Net Worth Update: Q2 ’17

A long overdue net worth update upcoming!

Let’s first feed you some numbers:

As you can see, my portfolio and other funds are listed. My net worth has been increasing considerably last year. See the graph below.

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We see a whopping 40%! increase in net worth. I would sign for that percentage for all the upcoming years…

This means I’m well on my way to reach my Goals of 2017.

Concerning my Financial goals by age 25: I’m at 55,76% of my net worth goal of €250K.

How’s your NW developping?

 

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New buys Q2 ’17

Brace yourselves, new positions incoming!
The new additions to the portfolio which were made during Q2!

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1) Scandinavian Tobacco Group: 170 shares. Cost basis: €2,488 . This is a Danish, rather small tobacco company which focuses on high quality, pipe tobacco. It’s no mass production but more for a middle- to high class public who know how to appreciate a good tobacco product.

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2) AB Inbev: additional 50 sharesCost basis: €5,366. I racked in some nice profits from a bold short put. I decided to reinvest them mostly in the company.

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3) Euronav: 100 additional shares, cost basis: €712. An oil tanker company of whom I had bought 100 shares when I started investing but they went downhill after the oil price drop. The company trades at around 25% discount to their book value and the management is doing good things, in my opinion. When the oil market starts to rebound, they will profit.

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4) 300 Ahold Delhaize Turbo’s @ stoploss 15,1Cost basis: €1,296. I bought them right before the Amazon-Whole Foods take-over which proves again that markets can’t be timed. This was a bold move to play on a temporary undervaluation and to rack in some quick profits. I couldn’t believe my own eyes when the stock took a deep dive after the Amazon news. This position will be closed when it rebounds. I need the money for other purposes, see later on. However I still think that Ahold is worth at least €20 a share, patience will reward.

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5) Bpost SA: 90 sharesCost basis: €2,065. This is comparable to UPS or another post/parcel delivery service. They are a Belgian dividend cash-cow and trade at very fair multiples.

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6) Resilux: 20 shares for a grand total of €3,042. This is a Belgian small-cap company that produces PET-forms for the consumer industry. They are quite small and therefore not influenced by big funds or investment companies, which I like very much. Attractive valuations and a family owned business. Buy tip! If I would have more cash, I’d for sure buy extra shares of them! In the next months they will distribute €16,30 per share in cash to the shareholders, tax free.

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7) Norcros PLC: 1,750 shares for a total of €3,536. The Company offers mixer showers and accessories; tile and stone adhesives; taps, bathroom accessories and valves; bathroom furnishings; ceramic wall and floor tiles; kitchen sinks; tile adhesives, pourable floor coverings and tiling tools through its United Kingdom and South Africa business. (source: google finance, it was pretty accurate). They are a small firm with a high cashflow and small market cap. There are some questions about their pension deficit but after some homework it was proven to be a non-issue. They are pretty undervalued and have the capability to expand in the future.

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8) LyondellBasell NV: 30 additional shares, cost basis: €2,235. This NYSE traded company stays an unpopular chemical company and is just unloved by Wall Street. It is however interesting for European investors because we don’t pay US or NL taxes on dividends. It has a troubled history concerning their bankruptcy in 2010, but those worries are part of the past and I think they are a very profitable business with capable management and good investors (Leo Blavatnik).

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9) General Mills: 72 shares, cost basis: €3,670. This is a $30 billion U.S. consumer foods company which raised many childs and adults. I like their Haagen-Dasz ice cream way too much!

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10) Gilead Sciences: 15 additional shares, cost basis €890. Mostly a dollar-cost averaging operation. This starts to become a pretty big position but I’m confident they will put their war chest to good use. Patience will pay off.

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11) W.W. Grainger: 13 additional shares, cost basis: €1,995. Part of dollar-cost averaging but a very solid MRO-company. Dividend growth history of more than 46! years. You just gotta love it!

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12) Cisco Systems, 40 shares. Cost basis: €1,150. The market is a bit skeptic but they have plenty, plenty of cash oversea which will come back eventually. Trump, tax holiday? 😉 Almost every human being is affected by Cisco products, even if not in a direct relationship. Might buy more if an opportunity represents itself.

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13) Altria Group: 18 additional shares, cost basis €1,030. After some new government regulations, the market became afraid and sold off the shares. I scooped them up at a nice discount. They also own 10% of AB Inbev.

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14) Hormel Foods Corp.: 45 shares, cost basis: €1,407. Very well managed, family-owned business in the consumer industry, meat processing to be more exact. Ultra low debt and a long dividend growth history.

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15) Pfizer: 15 shares. Cost basis: €445. Small position, how cute! Normally I don’t tend to initiate these small positions but it was better to spend the cash and transaction costs of only $5 were super low.

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16) Symphony International Holdings Ltd.: 5,500 shares. Cost basis: €3,963. Another big, new position. This holding operates in Asia and has many assets. They are investing in companies in particularly high-growth sectors; primarily healthcare, hospitality, lifestyle and branded real estate which will benefit from the rising disposable incomes of Asia’s increasing, and increasingly aspirational, population (source: corporate website). They trade at around $0,85 but their NAV is approximately $1,28. Their director recently bought 2 million shares himself and I think the discount to their NAV will narrow down a lot. Plus, it is a nice geographic diversification for my overall portfolio which yields a very decent 5% net in dividends.

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This was a massive investment quarter. But, there’s a catch.

Recently I found 3 investment opportunities: Resilux, Norcros PLC and Symphony International Holdings. I was too short on cash to make a decent investment in all 3 of them so I created a construction. I sold my entire stake of 80 shares in AB Inbev and 100 shares of Ageas. As I don’t wanted to sell them, I immediately bought 1 call option on each of them at a very low premium (loss of less than 1%). To buy the 100 shares of AB Inbev and 100 shares of Ageas, I only need €10,400 in cash because the premiums are already paid. I expect to complete these buys as soon as halfway November because I already have €2,900 in cash. This means a remaining cash deficit of €7,400.

After that, the cash balance will practically be reduced to zero. I don’t feel comfortable having almost no cash so after this construction I will save up some cash for opportunities.

I hope you enjoyed my new buys and additions to the portfolio! I’m curious to see the dividends next year.

Did you go on a shopping spree lately?

Positions sold Q2 ’17

Hey everyone, time for some portfolio changes!

I’ve been quite active last quarter on the stock market. Normally I don’t tend to be so active, however circumstances and thoughts pushed me towards it.

First of all, I was finally able to sell my Peugeot shares for a small profit of 8% after keeping them for 1,5 years (€135). They were a ‘heritage’ from my first investment days and I was looking forward to put this money elsewhere, more predictable. I don’t like their cars either. The smaller ones really have no comfort for the passengers. I thought I needed new kneecaps after carpooling.

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Secundo, I sold my position of 20 shares in food giant Nestlé SA for a profit of almost 20% in less than 8 months (€230). I sold them shortly after the activist news for 2 reasons. The multiples are getting pretty high and the dividend tax is killing me. 35% Swiss withholding tax and 30% Belgian withholding tax is just too much. These taxes take away more than 1,8% in annual return. Too bad, I liked the company. However, I like money more.

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Next I sold Allergan PLC. I bought them with the prospect of the merger with Pfizer which unfortunately was cancelled. Fundamentals weren’t too clear in my opinion so I decided to sell my small stake and cut losses (luckily enough). This resulted in a loss of €297. Lessons learned.

Fourth and last position I sold was Wal-Mart. I bought them almost 2 years ago when they were on the slaughter bank. I got a 30% profit, being $725 (dividends not included). In my opinion they are slightly overvalued and I do not like the current retail businesses anymore. They are way too competitive and margins are very thin. Almost all retailers are investing big-time in their business and Amazon is another threat to be taken care of. It’s a solid company, but the business is not my cup of tea anymore.

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So far my sold positions... This freed up some cash of course, which was put to work in the weeks/months after.

In a next post I will discuss the rather long buy list with a net worth update!

Note: Normally I do not like to sell stocks of good companies, however this felt justified due to a changed tax regime or business challenges.

Have you ever been forced to sell a company you like because of changing market conditions?

 

Lack of imagination

When I talk to people about the future, they tend to always be average. Most of them want to own a house, have a car and maybe an apartment at the Belgian coast for their old day. Don’t forget a decent pension after a career of 45 years. Then they see their life as succeeded.

Seriously? Is that what you would settle for for the rest of your life? I can’t imagine a life following the herd.

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Think bigger, set goals and achieve them. Truth is, I don’t tell them my real vision on my future. They simply wouldn’t understand or would think I just don’t understand life.
One of the first things that pops into my mind is flying a helicopter or relaxing in Miami enjoying a cocktail. Celebrating New Year at the beach in Sydney or have Christmas in Lapland, home of Santa. Skydiving above the Palm Tree Islands in Dubai or walk on the Great Wall. Maybe work a couple of years in the USA or own a company? The options are endless.

Of course, this comes at a lofty price tag, but isn’t that why people become financially independent? To pursue dreams and lifegoals? This might all sound cocky and big talk but what’s the point in living an average life? It really irritates me how people don’t dream big or set high goals.

Aiming for the stars and landing on the moon isn’t that bad after all. Most people stay on the Earth.

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Without big dreamers, no multinational companies would exist. No man would have put a foot on the Moon or flown a plane. No telephone or electric cars. The world needs people with huge dreams to innovate.

Do you sometimes get irritated by how little people dream?

Dividend Report June-July ’17

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Long time no see, my friends! Exams and 4 straight weeks of work obligations without a laptop decreased my time to investigate the financial markets and keep you updated.

Let’s get it over with and peek at the dividends.

June:

National Grid: €202,22
Unilever: €26,55
RD Shell: €48,59
Imperial Brands: €15,36
WW Grainger: $5,33
Wal-Mart: $11,52
LyondellBasell: $32,76
IBM: $8,02
Johnson&Johnson: $6,00
Gilead Sciences: $20,11

= €292,72 + $83,74 = €365,54

July:

HSBC Holdings: $43,89
Vanguard S&P500 ETF: $9,91
Altria Group: $5,44
Cisco Systems: $6,90
Walt Disney: $6,50

= $72,64 = €63,17

The used conversion was 1,15$/€.

June got a massive boost from a special dividend from National Grid. The energy company decided to sell off a division and distribute a part of the earnings to their shareholders. This is a non-recurrent dividend and therefore not to be expected next year. The adjusted dividends for June come in at €163,32.

July was a rather poor month, bringing in only $72,64. However as I was literally ‘off the grid’ due to work, it was truly work-free capital joining my account.

By the way, I just exceeded 2016 dividend income with my 2017 dividends YTD.
Total YTD dividend income stands at €1477,5.

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Hope you have a nice summer so far!