Performance for the first half of 2018

/ By / Portfolio / diversification, HRL, walk, investment, actions / 30 Comments

The performance in CHF of the portfolio for this first half of the year amounts to -0.3%. The portfolio has outperformed the market (SPI -3.95%) during this first half of the year, with significantly less volatility. Cumulatively, this brings us to an annual profitability since launch (03.02.2010) of +8.5% (compared to 7.4% per year for the Swiss Performance Index).

There are several things that explain this relatively good performance in a rather turbulent market. First of all portfolio allocation, diversified across several asset classes, including equities from several countries, with an overweighting towards those that are cheap and following an upward trend. Real estate and gold during this first half also helped maintain correct volatility even though the stock market was quite choppy, particularly in February.

More generally, the focus on stocks that are shunned by the general public, including many small Japanese companies, has allowed us to generate nice gains, even if some of these stocks have also suffered fairly significant losses. Therefore, to limit this problem, I have introduced during this last semester a stop-loss procedure, which also helped reduce the overall risk of my portfolio.

Finally, I have also started using in recent months a more quantitative approach. The stocks selected on this basis have allowed me to achieve nice results. For the moment this strategy only represents 10% of my portfolio, the impact in terms of performance therefore remains discreet, but it is possible that in the future I may decide to increase this weighting somewhat.

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Asset allocation and the stop-loss procedure have the consequence that today my share of cash is quite large (25%). Even if I am not a big fan of liquidity, which does not bring in any income, I tell myself that in these times it is perhaps not so bad to have quite large reserves.

Currently my portfolio, with 77 positions is a little too diversified for my taste. I will continue to lighten it because we know that beyond 50 positions there is no longer any positive effect in terms of diversification.

Portfolio positions:

NameSymbol
Allianz SEALV:FRA
Asia Cement (China) Holdings Corp4OJ:FRA
Cantonal Bank of ValaisWKBN:SWX
BCVs/WKB (LU) Flex Conservative CHFLU1236092711:CHF
BCVs/WKB (LU) Flex Opportunity CHFLU1236092984:CHF
Bridgestone CorpBGT:MUN
Broadcasting System of Niigata Inc9408:TYO
BVZ Holding AGBVZN:SWX
Cabbeen Fashion Ltd2030:HKG
China National Building Material Co Ltd3323:HKG
China Oriental Group Co Ltd581:HKG
CTI Engineering Co Ltd9621:TYO
Daiichi Co Ltd7643:TYO
Delong Holdings LtdBQO:SES
Exor NVEXO:MIL
Fenwal Controls of Japan Ltd6870:TYO
Fiat Chrysler Automobiles NVFCA:MIL
Fukuda Corp1899:TYO
Funai Electric Co Ltd6839:TYO
Furuno Electric Co Ltd6814:TYO
Griffin Mining LtdGFM:LSE
Hagihara Industries Inc7856:TYO
Himaraya Co Ltd7514:TYO
HollyFrontier CorpHFC:NYQ
Hormel Foods CorpHRL:NYQ
JXTG Holdings Inc5020:TYO
Kaga Electronics Co Ltd8154:TYO
Kaneko Seeds Co Ltd1376:TYO
Kanemitsu Corp7208:TYO
Kathmandu Holdings LtdKMD:NZC
Kohls CorpKSS:NYQ
Kyowa Leather Cloth Co Ltd3553:TYO
Legal & General Group PLCLGEN:LSE
LK Technology Holdings Ltd558:HKG
Macy's IncM:NYQ
Mercer International IncMERC:NSQ
Mitani Corp8066:TYO
Mobimo Holding AGMOBN:SWX
Narasaki Sangyo Co Ltd8085:TYO
Orior AGORON:SWX
Osaka Organic Chemical Industry Ltd4187:TYO
Otec Corp1736:TYO
Rasa Corp3023:TYO
Rottneros ABRROS:STO
Safetec Co Ltd7464:TYO
Sanyei Corp8119:TYO
Shinnihon Corp1879:TYO
Shizuoka Gas Co Ltd9543:TYO
Showa Corp7274:TYO
Sinotruk Hong Kong Ltd3808:HKG
SSAB ABSSAB A:STO
Stuart Olson IncSOX:TOR
Subaru Corp7270:TYO
Sumiken Mitsui Road Co Ltd1776:TYO
Sumitomo Mitsui Construction Co Ltd1821:TYO
Swiss Life Holding AGSLHN:VTX
Takebishi Corp7510:TYO
Teck Resources LtdTECK.B:TOR
Tianneng Power International Ltd819:HKG
Tigers Polymer Corp4231:TYO
Toho Acetylene Co Ltd4093:TYO
Tomoku Co Ltd3946:TYO
Toronto-Dominion BankTD:TOR
Transcontinental IncTCL.A:TOR
Triple-S Management CorpGTS:NYQ
TS Tech Co Ltd7313:TYO
Tsubakimoto Kogyo Co Ltd8052:TYO
UBS ETF (CH) – SXI Real Estate® (CHF) A-disSRFCHA:SWX:CHF
UBS Group AGUBSG:VTX
Valiant Holding AGVATN:SWX
Vaudoise Assurances Holding SAVAHN:SWX
Wakachiku Construction Co Ltd1888:TYO
West Fraser Timber Co LtdWFT:TOR
Xiwang Special Steel Co Ltd1266:HKG
Yamau Co Ltd5284:TYO
Yanzhou Coal Mining Co Ltd1171:HKG
Yutaka Giken Co Ltd7229:TYO

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30 thoughts on “Performance du 1er semestre 2018”

  4. dividinde

    GAM issues profit warning and drops 15%. Dividend yield jumps to 5.75%.

    Idiot trap or opportunity to seize?
    Will the dividend be maintained or reduced?

    Reply
    1. Jerome

      Stupid trap because:
      – very negative momentum (falling knife)
      – price/sales ratio of 3.72 = sell signal
      – current payout ratio compared to profits of 82% and compared to FCF of 75% => dividend can be maintained but becomes risky if the fundamentals continue to deteriorate, as has been the case for several years
      – good but declining cash reserves and margins
      – low and declining profitability
      – priced much too expensive overall (relative to earnings, sales, FCF and tangible book value)

      On the positive side, we should nevertheless point out:
      – franchise characteristics (good margin, increasing goodwill, low debt, low capital expenditure)
      – number of shares outstanding down

      Reply
      1. dividinde

        How right you were: a real fool's trap! Thanks again for your wise response!
        GAM fell today (and for the second time this month) by more than 20% during intraday trading.
        In addition to the rotten half-year results, the company announced the suspension of its investment director, who is the subject of an internal investigation...
        Needless to say, it really stinks and one wonders what other corpses they are going to pull out of their closet.
        I'm glad I didn't jump on this stock 2 weeks ago. I wondered today if the stock wasn't a great opportunity to grab at this price, but I backed off again because I feel the management doesn't deserve my trust and I think more bad news is coming.
        And too bad if I miss a big price increase, GAM has today become an object of speculation and not a reliable investment like I am looking for.

      2. Jerome

        You're welcome 😉
        When a plane starts its descent, it always ends up on the ground… I learned that the hard way thanks to Swissair at the time. A few thousand francs lost at the time, but so many more thousands of francs gained later 🙂

      3. dividinde

        And the bad news continues: GAM announced this morning the suspension of one of its funds. The share fell again by 14% and is now worth only 8.60 CHF!

        I wouldn't be surprised to see the stock at 1 franc or 10 cents within 12 months before being delisted.

  5. dividinde

    You're probably right, the fundamentals aren't great. On the other hand, this sector is very cyclical and the best time to invest in financials is often when there is only bad news. That's what makes me hesitate to buy a small slice.

    Moreover, when you look at the charts of GAM or UBS over the last 10 years, you see that these 2 stocks are evolving roughly in a channel between approx. 10 and 18-20 fr. and that the only interesting moment to buy them is when they are in the lower part of this corridor.

    Reply
    1. Jerome

      Nothing prevents me from following several strategies at once. It's even better! As long as each of these strategies is coherent and effective.

      Reply
  6. Fathi

    Hi, I am learning to trade (scalping) and I am looking to contact people who are also passionate about trading.
    I am also from Valais, GRANGES side, commune of Sierre.

    Reply
  7. Philip of Habsburg

    I think I'm tired of owning tech stocks (FB, Google, Amazon).
    I'm waiting for the last rally this week and I'm selling. Their logarithmic progression is starting to stress me out!

    Reply
  8. dividinde

    Yes, this beating is impressive! And at the same time quite logical after months of outperformance of the technologies.

    Reply
    1. Jerome

      And absurd valuations. New techno bubble crash?
      It would bring back bitter memories.
      And last time the rest of the economy followed…

      Reply
  9. dividinde

    Let's hope it doesn't end like last time...

    Another topic: Julius Bär is not particularly cheap, but the quality is there. Are you a buyer?

    Reply
    1. Jerome

      Not too much of a fan:
      Current PE is quite interesting, but if we take the average PE ratio it is expensive.
      Negative FCF
      Dividend yield not bad, relative to current earnings, but poor relative to average earnings and FCF (current and average).
      High and increasing debt ratio.
      Number of shares outstanding up.

      Reply
  11. dividinde

    … GAM now costs only 5.50 CHF. This descent into hell is incredible! In my opinion it stinks more and more of bankruptcy, the company will never manage to regain the trust of customers and investors that it has wasted so stupidly.

    Reply
  13. AGU

    Sumitomo… you have it too and Buffet is getting in. You are going to make great strides towards independence, excellent Japanese investments, well done 😉

    Reply

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