Summer doldrums are here, but no loss of excitement in the markets. Every week we hear the same beat of the drums — trade negotiations, political circus, central bank policy commentary.
The treasury rates continue to weaken and bond market continues to price in rate cuts from the Fed and other central bankers. The amount of negative yielding debt is at a record and more securities continue to trade in negative territory. Whether this will result in an actual recession is anyone’s guess at this time.
The stock markets have done extremely well so far in 2019. The drop in markets in Q4 2018 and the low starting point for the YTD performance numbers help in showing spectacular returns.
On the coattails of a gold rally in June, I reached a 5x return on my largest holding: Kirkland Lake Gold (KL.TO). As with other investors in the space, this company has been a home run. 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%!
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). 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 🙂
A quick update on three recent purchases in my portfolio. One of these three purchases is a new company in my portfolio. This is a company that I have been obsessively reading about for months now and finally decided that I need to own a piece of it. As a growth-focused company, this may not appear cheap for value investors, but the company has a proven track record of amazing capital allocation, diligent screening process for its growth through acquisitions, a legendary leader, cornering various niche markets…and the list goes on.
Welcome to our monthly passive income update for May 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 April 2019 was CAD$573.79, which comprised of US$157.37 and CAD$361.34 (exchange rate is US$1 = CAD$1.35).
The change for the month is 12.7% QoQ and -17.4% YoY. This brings our passive income to $3,279.66 YTD and achieves 41% of our annual goal of $8K in passive income.
After a record climb between December and April, the market is cooling off again. May ended up being a bad month for a lot of sectors as the tariffs/trade war rhetoric picked up steam.
Not only is the US now targeting a trade war against China, but also Mexico — thats 2 out of 3 largest trading partners. Of course, investors are rushing to safe havens now, so treasuries & gold are doing well. Following graphic provides a quick overview of market sentiment at the end of May 2019.