 10% higher from where I bought it 2 weeks ago, so I’ll just let it do its thing and collect the dividend. I don’t want to buy any more, or sell here.

IBM: Also a leader in AI with their Watson technology. Not exactly a ‘hot’ stock but I like their stability, dividend yield, and focus in AI. Stock price is at the lower end of the cycle, but will head higher. Buy more on dips, but keep at a small portfolio weighting, as its not a very exciting stock to own.

PEGI: Growing slowly but steadily. Every quarter they raise their dividend. Really like this stock for fixed income. Ideally, it dips down to $25 so I can buy more.

RDS: Oil looks to have bottomed and this is the play. They will be fine even if oil drops lower and performs much better than North American Big Oil companies. Good dividend. Buy more on dips.

I have been contemplating buying IEP as Icahn has been a childhood icon to me and the 11% dividend they pay is insane. However, Icahn is getting old now and I don’t think any successor can re-emulate his success, so for now it’s a no-go.

Granted, there are tons of great companies out there but for now I am content with this portfolio make-up. Long term positions should always be bought in increments, and on dips, and right now everything else I want to buy is not dipping.

I had never been much of a ‘dividend’ investor before, and as a matter of fact use to despise those that opted for fixed income over high beta, thinking that strategy lacked excitement. A decade later, I realize that if you want to create a stable source of income that will grow and last, this is the way to do it. Your decisions today should yield results months or years later. Get rich slowly.