March is over and it is time for another entry in my investment journal. It has been a great month with a lot of action – so come along for an update on the good deals I have been able to pick up before market recovery, a brand new position, and lots of changes to my Watch List.
Changes to my portfolio this month
Truth be told, in times like these where everything has dipped to levels I feel are fair (or more than fair) it has been a real struggle to be low on cash. That is one downside of being fully invested. So going into this year my plan was to sell a few Tesla (TSLA) shares in order to gather funds for expanding my newer positions if they fell to comfortable levels. What I had not accounted for was the entire market going down, with everything trading at attractive valuations. That made selling Tesla that much harder as they also dipped far below was I think is fair. Ultimately that led me to do something unplanned…
- On the 7th, Unity (U) stock dropped below $90 and the remaining cash I had on hand from my January Tesla sale went into buying more shares.
- That very same day, as Unity continued to drop I sold close to 10% of my Microsoft (MSFT) holdings at an average price of $281.65.
- On the 8th I picked up another chunk of Unity stock at $77.5, bringing my average down to $93.58 and making Unity my 4th largest position.
- A small automatic buy order of the Danish Invest Denmark Index ETF went through on the 8th – Which I aim to continue doing every month this year.
- On the 11th I completely exited my position in AT&T (T) selling my remaining shares at an average price of $23.2 – about a 10% loss.
- On the same day, a minute to market close used these funds to open a new position in Starbucks (SBUX) at an average of $82.7.
|Name (Ticker)||Received (on)||Amount (USD)|
|Microsoft (MSFT)||Mar 11th||$102.98|
|3M (MMM)||Mar 15th||$14.97|
|Realty Income (O)||Mar 16th||$13.57|
|Nvidia (NVDA)||Mar 25th||$0.80|
|Comparison + total increase YoY||$121.79 (Mar 2021)||+$10.53|
Commentary & Review
I had not planned on selling any more Microsoft. Ever. But when Unity dipped further below $100, even approaching $75 I had to do something. With the annual tax bill landing in March I had no cash – and so I decided to take one last chunk out of my beloved tech giant. Microsoft is also down this year, sure, but not even remotely close to how much Tesla was trading down early on in the month. Many may think that I am overreacting and that trimming a position making up nearly 25% of my holdings is only healthy. The thing is though, Microsoft fits perfectly with my strategy:
- It is a company I know to its very core and one I follow very closely.
- It is a mega-cap and safer type of investment.
- It is dedicated to raising its dividend and pays out a fair amount.
But this is it – I am done. For the next many years I do not believe I will even consider selling any more Microsoft stock – unless things somehow drastically change of course. Interestingly this is also the highest price I have let it go at, having sold shares of this company many times in the past. The last time around was in March last year at $244.64 a share and the first time I did so was all the way down at $51.88 per share. That of course makes the decision easier: I have been so fortunate to hold this company for nearly a decade now and seen tremendous returns – it is only fair I take some profits along the way.
Another major investment move on my part this month has been the execution of my announced exit of my AT&T (T) position. It has been a long struggle for me to figure out what was the right move after the company laid out its plan to change fundamentally by spinning off the part of the company I had counted on for future growth. But ultimately the small drips of information that have come out over the last half-year, combined with the frustration of knowing too little made me scout for other places to put my money. As soon as an opportunity arose I sold out and used those funds to buy into a brand new position within a matter of minutes. That new position is Starbucks (SBUX) – which avid readers of this blog may have already picked up on. It made it to my Watch List last month and as the price continued to drop I just went for it. I made a long in-depth post on why I think it is a great dividend growth play for me. It yields slightly lower than the 3% average I aim for – but much like with Broadcom (AVGO) which I also picked up recently I am confident they will make up for in both growth and dividend growth over the long term.
Finally, it is worth mentioning that my investments for 2022 are no longer in the red. By March 31st I am up about half a percent from January 1st. Time will tell if it will continue or not, but it feels great to be back on track.
March was another decent month for dividends payout – as it always is those four times a year Microsoft contributes. Keep in mind that while it only pays out 0.8% in dividends, it makes up a quarter of my growth portfolio – which is approximately 10 times the size of my dedicated dividend portfolio. It is also fun to see a $10 increase year of year, considering the only new contributor since then is Nvidia (NVDA) which pays out less than a dollar to me. I still cannot for the life of me understand why they do this – that cannot meaningfully mean anything to anyone holding the stock. They started paying out less than half of what they do now almost a decade ago, but they have not raised it in at least 4 years. Maybe when they comfortably sit at a $1 trillion market cap they will start rewarding their shareholders outside of growth? At these levels, I would rather they did not provide one at all and just focused on the growth they already are so dedicated to.
Research & Goals
March was spent diving deep into Starbucks as more than just a brand. I looked into their numbers, history, leadership, and much more. Surprisingly from all this, I gathered no insights about a potential shift in leadership – yet only a few days after my buy-in, their CEO stepped down. That just goes to tell you how unpredictable it can be investing in even large stable companies. What I did learn however is that their now interim CEO Howard Schultz is a great leader and really the one to thank for the company ending up where it did. I am completely happy with the company being in his hands for now – but I do wonder if anyone can even take over and do better than him. Also interesting is how he is taking on this role with no extra pay. Truly a man dedicated to the organization he helped build.
This month I also had the chance to join a talk by Unity’s Senior Vice President of Artificial Intelligence, Danny Lange. This guy has a legendary CV having spent time leading the machine learning & AI departments of Microsoft, Amazon, Uber, and many more. He did an incredible presentation which I attended in person, showcasing just how groundbreaking simulating these things in a real-time physics-based engine like Unity is. I gained a ton of insight into the potential of digital twins which made me even more bullish on this company’s future. AI has been such a small part of my bull thesis on Unity – yet one I have severely underestimated.
|Name (Ticker)||Conviction (Rank)|
|Alphabet (GOOGL)||1 ┅|
|Shopify (SHOP)||2 ┅|
|Sea (SE)||3 ┅|
|Embracer (EMBRAC B)||4 ↑|
|Meta (FB)||5 ↓|
|Palantir (PLTR)||Contender ┅|
|Name (Ticker)||Conviction (Rank)|
|Costco (COST)||1 ┅|
|Bank of Nova Scotia (BNS)||2 ↑|
|Digital Realty (DLR)||3 ↑|
|JP Morgan Chase (JPM)||New|
|Lockheed Martin (LMT)||5 ↑|
|WhiteHorse Finance (WHF)||Contender|
The Watch List for my Growth Portfolio has stayed mostly the same. The swap of Embracer (EMBRAC B) and Meta (FB) is mostly attributed to me turning increasingly more bullish on Alphabet (GOOGL) and where I recognize that they both essentially are plays on digital advertising. So if I do end up buying Google one day, owning Meta as well will make less sense for me in regards to diversification.
In contrast to this small change, however, is my Dividend Portfolio Watch List which has been almost entirely overhauled. Costco (COST) stays at the top, yet still out of reach due to its massive valuation, which amazingly just continues to go up. E.ON (EOAN) has been wiped from the list as even though the price went down due to their reliance on Russia, so did my conviction in it. I have decided to stay out of energy companies for the time being and with Tesla hopefully ramping their energy business in the next couple of years I will have plenty of exposure to the industry anyway. Starbucks made it to my Watch List in January, moved up in February, and is now gone as I purchased my first shares. That means Digital Realty (DLR) has moved up, along with Bank of Nova Scotia (BNS). As you may be able to see there is a good chance my next dividend stock will be in the financial sector with JP Morgan Chase (JPM) and WhiteHorse Finance (WHF) joining the list this month. The latter is a particularly interesting stock unlike anything else I have owned before – but at the same time one that requires a much deeper investigation in order for me to buy it.
- Short term I wish to continue to increase my position in Unity, Xiaomi, and Coinbase.
- For the year 2022 while generally focusing more on growth stocks than in the year prior.
- I have no current plans to open any new positions in my Growth Portfolio, but rather to add to my newest additions.
- I do not plan on selling out of any more positions this year.
- In my 2021 year in review, I stated that I aim for a 35% return in 2022. I continue to strive toward this goal. Currently, I am up 0.57%.
- Over the long term, my goal is to slowly shift towards more stable positions and dividends on my journey towards financial freedom.
Disclaimer: I am not a financial advisor, the opinions expressed in this article are entirely my own – always invest at your own risk.
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