Deanco Investment “Group” Update – July 2020 (Month 33)
There is no group, it is just me and my money. I’m just a guy with a regular day job who likes keeping close tabs on his investing. Each month I’m sharing my investment portfolio, individual investments, and performance (good or bad). This is my July 2020 update (33 months of tracking it).
We are halfway through August and I’m just now getting my update out for July. Part of this is because it was our 25th wedding anniversary and we were on vacation together in the Great Smoky Mountains. The other part is July was a crazy month. I was so excited to calculate my performance for July because I knew it would be good. Alas, I was more excited about my wife and hiking tons of miles in the Great Smoky Mountains!
In July I had some positions do extremely well and I parted ways with some long-held individual stock positions. Precious metals and Bitcoin made major moves in July. Some individual stocks provided an exit (or simply needed to be done with). I’ve recently reassessed (see last month’s post) what I hold and along with COVID decided it no longer made sense for me to hold these positions. At this point, I’m done closing out individual stock positions (unless one provides me with an opportunity to exit). So, I had some winners and some losers.
All in all, the story this month was an 8.65% return on my portfolio (beating my blended index by 3.4%). I’ll take that any month!
I closed out a few individual stock positions during the month.
- $FCAU – Fiat Chrysler Auto – Fiat is merging with another company and will likely do alright in the long run. I just don’t need to own this stock as I don’t think it presents enough upside to warrant me owning this individual equity. I’ve been moving away from owning individual stocks for some time and recently changed up my criteria for owning them (and this one no longer meets my criteria). Selling at a slight loss to simplify my overall portfolio. I reinvested the proceeds into the Fidelity Industrials ETF.
- $M – Macy’s – I sold this stock, taking a fairly substantial loss. I believe, before COVID, they were in a position to stay alive and potentially spin up a worthwhile digital strategy. The actions they took (or rather didn’t take) during the COVID pandemic caused me to lose all faith in their ability. They shut completely down for an extended period. They drew down their credit facilities and ramped up their debt pretty dramatically. I don’t see how all that ends well. The straw that broke the camel’s back for me was when I needed to purchase something from Best Buy and they actually were open and doing business (just order online, pull up, and they put your merchandise in the car). Done. Easy. That is what a successful retailer would do. Pivot! While Macy’s was closed for business, the only news I saw (other than ramping debt, resigning CFO, and furloughed employees) was related to diversity hires and their fireworks show. Your business is not functioning and you aren’t fixing it…at all. You aren’t going to compete against Amazon like that. I’ll take the loss and survive. I’m not sure Macy’s will. $M(orons)! Regardless, ditto, doesn’t preset enough upside to warrant owning an individual position. This one adds the possibility of future extreme downside as well. Thanks, but no thanks! I reinvested the proceeds into the Fidelity Consumer Discretionary ETF.
- $PRU – Prudential Financial – Ditto, not enough reason to take the risk of owning an individual stock. Insurance companies are not easy to understand anyway so if I believe I have some insight into why it is absurdly undervalued I am wrong. I still think it is unnecessarily cheap but who knows what exposure they might have to some wild systemic risks that might arise. I’ve owned an insurer that had off-balance sheet troubles that was wiped out (remember a little company called AIG back in ’08). I won’t do that again. No thanks, not worth it. Selling at a slight loss to simplify my overall portfolio. I reinvested the proceeds into the Fidelity Financials ETF.
I think in general; I’m moving back to the mindset that individual stock picking is a waste of time and energy. Sure, you might pick a stock that outperforms and beats the market. You might also get side-swiped by something completely unexpected. No one knows which companies are going to prevail and which ones are going to hit hard times. The CEOs of these companies get paid a lot to think about that and take those risks. I’m not the CEO of those companies. I have my own company to run so I’ll focus most of my extra energy there (as I have for years). Investing is a side gig that I do with extra time. Individual stock picking takes far too much time and energy at this point in my life (and potentially ever again in my life).
I think in the future I’ll maintain a thoughtfully allocated portfolio and spend more time hiking in the woods with my beautiful wife of 25 years! I like the returns on that investment!
All that is subject to change next month, however! HA!
For full update download this ^^^ PDF.
My individual positions (and all kind of additional information about each of them) can be found here:
I’d love to talk about investing with you. Link up with me on Twitter https://twitter.com/joeydean72