With the wild ride in the markets this week, I perused some of the community’s blogs to gauge the reaction. While not meeting scientific norms regarding sample size, I was surprised by the lack of reference to the pullback in 66% of them – including ones with posts as recent as yesterday. Perhaps it’s a lack of funds to take advantage or the deer in the headlights syndrome. One blog, Fully Franked Finance, had a timely piece a few days prior which stated the importance of a ‘shopping list’ – as many others also encourage. I too, engage in a strategy which emulates the ‘shopping list’ strategy. So, what were my moves so far this month?
- Feb 1st – last ‘normal’ day – implemented my previously telegraphed move on selling my smaller RY stake. Through a partial rebalance transaction, rolled the proceeds into my other Canadian stocks. Net effect in hindsight – wash. Up on the sale portion, down on the buy side.
- Feb 2nd – DOW down 666 points – killed off my domestic watch list. I didn’t have time to fully review my international list, but added Southwest Airlines (LUV), Scotts Miracle-Gro (SMG), Bank of N.T. Butterfield & Son (NTB), Waste Management (WM), Republic Services (RSG), Covanta (CVA) and Carlisle Companies (CSL). Also added to existing ABB, CME, CBOE, CTSH, ICE, ENR, NWL, INTU, JPM, MSFT, NDAQ, NVS, NVDA, OTTW and VBTX positions. Rationale: SMG (legal cannabis exposure), NTB (Bermuda – CM reviewing a similar structure), LUV (on sale) and the other new ones because of China’s decision to restrict imports of garbage. These are the leaders in the Waste to Energy (WTE) space.
- Feb 5th – DOW down 1175 points – added to existing KMB position covering last month’s fractional sale (and then some).
While I missed Thursday’s drop I was at least able to capitalize on the week’s overall retrenchment. The S&P has experienced a 7.23% decline for the month while my portfolio (similar to most DGIs) had a lesser decline – mine being 6.45%.
Bitcoin, pronounced as a value store, lost a further 13% so far this month – ouch. Even so, this hasn’t deterred new Blockchain ETF announcements most recently from Canada. HBLK started trading in Toronto February 7th with BLCK and LINK pending (also Canada). I realize that Crypto is separate and distinct from Blockchain but obviously someone failed to share this knowledge with HBLK which is heavily weighted with mining operations and speculative endeavors unlike its’ US counterparts.
As mentioned above, my foreign holdings (ex Bermuda) remained basically constant during these gyrations. There’s no conspiracy theory only that wild swings tend to distort pricing and exchange ratios. I also like to identify the root cause prior to allocating capital – both of which require a little more analysis. As my domestic watch list is now empty (save one), foreign stocks on the list hail from Japan (5), Australia (3), China (2) and Mexico, Switzerland, and Sweden with one each. The largest obstacle being that – despite all the protestations in Davos, the US Dollar has dropped against all of the currencies paying me dividends (except Hong Kong) since Trump was elected. Notable is the Euro at 14.4% making Canada and Australia looking like bargains at 7.4% and 4.1% respectively. The following table presents my final 2017 tally with the percentage against ALL dividends (US and foreign).
GEOGRAPHICAL DIVERSIFICATION OF 2017 DIVIDENDS
|China, United Kingdom and Switzerland are partial year dividends
How have you survived the roller coaster month?