Outlook for May 2020

Well, that rebound was much faster than expected. The stock market is back in bull mode after some good earnings releases over the past few days. Investors expecting the worst from companies like Alphabet & Facebook noted that the ad market slowdown wasn’t as bad. In addition, the companies were buying back stock providing a floor on the prices. So, the largest companies in the world are holding up the market pretty well.

The central bank panic also seems to have taken care of vol spike we saw in March. Vol is now down to the lows-to-mid-30s…and the US Fed after a massive expansion in balance sheet has started reducing the pace. It will be interesting to see what the next move will be from the central bankers as the world is used to getting a new hit everytime the last round of drugs wear off.

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2 Recent Buys – SPGI, MELI

BuySell

A quick update on a couple of recent buys in my portfolio. After a lot of sales in March, I have decided to start wading back into the markets as the volatility subsides.

  • First purchase: I continued adding more to my position in S&P Global Inc (SPGI) @ $280.70. I am starting to get close to a full position in this company, but may go for one more tranche if I see some weakness in coming weeks/months.
  • Second purchase: I initiated a new position in MercadoLibre Inc (MELI) @ $570.00. MercadoLibre is a fast growing e-commerce company focused on the Latin American market. It’s a company that I had heard about but only recently started researching. I have started a Twitter thread where I capture details about the company if you are interested in following along.

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

Full Disclosure: Long SPGI, MELI. Our full list of holdings is available here.

3 Recent Buys – BAM, BIP, EQX

BuySell

A quick update on recent buys in my portfolio. After a lot of sales in March, I have decided to start wading back into the markets as the volatility subsides.

  • First & second purchases: I re-initiated my position in Brookfield Asset Management (BAM.A.TO) @ $45.00 and Brookfield Infrastructure Partners LP (BIP.UN.TO) @ $55.00. Split-adjusted, I didn’t really time the market as well as I hoped, and just got them for a few percentage points lower than sale price; but I am starting off with a smaller position than what I had before the selloff. I will be looking to start building this position back up in coming weeks/months.
  • Third purchase: I added to my position in Equinox Gold (EQX.TO) @ $10.00. Equinox should see significant revenue growth in 2020 & 2021 and with it tremendous FCF depending on the spot price. This was an easy decision to add at this price point.

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

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

Baby R2R’s Portfolio Update – Q1 2020

This post is part of the series where I share the progress of Baby R2R’s investment portfolio. I started documenting this in Q3 2017 and intend to provide quarterly updates.

Baby R2R was born in Spring 2016 and a few months later, I setup her education fund to which I contribute on a regular basis. We live in Canada, so we take advantage of the RESP program (Registered Education Savings Plan), an account type where we can save and invest for our child’s secondary education. In addition to tax advantages, we also receive an education grant, which matches upto 20% of the saved amount (upto a max of $500 per year). How can anyone say no to free money? 🙂

In addition to the education fund, we also decided to start a Nest Egg fund, where we save and invest for Baby R2R and let compounding do its job over the course next couple of decades. The two accounts take different approaches to investing strategy.

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3 Recent Buys – SPGI, GOOGL, V

BuySell

A quick update on recent buys in my portfolio. After a lot of sales in March, I have decided to start wading back into the markets as the volatility subsides. I don’t know if these are good entry points or if more pain is ahead of us, but putting a bit of money to work seems prudent. Time will tell if this is a mistake or not.

  • First purchase: I re-initiated my position in S&P Global Inc (SPGI) @ $259.00. SPGI is one of my high conviction ideas that I believe will continue to do very well as the debt market expands. If you are looking to learn more, YourMTLBroker recently wrote a good overview post on SPGI here.
  • Second purchase: I re-initiated my position in Alphabet Inc (GOOGL) @ $1,199.00. Another high conviction idea for me even though I believe the stock price will be under pressure as the world cuts back on the ad spending. GOOGL still relies heavily on the ad market for the bulk of its revenue, but after selling GOOGL at $1500+ 4-5 weeks ago, I dont mind getting back in under $1200. I am starting off with a 1/4 position for now and will continue building to full position on weakness.
  • Third purchase: A completely new holding that I’ve never held before. I’ve had my eye on some names in fintech and finally decided to jump in during the ongoing correction. I initiated a position in Visa Inc (V) @ $166.00. Over the course of past few months, Ive had analysis-paralysis when coming to terms in picking between V & MA – they are both great companies and come with some pros and cons. Maybe I’ll just end up with both in the portfolio in the future? But for now, I have a small starter position in V with this move.

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

Full Disclosure: Long SPGI, GOOGL, V. Our full list of holdings is available here.