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Happy Monday and the week ahead! Welcome to this 29th post of investing, not rocket science! Investing Doesn't Have to Be Rocket Science: this is our Non-Expert Guide to Portfolio Management.
We begin this post with a portfolio review:
1. Since inception of this series (14th Feb 2023), the portfolio is Up +2.70%, while the benchmark is flat at -0.07%. The annualized return on the portfolio is 11.3%.
2. Risk measures: The portfolio has a Sharpe Ratio of 1.06, Sortino of 1.47 and a Standard Deviation of 0.47%.
3. The biggest gainers on the portfolio are Alphabet (+31%), Glencore (+11 %), Tesla (+6%) and ICBC (+5%).
4. Among the long positions, Deutsche Bank (-16%) continues to remain the largest detractor, followed by Citigroup (-9%). Rise in the stock price of Nvidia, a short position (used as a hedge to equity exposure – read about it in post 14 here), contributed to a downward pull in portfolio performance.
5. All asset classes (Equities, Fixed Income, Real Estate and Cash) have contributed to the positive performance of the portfolio.
In summary, the portfolio continues to meet its objective of beating inflation and the benchmark index and it does so with good risk measures. (See details of the portfolio below).
A quick recap of this blog series (investing, not rocket science) so far:
In the 1st post: I defined a basic portfolio framework. The objective of this million dollar portfolio is beat inflation and an equity index. The investment style presented here is active portfolio management, without the use of leverage and a time horizon greater than 5 years. The benchmark index is the MSCI ACWI IMI. Typically, there are two posts a week, which includes details of the portfolio and actionable evaluations (Mondays and Fridays).
From posts 2 to 20: I have evaluated 67 stocks and 4 potential bond additions. The portfolio is long 15 stocks, 1 Bond and short 1 stock.
Posts 21 to 27 were focused on the Q1 2023 earnings announcements, particularly of stocks in the portfolio and in the watch-list. You can read all about it in the previous posts here: https://www.claritech.app/blog
You can click on the charts, graphs or illustrations to expand or zoom in. There is no remuneration received to evaluate specific companies or to add to the portfolio or the watch-list. The Amazon adverts you see are the source of revenue for this free blog (subject to purchases or subscriptions).
Continuing Portfolio Review
Allocation:
1. Regional allocation: Europe 59%, North America 28% and Asia 13%
2. Asset Class allocation: Equities (49%), Fixed Income (35%), Real Estate (6%) and Cash (10%)
3. See illustrations below for Portfolio Holdings and Allocation.
Portfolio Transactions last week:
There were no portfolio transactions last week.
Portfolio performance last week:
1. Portfolio closed flat for the week, lower by -0.68%.
2. The benchmark index was lower by -0.65%
3. Portfolio detraction last week was largely due to the interest rate decision in the UK, which led to a fall in bond prices. In addition to this, BMW, Vodafone and Glencore saw fall in prices last week.
4. Nvidia fell last week and contributed to gains in the portfolio (since it is a short position).
5. Gains in the portfolio were led by Alphabet and JD.com
Alphabet – Why the stock was up 10% last week
According to an article in Barron’s, Google was back with another round of demos and announcements related to AI at its developers conference in mountain view, California and this time the company got it right.
Some of the key points:
Bard is now open to users in 180 countries. For now, Bard only in English but expected to expand to 40 languages.
Sundar Pichai and other presenters spoke of a "bold and responsible" approach to AI. Google will add a "help me write" feature into Gmail.
Map will have an immersive view for routes that allows you to test driving, walking or running the routes.
Google photos will have a magic editor feature.
The company is also empowering Bard to provide images in response to queries.
JD.com
The company announced its Q1 2023 results last week. According to a statement from the company, revenues were up 1.4% YoY at US$ 35B, while service revenues were up 34.5% YoY at US$ 7B. Net income for the quarter was at US$ 0.9B compared to a loss of US$ -0.4B in Q1 2022.
The company reports four segments, JD Retail, JD Logistics, Dada and New businesses. JD Retail, including JD Health and JD Industrials, among other components, mainly engage in online retail, online marketplace and marketing services in China. JD Logistics includes both internal and external logistics businesses. Dada is a local on-demand delivery and retail platform in China. New businesses mainly include JD Property, Jingxi and overseas businesses.
Highlights in Q12023: JD Retail: Tesla launched its flagship store on the website, offering auto products, charging equipment and premium accessories. Longines (the Swiss watchmaking brand) opened its flagship store on jd.com
JD Health: launched “doctor-searching map for rare diseases”, launched its intelligent medical engine on its online healthcare service platform.
JD Logistics: opens its third self-operating warehouse and distribution center in California. As of March 31, 2023, JD Logistics operates over 1,500 warehouses. Including warehouse space managed through the Open Warehouse Platform, with an aggregate gross floor area of over 31 million square meters.
Financial Markets and Economic data last week
The Bank of England increased interest rates by 0.25% to 4.25%, you can read about it in post 28 here.
The ECB and FED announced their interest rate decisions in the previous week (you can read about it in post 26 here).
North America Economic Data:
US CPI in Apr at 4.9% YoY from 5.0% in Mar’23. Gains 0.4% MoM compared to 0.1% in Mar’23. US Core CPI in Apr at 5.5% YoY from 5.6% in Mar’23. Gains 0.4% MoM, the same as Mar’23
U.K and Europe Economic Data:
German Industrial Production falls -3.4% MoM in Mar’23 compared to a gain of +2% MoM in Feb’23
German CPI at 7.2% YoY in Apr from 7.4% YoY in Mar’23
UK GDP projected to grow 0.1% QoQ
Asia Economic Data:
China CPI in Apr at 0.1% YoY, from 0.7% in Mar’23. MoM -0.1% from -0.3% in Mar’23.
Summary of financial market performance
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This series is for information purposes only without regard to any particular investment objective, financial situation, suitability or means. It is not be construed as a recommendation, or any other type of encouragement to act, invest or divest in a particular manner (whether explicit or implicit). We recommend that you are familiar with the terms of use.
Economic Data This Week:
European Union Economic Forecasts
EU CPI and Core CPI (APR)
China Industrial Production UK Employment US Retail Sales, Industrial Production
US Home Sales Data
A summary of the previous (February’23) European Union Economic Forecasts below
That’s all in today’s post, in the next post I will evaluate the Q1 earnings of the financial stocks in the portfolio and complete the assessment of the media and entertainment stocks from the previous post (same post also covers the BoE interest rate decision, read post 28 here). Thank you for your time! See you in the next post!
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