2 Recent Buys – BAM, TWLO

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A quick update on two purchases in my portfolio. A correction seems to be ongoing and I decided to put some capital to work. One new company added to my portfolio in this iteration of purchases.

  • First purchase: I added 50 shares of Brookfield Asset Management (BAM.A.TO) @ CAD$66.95. Brookfield has been gobbling up assets across the world at a record pace. With alternate assets in demand and blue sky outlook over the coming years and decades, BAM is still a great buy at these levels. The stock yields 1.32% and adds US$32.00 in annual dividends.
  • Second purchase: A new position and my first SaaS stock. I opened a new position with 25 shares of Twilio Inc (TWLO) @ $124.84. This will be a bit more speculative on my part as it deviates a bit from my usual type of investments. Twilio is a programmable communication platform, with no direct competition and rapid growth in revenue (85% YoY revenue growth as of Q2 2019) and a ‘Rule of 40’ of 76%. The company boasts 162K businesses as customers, with more being added each quarter. The company makes extremely sticky software that has high switching costs (read: wide moat), but comes with risks based on current valuation. I have been tweeting about this company over the past few weeks — see this thread for more info.

What are your thoughts on these purchases. Share a comment below.

Full Disclosure: Long BAM.A.TO, TWLO. Our full list of holdings is available here.

Passive Income Update – Jul 2019

Welcome to our monthly passive income update for July 2019. This is part of the scorecard series where we track our dividends and other sources of passive income. We also include changes and updates related to our investments during the month – showing the overall progress.

Passive Income  Update

Passive income for the month of July 2019 was CAD$900.31, which comprised of US$122.40 and CAD$738.74 (exchange rate is US$1 = CAD$1.32).

The change for the month is 3.76% QoQ and 41.75% YoY. This brings our passive income to $5,239.54 YTD and achieves 65.5% of our annual goal of $8K in passive income.

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3 Recent Buys – KMI, RACE, CSU

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A quick update on three purchases in our portfolios. It is getting harder and harder to find good value plays as the market seems be pushing the boundaries on the valuation front. With a lot of stocks trading close to 52-week highs, pickings have been pretty slim. However, due to an oversized cash position, I decided to pay up and put some capital to work.

  • First purchase: I added 200 shares of Kinder Morgan Inc (KMI) @ $19.97. I wrote more about my KMI decision during my last iteration in March. Click here to read about the reasoning. The stock yields 5.0% and adds $200.00 in annual dividends.
  • Second purchase: I added 25 shares of Ferrari N.V (RACE) @ $165.35. I wrote more about decision to buy this company earlier in July. Click here to read about the reasoning.
  • Third purchase: I added 6 shares of Constellation Software (CSU.TO) @ $1,252.00. Constellation continues to execute well and aggregate small VMS companies led by a brilliant leadership team. A small dividend is paid (yield of 0.4%), but this is a growth-focused stock.

Full Disclosure: Long CSU.TO, KMI, RACE. Our full list of holdings is available here.

Recent Sell – IPL, BTO

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A bit of portfolio cleanup with a couple of recent sales in my portfolio. As mentioned in my monthly outlook posts, I am looking for portfolio simplification — and as a result I want to be only invested in my high conviction ideas.

Instead of outright selling the stocks, I decided to write covered calls and let the market take care of it. The covered calls ended up in-the-money and got called away, but I have no regrets since I intended to sell these positions anyway.

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Outlook for August 2019

Summer doldrums are here, but no loss of excitement in the markets. The Fed has followed through in its most telegraphed move ever to cut interest rate. A cut of 25bps was almost a certainty as the Jul 31st decision date came close.

However, it seems like Chairman Powell may have shown his hand a bit more than expected. Trump has been calling for further cuts and announced more tariffs on Chinese goods. This increased the bond market’s pricing odds of another cut in Aug/Sep. While the stock market is cheering on, history has shown that rate cuts are seldom bullish for the economy and markets. It remains to be seen how things play out in the coming weeks/months.

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