Author Topic: What are you buying today?  (Read 1000247 times)

Dynamic

  • Sr. Member
  • ****
  • Posts: 333
Re: What are you buying today?
« Reply #2760 on: February 12, 2018, 03:19:05 PM »
I am indeed a believer in Charlie Munger's maxim of making a truly meaningful commitment to a high conviction idea, which I would expect to come along only rarely. I know my allocation is extreme and not suitable for most people.

Berkshire is the only company I'd be happy to hold a 100% position in thanks to its extremely low risk of collapse, diversified income streams and high certainty of compounding at a rate that will meet my fairly modest long-term goals over the next decade at least. I'd be happy to hold 100% BRK.B pretty much anywhere in the typical 1.2x BVPS to 1.6x BVPS trading range (adjusting for anticipated forward BVPS, such as currently projecting around $143-$145 BVPS to be announced in the Annual Report). I've held a >50% position since 2003 which modestly beat the S&P500 on an annualized basis despite a slightly high entry price by my current standards.

Halma plc is probably next on my list at around 50-60% maximum weighting. It's currently far too richly priced and I sold it all at 808p (P/E 28.8) to add to cash held to purchase more BRK.B at 1.2x projected BVPS at $124 in Feb 2016.

Apple, I'm prepared to hold up to about a 50% position in before wanting to trim for single company portfolio risks alone, though I might also trim if valuation became particularly high, ideally to trade into something significantly undervalued and ideally with good compounding prospects.
When I purchased at $95 (which was a high conviction idea at that price in May 2016) I was prepared to put 25% in as my highest initial stake, with the idea that it could potentially double to almost a 50% position if re-rated quickly. I felt that even if Apple lost a lot of its value, my other positions at 75% and future monies to be added to the portfolio should meet our retirement goals. The 25% in Apple at such a low price was a chance to substantially boost our returns. Only by adding so much more cash and getting good returns on BRK.B has Apple remained close to 25% position despite its appreciation.

I also know I have fewer of these high conviction ideas than many Value Investors do (smaller circle of competence), so I need to seriously capitalise on them by taking large stakes from time to time.

Being able to detach from market price and focus on growing my portfolio's intrinsic value (and my 'Low Value' - a rough metric based on Fundamentals not Market Price) is a big help in handling the potential volatility over a year or two. I expected to do fairly well in 2016 with a reasonable probability, but to sustain a small margin over the S&P500 in 2017 with only one trade (adding more BRK.B late in the year with our 10% cash position) was probably mostly luck.

I fully appreciate the most people won't be able to stomach my degree of concentration. In my case, I felt that WFC and IBM were di-worse-ifying even if not statistically expensive (and I'll still own some exposure to each via BRK.B) and that BRK.B has much surer prospects of meeting my long term goals.

If Berkshire were to hit $180 or so, I might well consider going to around 99% BRK.B and sleep well at night too. I don't imagine many would feel as content with such concentration!


DooDiligence

  • Hero Member
  • *****
  • Posts: 1372
  • ♪ 🎶 ♫ ♪ 🎶 ♫
Re: What are you buying today?
« Reply #2761 on: February 12, 2018, 04:36:49 PM »
I am indeed a believer in Charlie Munger's maxim of making a truly meaningful commitment to a high conviction idea, which I would expect to come along only rarely. I know my allocation is extreme and not suitable for most people.

Berkshire is the only company I'd be happy to hold a 100% position in thanks to its extremely low risk of collapse, diversified income streams and high certainty of compounding at a rate that will meet my fairly modest long-term goals over the next decade at least. I'd be happy to hold 100% BRK.B pretty much anywhere in the typical 1.2x BVPS to 1.6x BVPS trading range (adjusting for anticipated forward BVPS, such as currently projecting around $143-$145 BVPS to be announced in the Annual Report). I've held a >50% position since 2003 which modestly beat the S&P500 on an annualized basis despite a slightly high entry price by my current standards.

Halma plc is probably next on my list at around 50-60% maximum weighting. It's currently far too richly priced and I sold it all at 808p (P/E 28.8) to add to cash held to purchase more BRK.B at 1.2x projected BVPS at $124 in Feb 2016.

Apple, I'm prepared to hold up to about a 50% position in before wanting to trim for single company portfolio risks alone, though I might also trim if valuation became particularly high, ideally to trade into something significantly undervalued and ideally with good compounding prospects.
When I purchased at $95 (which was a high conviction idea at that price in May 2016) I was prepared to put 25% in as my highest initial stake, with the idea that it could potentially double to almost a 50% position if re-rated quickly. I felt that even if Apple lost a lot of its value, my other positions at 75% and future monies to be added to the portfolio should meet our retirement goals. The 25% in Apple at such a low price was a chance to substantially boost our returns. Only by adding so much more cash and getting good returns on BRK.B has Apple remained close to 25% position despite its appreciation.

I also know I have fewer of these high conviction ideas than many Value Investors do (smaller circle of competence), so I need to seriously capitalise on them by taking large stakes from time to time.

Being able to detach from market price and focus on growing my portfolio's intrinsic value (and my 'Low Value' - a rough metric based on Fundamentals not Market Price) is a big help in handling the potential volatility over a year or two. I expected to do fairly well in 2016 with a reasonable probability, but to sustain a small margin over the S&P500 in 2017 with only one trade (adding more BRK.B late in the year with our 10% cash position) was probably mostly luck.

I fully appreciate the most people won't be able to stomach my degree of concentration. In my case, I felt that WFC and IBM were di-worse-ifying even if not statistically expensive (and I'll still own some exposure to each via BRK.B) and that BRK.B has much surer prospects of meeting my long term goals.

If Berkshire were to hit $180 or so, I might well consider going to around 99% BRK.B and sleep well at night too. I don't imagine many would feel as content with such concentration!

I'm shooting for 30% to 60% BRK (30% if I just keep DCA'ing & 60% if it pulls back towards 1.2)
I'm only at 5.1%, so I've got some buying to do.

My reason for such concentration would be a limited circle of competence, as well as the desire to reduce my finance related reading, in order to make straight A's in school.
(Healthcare 44% - ABC BBH CVS DVA EW NVO) | (BRK.B - 14.8%) | (Media & Communication 13% - CHTR CMCSA DIS)

(Drinkers & Smokers 12.1% - ABEV MO) | (Auto's & Oil 10.8% - GPC VDE) | (Tech & Comms 5.2% - AAPL SFTBY)

(%'s held @ MV 8/18, excludes $)

[prepared 2 wait]

https://twitter.com/tunawish

Spekulatius

  • Hero Member
  • *****
  • Posts: 1489
Re: What are you buying today?
« Reply #2762 on: February 12, 2018, 04:38:47 PM »
BWP

I added some as well, but own enough already. it’s a but more of a Workouts situation that i hoped for, most of my other MLP buys have done much better. It is dirt cheap at an 18% DCF  yield based on current prices.

I think the thumbsuckers at L should take it out.
« Last Edit: February 12, 2018, 05:33:54 PM by Spekulatius »
To be a realist, one has to believe in miracles.

John Hjorth

  • Hero Member
  • *****
  • Posts: 1779
Re: What are you buying today?
« Reply #2763 on: February 12, 2018, 05:13:10 PM »
... My reason for such concentration would be a limited circle of competence, as well as the desire to reduce my finance related reading, in order to make straight A's in school.

DooDiligence,

Somehow, I get concerned reading this, Sailor. Naturally, you can do both! Where there is will & determination, there is a way.
« Last Edit: February 12, 2018, 05:18:56 PM by John Hjorth »
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

DooDiligence

  • Hero Member
  • *****
  • Posts: 1372
  • ♪ 🎶 ♫ ♪ 🎶 ♫
Re: What are you buying today?
« Reply #2764 on: February 12, 2018, 05:24:01 PM »
... My reason for such concentration would be a limited circle of competence, as well as the desire to reduce my finance related reading, in order to make straight A's in school.

DooDiligence,

Somehow, I get concerned reading this, Sailor. Naturally, you can do both! Where there is will, there is a way.

I'm doing both, but between studying & practicing, I have very little time to socialize.
Driving time to & from school is 1 hour & 20 minutes (if I had a chauffeur, I could knock out some practice time.)
If I was highly concentrated in BRK, I'd have time to get my ashes hauled.
As it is now, I choose to read & make annoying posts on COBF & Twitter, instead.
(Healthcare 44% - ABC BBH CVS DVA EW NVO) | (BRK.B - 14.8%) | (Media & Communication 13% - CHTR CMCSA DIS)

(Drinkers & Smokers 12.1% - ABEV MO) | (Auto's & Oil 10.8% - GPC VDE) | (Tech & Comms 5.2% - AAPL SFTBY)

(%'s held @ MV 8/18, excludes $)

[prepared 2 wait]

https://twitter.com/tunawish

Ismael

  • Newbie
  • *
  • Posts: 21
Re: What are you buying today?
« Reply #2765 on: February 12, 2018, 07:41:03 PM »
@Benchmark & @Spekulatius

Any thoughts on the re-contracting risk for BWP?

Do you agree with this statement from the AR?

"While this result has presented challenges to our ability to remarket this capacity at favorable rates, it may, over the long-term, create opportunities for us to aggregate natural gas supplies at key locations along our pipeline system to provide new and existing
end-use customers with attractive and diverse supply options."


Spekulatius

  • Hero Member
  • *****
  • Posts: 1489
Re: What are you buying today?
« Reply #2766 on: February 13, 2018, 06:11:43 PM »
@Benchmark & @Spekulatius

Any thoughts on the re-contracting risk for BWP?

Do you agree with this statement from the AR?

"While this result has presented challenges to our ability to remarket this capacity at favorable rates, it may, over the long-term, create opportunities for us to aggregate natural gas supplies at key locations along our pipeline system to provide new and existing
end-use customers with attractive and diverse supply options."

I think the recontracting risk quantified as a $100M annual reduction in port revenues, which I think means roughly $80M in loss of EBITDA/year. I had hoped, that the growth projects coming online would compensate for the contract expiration’s, but that is apparently not the case. i think there is likely upside dem this scenery as they recontract or repurpose the unused pipelines, but that remains to be seen.

it is definitely worse than I hoped for because up this quarter, BWP‘s results were actually quite good.
« Last Edit: February 13, 2018, 08:11:21 PM by Spekulatius »
To be a realist, one has to believe in miracles.

gjangal

  • Full Member
  • ***
  • Posts: 146
Re: What are you buying today?
« Reply #2767 on: February 13, 2018, 07:48:52 PM »
PCLN and DIS are looking cheap relative to market. Quality companies at a good price

boilermaker75

  • Hero Member
  • *****
  • Posts: 961
Re: What are you buying today?
« Reply #2768 on: February 14, 2018, 06:43:07 AM »
Rewrote puts that are expiring today, GILD at 70 and AMGN at 170.

Again

Wrote March 16, 165-strike puts on AMGN for $2.05 per share.

I have been continually writing puts with strike prices of $165-175 on AMGN since March 2017.

Lakesider

  • Jr. Member
  • **
  • Posts: 91
Re: What are you buying today?
« Reply #2769 on: February 14, 2018, 12:26:52 PM »
AER