I’m As Cold As Ice (not in a good way) With My Investing Right Now!

Deanco Investment “Group” Update – September 2019 (Month 23)

For full update download this ^^^ PDF.

Month In Review

I’m cold as ice right now! I go over what that means and how I’ve resized several positions to live to fight another day! 

My individual positions (and all kind of additional information about each of them) can be found here:

https://deanorolls.com/investing/my-current-portfolio/

It has been 4 months since I’ve done an update.  I’m getting caught up with everything here.  I’ve been doing this for 23 months now and have been keep track of this and reporting it on another Twitter account.  I’ve decided to start doing all this on my personal Twitter account and website.  I’ve been making that transition and am just now getting caught up.  So going forward everything I know about investing will be on my website at www.deanorolls.com/investing/ and on my Twitter handle a https://twitter.com/joeydean72 I’d love to talk investing with you!

Performance Update

From a performance standpoint, I’ve been just getting ‘pwned’ all year…on all fronts.  It was a great 2018 and the polar opposite in 2019 with bad news abundant.  It is a good thing I have a long-term mindset!  I think?!?  Almost every single one of my stocks has been bouncing along 52-week lows.  The fast-moving US stock market has now tracked me down and passed me up.  I’m dead even with the blended benchmark.  $VT is catching up to me fast.  Oh well…1-2 years hardly even matter in the grand scheme of things.

Current Asset Class Allocation

• Stocks 51%
• Commodities 26%
• Bonds 23%
• Cash 1%

I suspect stocks can/will go higher.  Just not mine 😦 That said, I still believe (and have since early 2018) that we are in a topping process in stocks.  I think that any upside will be hard-fought with greater probability of downside.  Valuations are too high and there is way too much that doesn’t make sense right now for me to be fully allocated to stocks (where I’d love to be).  I’ve lightened my stock exposure while maintaining 1) inflation protection (via cheaper commodities), 2) dry powder (via short duration bonds).  When I find good deals on stocks, I will buy them.  If the markets experience a dust-up, I will make major allocation changes. If no dust-up I like how I’m positioned now.

Over the past two months, I have been making some adjustments to my position sizes.  I’ve decreased the size of some of my larger individual stock positions.  I didn’t sell anything where I was down substantially.  I lightened positions where I was not down and invested the funds in the $VT ETF.  I am not having any problem keeping up with my portfolio so an increased number of holdings will work better for me (and give me some added flexibility I’d like to have).  Also, my bond position had gotten to be too high an allocation.  I added $MO and $PM this past month because I liked those companies as a long term holding.  I’m still a little too bond heavy so I’ll keep looking.

Transactions

July 2019

• No Transactions

Thinking: I may not have done much in the way of transactions this month but I’ve been busy!  Mainly closing down my old Twitter handle and spinning everything I was doing there here @joeydean72.  Also, my crappy portfolio has given me plenty to noodle on!

August 2019

• Sold: BSCJ – Invesco Bulletshare 2019 and BSCK – Invesco Bulletshare 2020
• Bought: SCHO – Schwab Short Term US Treasury ETF

Thinking: I have been holding my bond position in extremely short duration bonds (1 year or less) via two ETFs.  This is just money I have parked while I look for better investments.  I don’t hold it for any other reason (no judgment on interest rates, etc.)  I like the two ETFs I’ve held just fine and have been happy with the product.  I wanted to consolidate this position into a single ETF.  I also wanted to stay on the short end of the duration end so I don’t really have any exposure to the direction of interest rates.  I also decided holding US Treasuries might be better than having any corporate bond exposure.  This is higher quality.  I say this with my tongue lodged firmly in my cheek (as I don’t think the US Government is all that great a credit risks).  Don’t get me started!  I also think the yield curve is pointing towards the fact that short rates are still way too high and will fall.  That should provide a bit of tailwind to this position.

• Sold: Partial Positions (To Resize Positions) SIVR – Aberdeen Standard Physical Silver Shares ETF, BIIB – Biogen Inc. and MU – Micron Technology
• Bought: SCHO – Schwab Short Term US Treasury ETF and VT – Vanguard Total World Stock

Thinking: Operation Resize (Part 1)!  My portfolio has been just a big fat mess this year!  I could do no wrong in 2018 but 2019 has been one setback after another.  Every single stock I own has been bouncing around its 52-week low at one time or another this year.  One stock blew up completely (down over 90%), several are down 50%, and most are down greater than 15%.  I even currently own a few stocks that I don’t even want to own.  Stanley Druckenmiller says when you are not reading things right (cold) to lighten up until you get your mojo back (hot).  I’ve learned a lot in the two years I’ve done this and I’ve learned that some of the investments I’ve made I should not have.  Some of these are too absurdly beat up to dispose of however so I’m holding onto them for now (but they are on a short leash).  Then, of course, I could just be wrong about everything I’m doing and just own a bunch of garbage companies.  I don’t think that is the case but this is me…and that is generally how it goes around here!  Ha!  So anyway…I’m cold (or my portfolio is cold).  I’ve been putting a good deal of thought into all this throughout the year.  I’ve spent a good deal of time researching investments that I normally wouldn’t invest in to learn about different techniques that I might not be giving enough thought to in my process.  One thing I have decided is that I didn’t want some of the larger positions in my portfolio to suffer a similar fate.  I spent some time adjusting my position sizing.  I started to implement these rule changes in my portfolio this month.  I’m not abandoning my methodology at all I’m just going to limit how big an individual position can be within my portfolio.  Nothing too drastic either.  My larger positions are between 5-6% now and with this change will be around 4% (or less).  This will give me more flexibility than I have today.  If I want to add to a position, I’ll be better able to do that.  With many of the cyclical type companies I invest in you really have to be prepared to add (even substantially) if you get the cycle wrong.  This will also allow me to add more companies easier (so I can better diversify across sectors and industries).  Now that I’ve been doing this for almost 2 years, I realize I’m not really trading in/out of companies often so it is fairly easy for me to keep tabs on my portfolio.  I’ve also decided that if I can’t find individual companies that I’m in love with I’ll just invest in the $VT ETF (and be fine with that).  I started implementing that all this month.  I lightened up my position in SIVR – Aberdeen Standard Physical Silver Shares ETF, BIIB – Biogen Inc. and MU – Micron Technology.  I was either up or even in each of these names and they were some of my largest positions.  I hate selling all three of these.  I believe they are all great investments.  That said, it is not prudent to hold large positions like this when I am obviously cold as ice right now.

September 2019

• Sold: Partial Positions (To Resize Positions) HA – Hawaiian Holdings, VIAB – Viacom Class B, FCAU – Fiat Chrysler Auto, and ARLP – Alliance Resource Partnership
• Bought: SCHO – Schwab Short Term US Treasury ETF and VT – Vanguard Total World Stock

Thinking: Operation Resize (Part 2)!  I continued to resize the positions of some of the larger companies in my portfolio in September.  The market moved some of these names for me and I made the adjustments.  Each of these positions was not very far away from where I needed them to be so these were really just fairly minor tweaks.  I was down a bit in some of them from where I bought them but nothing too out of line (I’m not doing any fire sales here).

• Sold: VT – Vanguard Total World Stock
• Bought: TUSK – Mammoth Energy Services

Thinking: This stock is down 93% from when I initially bought it.  It is making me its whipping boy.  There is a good chance I’ll lose every penny I have put in it.  I’m going against my better judgment and going for the elusive Triple Down (and no, I didn’t skip the also rare Double Down).  The share price is absurd and if they survive everything going against them the shares I just bought will be worth a lot more one day a long time from now.  If they don’t survive, I’ll just work a while longer before I retire.  I’ve analyzed this thing six ways to Sunday and think it will be fine…someday!  When you are crying you should be buying!  I guess!?!                                                                                                                                           

• Sold: SCHO – Schwab Short Term US Treasury ETF
• Bought: MO – Altria Group Inc. & PM – Philip Morris International

Thinking: My bond position had gotten a bit too large for my liking over the past few months.  This is due to my equities doing poorly and also the resizing I had been doing (I had dumped some of that money into bonds until I could find a home for it).  This stock is actually one of the reasons for the resizing.  I wanted to own it but was having trouble finding a way to make it fit where I wanted it.  I had been looking at Altria/Philip Morris for a long time (a couple of decades actually…ha!).  The news has been nothing but bad recently in these names so I finally pulled the trigger and invested in these two companies. I consider this investment really to be one company (they are talking merging).  If they don’t merge, I want to own them both and will just hold the individual companies.

Things I’m Working On Now

• Website Investing Page – I’ve been pulling together all my writing about each of the investments I’ve done over the years into my new investing page (www.deanorolls.com/investing/).  It is so good to write down what is going through your mind when you make an investment for reference later.  Most all of my investments are pretty long term so it is good to be able to review things a year or so later to see if things worked out as I anticipated (or not).  If you are interested in my thoughts on a particular investment you can read them as well.  Enjoy…or laugh…
• Annual Reassessments – I have a few investments that I need to do my annual assessment.  I’ll begin working on those.
• Get Aggressive On Stock Allocation – I also am becoming more and more convinced that stocks might be about to continue higher.  I’m positioned for a top and have been sitting safely aside not really wanting to be knee-deep in stocks.  If my suspicion is accurate, I am not positioned for that.  I have some things I want to do in my portfolio right now so I’m going to get more aggressive on researching those ideas.