At the beginning of the year, I put together a list of Top Investment Picks for 2019 from the investment community and track them on this website. This is just meant to be a fun exercise to see how the picks do. As part of the process, I intend do provide quarterly updates on the picks to see how they are doing. This is the update after Q3.
Most investors have heard Warren Buffett talk about economic moats of businesses. To jog some memory, here’s a quote from Berkshire’s 2000 annual meeting:
“So we think in terms of that moat and the ability to keep its width and its impossibility of being crossed as the primary criterion of a great business. And we tell our managers we want the moat widened every year. That doesn’t necessarily mean the profit will be more this year than it was last year because it won’t be sometimes. However, if the moat is widened every year, the business will do very well. When we see a moat that’s tenuous in any way — it’s just too risky. We don’t know how to evaluate that. And, therefore, we leave it alone. We think that all of our businesses — or virtually all of our businesses — have pretty darned good moats.”
At the beginning of the year, I put together a list of Top Investment Picks for 2019 from the investment community and track them on this website. This is just meant to be a fun exercise to see how the picks do. As part of the process, I intend do provide quarterly updates on the picks to see how they are doing. This is the update after Q2.
On the coattails of a gold rally in June, I reached a 5x return on my largest holding: Kirkland Lake Gold (KL.TO). This company has been a home run for me. I’d be lying if I said that it was all skill and no luck on this investment call. I was lucky and took a risk that paid off handsomely.
The following annotation shows all my purchases and one sale in KL.
As mentioned, I was lucky enough to come across this company early and followed Eric Sprott into this investment by first purchasing Newmarket Mining in October 2016. It was announced that Newmarket would merge with Kirkland Lake Gold to form a new mid-tier gold producer. Of course, at the time there were plenty of risks and uncertainties.
Further details of the transactions including all the ‘Recent Buy’ posts are linked below:
With all the purchases listed, my average share price was $10.97. I was able to achieve a CAGR of 84.3% (so far)!
Kirkland Lake continues to be a great performer and perhaps the best run company in the mining space. It continues to execute flawlessly de-risking projects and allocating capital appropriately (buybacks, dividends etc). KL has also been investing strategically to replenish its resources. My conviction in KL still remains high and the only reason for selling earlier this year was to reduce the weightage & concentration of one stock in my portfolio. I intend to let this holding free-ride and look forward to continued gains over the coming years.
Hopefully someday this will be a 10-bagger for me 🙂