Vladyslav Koptiev
Vladyslav Koptiev @AtlasCapital
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Monthly review - October 2019 Results achieved in October can be described as very satisfactory. Portfolio gained 4,6% versus 2,2% gain for $S&P 500 index. I will be happy to see such results every month, but this is not likely to happen unfortunately. I believe that maximum excess which any individual stock investor can achieve over S&P index is around 10% (evaluation should be performed over the period of 3-5 years and preferably more). Further, such excess can only be achieved by “value” investors, able to identify companies selling at significant discount to its intrinsic value. Portfolio reconstitution Recent removals and reason: $PNDORA.CO (Pandora A/S) (cyclical sector, valuation, absence of moat) $CVS (CVS Health Corp) (valuation) Also opened new minor positions in crypto, which I do twice per month just to have some exposure, however crypto will never represent significant part of my portfolio, because of it’s non-productive nature. New positions till today: $VIA $ALB (Albemarle Corporation), $BIG (Big Lots Inc), $PAGP (Plains GP Holdings LP) . All companies possess certain moat in my opinion, belong to various sectors and are highly undervalued. These transactions helped to improve diversification slightly. Concentrations in portfolio don’t bother me at all, but some kind of diversification is required. In my opinion up to 10 companies in portfolio of knowledgeable investor is good enough. Next 10 potential holdings: $TEN (Tenneco Inc), $TTM (Tata Motors Shs Sponsored American Deposit Receipt Repr 5 Shs) (TATA MOTORS), $GSH (Guangshen Railway Co), $BT.L (BT Group) (BT Group PLC), $LTHM (Livent Corp), $TEF (Telefonica SA (US)) (Telefonica SA), $WPP.L (WPP) (WPP PLC), $INGR (Ingredion Inc) (Ingredion Inc), $PSG.MC (Prosegur Compania de Seguridad SA) (Prosegur Compania De Seguridad SA), $WCC (WESCO International Inc) (WESCO International Inc). If you want to know more about moat definition, take a look at this small wonderful book by Pat Dorsey, “The little book that builds wealth” or else check this article if you don’t have much time www.toptal.com/finance/business-model-consultants/economic-moats. Current stock market valuation $SPX500 $IWM In my opinion we are moving to the end of economic cycle and valuations are high. One might have a look at ratio of market capitalization versus GDP, currently at 145.6%, which is only lower than 148% existed in 2000. I also monitor Leading Economic Index® (LEI) for the U.S. issued monthly by The Conference Board. Contraction during 3 months in a row indicated recession during 2008 financial crisis. Nevertheless, this update can not be considered as prediction, since I don’t have the faintest idea what the stock market is going to do in the next year or two. Worth mentioning once again that short-term movements are of no interest for me, except may be to consider increase in position size. Finally, I would like to present updated performance chart. This will help you to understand where you could be, if you had started copying me from the beginning of portfolio history. Cordially, Vlad Koptiev ... Show More