Portfolio development: status of securities

After several weeks of reorganization, I am finally able to present below a first version of my new portfolio. Some adjustments are still necessary, but let's say that I am 75% away from my objective. I still have a few overvalued stocks or those that no longer correspond to my security criteria. I also and above all have a lot of cash left to invest (around 30%). As I have already mentioned in my previous articles, these reserves do not represent a long-term strategic allocation. It's just that I can't find much worth buying at the moment.

As you can see, the US part of my portfolio has melted like snow in the sun. There are only a few representatives of my famous "Global Dividend Growers" left, such as LOW and MMM which are nevertheless on the rise, HRL which is still holding up quite well or the unbeatable VFC. There are also the survivors of the "Ex-US International Dividend Stocks" such as BELL, EMMN, also untouchable. In the "Smoking & Drinking Dividends", there remains British American Tobacco, which I already had with the ticker BATS, and which I now also have with the ticker BTI following the sale of my former possession of Reynolds (which I had itself inherited from Lorillard). BATS/BTI are also in the hot seat. Still in this strategy of vice, I still have VCO, which is on the other hand in a fairly strong position. But apart from that, it's a big clean-up, especially for American titles, which have become really too expensive.

On the contrary, the portfolio has shifted to the East, that is to say to Europe and Asia, in particular Japan. This is the only place where we still find clearly undervalued stocks. In terms of sectors, finance, almost absent from my old strategies, is making an appearance, with a few banks and insurance companies. It is not that I am a big fan of this sector, but it must be recognized that the fundamentals are not too bad and these stocks are still shunned by the market, following the chaos they caused 10 years ago. A few ETFs are also making their appearance to diversify the portfolio's assets, thanks to long-term bonds and gold, in accordance with my article dedicated to this problem.

Despite this major shake-up, I remain faithful to my basic principles since almost all securities pay increasing dividends. There are nevertheless a few small exceptions. The ETF that replicates physical gold does not pay any. This is not too serious because the position is small (5% of the portfolio) and I use it only to hedge (and buy back securities that pay increasing dividends if the market collapses). In the same style, the ETF composed of long bonds pays distributions, but they are not increasing. Here too the position is minority (10%) and it mainly serves as a hedge (with coupons as a bonus). In the securities themselves, there are 4 exceptions. Three of them represent very small positions (2x in Hong Kong and 1x in Germany) and are "cigar butts" according to Graham. As for the last title that does not generate income, we will say that we forgive it easily since it is BRK, W. Buffett's company. Since the profits are reinvested in a more than intelligent way, we are willing to turn a blind eye.

Given the significant amount of research and portfolio reorganization that this represented, I was not able to present to you as I went along the reasons for the purchases/sales of all these stocks. Now that the bulk of the work is done, I will take more time in the future to explain the different transactions and present the company analyses. Among the stocks purchased, some have already made significant progress, such as NRS. We can therefore legitimately ask ourselves whether they are still affordable. However, given that I took particular care to take a significant margin of safety, I am of the opinion that the potential for gain is still very much present (NRS is still at less than 10x earnings for example).

The weightings of the positions are not equivalent. Typically, Japanese small caps are invested with amounts that represent between half and a third of the other companies. 59% of the portfolio is invested in Swiss securities, 26% still in US securities (but it will continue to fall) and 9% in Japan. I think I will continue to increase the share of investments in this country a little, given the very attractive valuations of the companies, but I am not going to invest there massively either, at least for the moment, given what is happening in Korea. With the two lunatics Trump and Kim you never know what can happen...

Finally, let us note that I continue to take positions from time to time in the direction or against the market, with or without leverage, according to the principles of my old strategy (Trading Auto Signal). From time to time I will share them with you. This is also what led me to issue a short-term warning on the American market in my last monthly allowance post. With the short-term correction having taken place, I am closing my inverse position today, as soon as Wall Street opens.