Blog posts on stocks

Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs

• Finding Great Investments Keeps Getting Harder

  In some ways investing recently has been pretty easy, anything you have bought (almost) goes up – and usually goes up a lot. But when looking for bargains to invest in, it just keeps getting more and more difficult in my opinion.

  ...

  Overall I am going much more into cash as a safe haven than I have before. Normally I am extremely overweight stocks. Even today I am still overweight stocks compared to the conventional wisdom

  ...

  While the markets are giving investors great returns finding good buys is becoming more and more difficult (at least for me). For example, my 10 Stocks for 10 Years (2018 version) has done very well. But several of those stocks are much less a bargain today that they were. Apple is up from $225 to $450. Danaher from $103 to $206. Amazon from $2,000 to $3,150. Tencent from $43 to $68...

  continue reading: Finding Great Investments Keeps Getting Harder
• US Savings Bonds – Actually a Good Investment Option

  I will admit I have only recently looked at US Savings Bonds as an investment option. Series I USA savings bonds are based on the inflation rate and given how strongly the Fed has been surpassing interest rates this offers an option to get a higher rate of interest.  The rate is calculated as follows:

  Composite rate = [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

  2.22% = [0.0020 + (2 x 0.0101) + (0.0020 x 0.0101)]

  This is calculated based on a fixed rate of .2% (showing how depressed interest rates are) and 1.01% inflation rate for a 6 month period (which also is low but compared to interest rates pretty high).

  You may buy series I US savings bonds online via TreasuryDirect. In a calendar year, you can acquire up to $10,000 in electronic I bonds.

  continue reading: US Savings Bonds – Actually a Good Investment Option
• Stock Market Capitalization by Country from 2000 to 2016

  One way to view the dominance of mega-companies is that the market cap for the top 4 stocks exceeds the market cap of all of Canada’s stocks (Apple $807 billion + Alphabet $687 billion + Microsoft $588 billion + Facebook $507 billion = $2.589 trillion). The next, Amazon $477 billion, bring the total for the top 5 to over $3 trillion (and surpasses the UK market cap, leaving only USA, China and Japan as larger markets).

  The USA market capitalization was at 46.9% of the global market cap in 2000 and fell to 31.6% in 2000 before rising to 42% in 2016. China grew from 1.8% of world stock market capitalization in 2000 to 6.9% in 2012 and 11.2% in 2016. Adding Hong Kong to China’s totals shows 3.7% in 2000 with growth to to 12.2% in 2012 and 16.2% in 2016.

  You may be surprised to learn that 26% of USA equities are owned by investors outside the USA.

   

  continue reading: Stock Market Capitalization by Country from 2000 to 2016
• Individual Stock Portfolio Investment Planning

  Early last year when studying my portfolio I decided my two biggest positions (Apple and Google – those ready the blog won’t be surprised due to my 10 stocks for 10 years posts) continued to warrant the large portion of the portfolio they held. I also decided that I would systemically sell say 1% of Apple and 2% of Alphabet a year (the Apple dividend was also paying about 1% – actually it was more then but is much less now).

  That was just a long term plan that helped me think about the long term portfolio management. But that, like all investment decision, was subject to revision. As both continued to soar I decided it made sense to sell more but maintain a similar plan, just maybe selling 2% and 4% a year...

  continue reading: Individual Stock Portfolio Investment Planning
• 10 Stocks for 10 Years (2018 version)

  The 10 stocks I selected for this 2nd version are (closing price on 22 April 2005 – % of portofilo invested):

  • Tencent (TCEHY) – $43 and 15% (using the USA ADR). A phenomenal company with incredible global prospects for the long term. As the stock price has been hampered by concerns about China it has great potential for appreciation from the current price.
  • Alibaba (BABA) – $175 and 15% (using USA ADR). Another phenomenal company with incredible global prospects that has performed poorly this year due to China concerns.
  • Alphabet (GOOGL) – $1,254 and 11% (in the original 2005 portfolio the price was $216 and it started at 12% of the portfolio. The prospects are great long term, the stock price reflects that so it isn’t cheap but over the long term I expect it to do very well).
  • Apple (AAPL) – $225 and 11% (I added Apple to the original 10 for 10 portfolio in 2010. The biggest mistake in the original portfolio was leaving off Apple, I considered it but chose not to include it. It has been my largest stock holding for years. It has been very cheap even just a few years ago, though today I think the price is much more reasonable so it isn’t the great bargin it has been. Still the long term prospects are great.)
  • Abbvie (ABBV) – $97 and 10% (I added Abbive to the original portfolio in 2014. I would select a couple other healthcare stocks in a real invested portfolio for balance but Abbvie is the company I am most comfortable with so I include it here.)
  • Toyota (TM) $125 and 9%

  ...

  continue reading: 10 Stocks for 10 Years (2018 version)
• Tencent Gaming

  Tencent is one of the stocks in my 10 stocks for 10 years portfolio. In fact it is my largest holding (when you consider that Tencent shares owned by Naspers. Some others have performed better since my reboot of the portfolio in August of 2018: Apple (from 225 to 318) and Danaher (from 103 to 162) and Naspers (33 to 34, which might not seem so great but 2 spinoffs provide another 15) but I still like Tencent a great deal for the next 8 to 10 years.

  Tencent has quite a few huge global businesses. One of the most promising areas is Tencent Gaming. Tencent has ownership in many of the largest computer gaming companies globally...

  continue reading: Tencent Gaming
• Most Valuable Companies in the USA Compared to the Total Market Capitalization

  In general investing in low cost index funds (like Vanguard’s index funds) is a very sensible strategy. I personally invest mostly in individual stocks. I see stocks such as Microsoft and Costco that are attractive businesses to invest in but the stocks are so costly I hesitate to invest. In addition, I already am over-invested in mega-cap companies (my largest holdings are Apple, Alphabet and Amazon, about 36% of portfolio). So avoiding other mega-caps makes some sense to me.

  ...

  10 year returns: Apple (up 1,068%), Alphabet (up 424%), Amazon (up 693%) and Microsoft (up 1,090%). FYI, the total USA market index fund (VTI) was up 187% for the same 10 year period and the S&P 500 index fund (VTI) was up 204%.

  continue reading: Most Valuable Companies in the USA Compared to the Total Market Capitalization