2016 Portfolio Review

As we enter the new year, I find it beneficial to take stock of the old – the triumphs and tribulations to fine tune and adjust to the new landscape.

Market Value

Market value of the portfolio increased 32.65%.  Pure capital appreciation represents 51.05% of that result with 15.7% resulting from the cash portion of M&A activity and the remaining 33.2% represents fresh injection of funds.


Total dividends received increased 29.3% with 12.3% a result of dividend increases.  No holding reduced its payout, one initiated a payout and 25.5% failed to increase or have no dividend.  None of the failures to increase which  are on David Fish’s CCC list are currently at risk.

Total Return

Capital appreciation + Dividends = 35.7%

2016 In Review

This year was my second best in roughly 34 years of investing with a perfect storm of M&A activity and the perceived Trump impact with financials being the catalysts.  I also didn’t expect to end the year with 171 positions.  A number of these were added during the fourth quarter in an effort to fill the dividend gap left by Piedmont with their merger.  I guess the biggest ‘failure’ was my inability to position the portfolio closer to the target weightings.  However, part of this was due the amount – and timing – of M&A activity.  Put on a positive note, this was was recognized this time last year.

2017 Strategy

I believe that this year will be one which the norms that we rely upon will be upended.  Geopolitical issues such as European elections, oil or North Korean sabre rattling will rule.  Add to that the Fed’s caution with trade, strong dollar and optimism outpacing reality.  My approach will be to expect a strong start with a fade as policy and fiscal issues bog down Congress with their multiple constituencies.  Coupled with tough year over year comps leaves us with only the hope that failed policies from years ago will somehow work as expected this time.  I’ll monitor the market and buy domestic companies on weakness, however my assumption is the bulk of my purchases will be in Canadian, UK, EU, Australian, Japanese, Hong Kong or Mexican companies to take advantage of the historically high US dollar.

I’ll continue to share the journey as we navigate into uncharted territory always keeping in mind that we’re only a tweet away from turbulence.