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Salvor's Moats, Punts and Trusts strategy

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
SalvorHardin
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Re: Salvor's Moats, Punts and Trusts strategy

#449138

Postby SalvorHardin » October 10th, 2021, 5:06 pm

flyer61 wrote:Curious Salvor as to why you ditched National Grid..

Wish Disney would reinstate a dividend.

I sold National Grid for two reasons:

1) I wanted to raise some cash to buy some more Diageo. So far so good, (since the trades, Diageo are up by 21% including dividend whereas National Grid are up 10%)

2) National Grid was my smallest holding when I sold it (0.6% of portfolio) and I had decided earlier in the year to reduce my number of shareholdings.

I'm ambivalent about Disney's dividend for a few years. The cash can usefully be deployed to beef up its streaming service. Using the dividend cash to instead spend a few extra billion dollars on content in the next couple of years should pay off handsomely.

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Re: Salvor's Moats, Punts and Trusts strategy

#449159

Postby flyer61 » October 10th, 2021, 6:27 pm

Fair enough!

Bank of Montreal has nearly doubled for me so if our paths ever cross the beers are on me!

Equity holdings I have at the moment in order of size

Microsoft
Philip Morris
Stag Industrial
Pepsico
Unilever
Diageo
Johnson and Johnson
Estee Lauder
Svenska Handelsbanken
KONE
Bank of Montreal
National Grid
Kimberley Clark
L'Oreal
WP Carey
Walt Disney
3M Company
Activision Blizzard
Novo Nordisk
Illinois Tool Works
Automatic Data Processing
Otis Worldwide

VMID and Finsbury Growth and Income Trust cover the UK for me
Caledonia, Murray International, Middlefield Canadian, Smithson, HFEL, BRWM, Scottish Mortgage, NAIT and JP Morgan European are my IT's
A few small UK REITS EPIC, SREI, BREI and AIRE
and that is about it. Those above I will have to live off the dividend income, hopefully it will be a growing stream
Large holding of Fundsmith outside of any wrapper. Negligible bonds at the moment.

Anything you would be happy buying in these febrile times....thinking of opening a position in Union Pacific and Clorox. Diageo, Caledonia, VMID and possibly Unilever are on the list for top ups also. Cash is about 6% of the portfolio, normally would not be this high but I sense trouble with the yield curve starting to rise at the long end....stagflation?

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Re: Salvor's Moats, Punts and Trusts strategy

#449236

Postby SalvorHardin » October 11th, 2021, 10:32 am

flyer61 wrote:Anything you would be happy buying in these febrile times....thinking of opening a position in Union Pacific and Clorox. Diageo, Caledonia, VMID and possibly Unilever are on the list for top ups also. Cash is about 6% of the portfolio, normally would not be this high but I sense trouble with the yield curve starting to rise at the long end....stagflation?

In the second half of 2021 my new investments have been (with reasons):

Sold:
Moderna (sold about 20%; it's a big holding that isn't in my circle of competence which has done amazingly well)

SL Green Realty (Manhattan offices, bought earlier this year as a bombed-out recovery play, I am now much less confident about New York's recovery and the very lax attitude that the authorities in Democrat controlled cities have towards crime and in particular property damage)

Top-Ups:
Ocean Wilsons Holdings (anticipate a recovery in Brazil exports, also larger discount to NAV than normal when I topped up)

Derwent London (better prospects for Central London offices)

J. D. Wetherspoon (anticipate recovery in pubs (Wetherspoons is the 800 pound gorilla of British pubs) and its expansion into Ireland is going well)

Brookfield Asset Management, Carlyle Group and KKR (lots of money going into real assets and private equity over the next decade)

Canadian Pacific (anticipate huge benefits from takeover of Kansas City Southern railroad (and share price has fallen quite a bit due to the takeover)

New purchases:
Portmeirion. Cheap, recovery play as households buy more pottery with the return to more normal trading around the world

Seraphim Space Investment Trust. This is a venture capital fund under an Investment Trust umbrella, in a sector where the manager have an excellent track record. Space is a sector where I expect to see huge growth in the next couple of decades)

ViacomCBS. Very cheap media company (historical and forward PE of about 10). Bought with the expectation of further consolidation in the streaming market.

EDIT: I should add that I'm not too concerned about inflation. I don't own any fixed interest and have a lot in companies which have assets whose real value is somewhat resistant to inflation (commercial property, infrastructure) or have very strong brands and pricing power (e.g. Diageo)

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Re: Salvor's Moats, Punts and Trusts strategy

#449280

Postby Lootman » October 11th, 2021, 1:26 pm

SalvorHardin wrote:
Sold:
Moderna (sold about 20%; it's a big holding that isn't in my circle of competence which has done amazingly well)

J. D. Wetherspoon (anticipate recovery in pubs (Wetherspoons is the 800 pound gorilla of British pubs) and its expansion into Ireland is going well)

Brookfield Asset Management, Carlyle Group and KKR (lots of money going into real assets and private equity over the next decade)

Canadian Pacific (anticipate huge benefits from takeover of Kansas City Southern railroad (and share price has fallen quite a bit due to the takeover)

New purchases:
Portmeirion. Cheap, recovery play as households buy more pottery with the return to more normal trading around the world

Seraphim Space Investment Trust. This is a venture capital fund under an Investment Trust umbrella, in a sector where the manager have an excellent track record. Space is a sector where I expect to see huge growth in the next couple of decades)

With you on some of these. I also sold some Moderna, although at a lower price than current.

Have held JDW for years, and have been thinking of staying at their new flagship hotel in Dublin to see how that model is working.

Blackstone (BX) is another idea for private equity. I bought earlier this year and it is already up handsomely. It converted from limited partnership to corporation, which makes tax reporting much simpler, no K-1 any more.

I also bought CP when the takeover was announced and the price went down. Had been looking to add to rails - have owned Union Pacific for a few years.

Portmeirion - owned this for a few years and it did nothing, so sold a few months ago. Probably a good buy indicator. :D

There is a new ARK space ETF, ticker ARKX, as an alternative for investing galactically!

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Re: Salvor's Moats, Punts and Trusts strategy

#449285

Postby monabri » October 11th, 2021, 1:33 pm

flyer61 wrote:Fair enough!

Bank of Montreal has nearly doubled for me so if our paths ever cross the beers are on me!

Equity holdings I have at the moment in order of size

Microsoft
Philip Morris
Stag Industrial
Pepsico
Unilever
Diageo
Johnson and Johnson
Estee Lauder
Svenska Handelsbanken
KONE
Bank of Montreal
National Grid
Kimberley Clark
L'Oreal
WP Carey
Walt Disney
3M Company
Activision Blizzard
Novo Nordisk
Illinois Tool Works
Automatic Data Processing
Otis Worldwide

VMID and Finsbury Growth and Income Trust cover the UK for me
Caledonia, Murray International, Middlefield Canadian, Smithson, HFEL, BRWM, Scottish Mortgage, NAIT and JP Morgan European are my IT's
A few small UK REITS EPIC, SREI, BREI and AIRE
and that is about it. Those above I will have to live off the dividend income, hopefully it will be a growing stream
Large holding of Fundsmith outside of any wrapper. Negligible bonds at the moment.

Anything you would be happy buying in these febrile times....thinking of opening a position in Union Pacific and Clorox. Diageo, Caledonia, VMID and possibly Unilever are on the list for top ups also. Cash is about 6% of the portfolio, normally would not be this high but I sense trouble with the yield curve starting to rise at the long end....stagflation?


Don't know about the REITs but the rest of the PF looks pretty darn good. Holding cash for prudent opportunistic top ups seems a good idea.

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Re: Salvor's Moats, Punts and Trusts strategy

#449529

Postby flyer61 » October 12th, 2021, 1:57 pm

Thanks monabri,

It is designed so that when I pop my clogs my other half knows she does not need to do a thing. Just take the income she needs from it and it should last her lifetime as well. The kids can then squabble over the remaining capital pot.

I

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Re: Salvor's Moats, Punts and Trusts strategy

#450367

Postby ADrunkenMarcus » October 15th, 2021, 2:35 pm

Thanks for sharing! We have some holdings in common - Unilever (2013), Diageo (1998) and Kone (2017).

Best wishes


Mark.

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Re: Salvor's Moats, Punts and Trusts strategy

#452994

Postby TUK020 » October 25th, 2021, 6:25 pm

SalvorHardin wrote:Strong Moats. Like the moats surrounding medieval castles deterred attackers, economic moats provide some protection. These moats aim to fend off competitors who are looking to enter your markets thus reducing your pricing power and market share. Moats are things like strong brands, network effects, customer loyalty, product quality, patents and geography. Too often a company starts off brightly, then finds out that competitors eat into its markets and its shares end up on a low P/E ratio.

North America’s freight railroads have an excellent moat. No-one is going to build a new railroad and trucks can’t compete over longer distances because the laws of physics make it much more energy efficient to use rail. Also rail is much greener than the road, which gives it a political moat in these times. The geography of North America makes freight vastly more profitable than in Europe where the distances between major settlements are much shorter. About the only downside is that they are cyclical businesses, being so heavily integrated into the American and Canadian economies. My largest railroad holdings are Union Pacific (5.5%) and Canadian Pacific (4.8%).

Global Private Equity. These companies manage clients’ money as well as their own in a very wide variety of investments. Their “moat” is a combination of economies of scale, expertise and their track record. Canada’s Brookfield Asset Management (5%) is heavily into commercial property, infrastructure and renewable energy, whilst Carlyle Group (2.9%) and KKR (2.1%) are traditional private equity companies that are popularly called “asset strippers” but really own and operate a lot of long-term investments.

My other main “moat” companies are Warren Buffett’s Berkshire Hathaway (4.6%) which amongst other things owns the BNSF railroad, Disney (2.7%) is the world’s biggest entertainment conglomerate and multinational consumer goods company Unilever (2.1%). Also Bank of Montreal (3.7%) because it’s a Canadian Bank (regulators in Canada have created a moat for the big banks by being much stricter than Britain whose banks are very good at recklessly losing money).

As a rule, I avoid technology shares. This preference dates back to the dotcom boom of the late 1990s when several colleagues, having piled into all sorts of .com stuff, saw their dreams vaporise whilst I was generating annual returns for a few years well in excess of 50% mostly thanks to oil explorers like Soco International.

I see a lot of parallels between now and the latter months of the dotcom boom. IMHO some “technology” companies are little more than the equivalents of companies taking orders by telephone in the 1890s. Innovative at the time, sure. Ground-breaking and justifying enormous valuations relative to earnings? Not.

Salvor's excellent post on moats has got me thinking.

One of the companies I am thinking hard about is Taiwan Semiconductor Manufacturing Co. (TMSC)
A tech company in a high growth market, with a dominant position, and getting stronger. It has >50% market share for contract manufacturing of ICs for other semi companies, and this position obscures the fact that it is much more dominant in the newer small line width technology for higher performance devices.

The semiconductor business is a base industry for the 21st century - probably a bit like steel, oil and railroads for the last century. It is not a tech business that is likely to fold like a house of cards in some major scandal/consumer shift (I would worry about Facebook, for example).
It is hugely capital intensive, and while this might be considered to be an unattractive aspect, it is one that considerably adds to the 'moat'.
It is a sizeable operation, has companies like Apple as its major customers, a capitalisation of over $1/2 trn, and a share price that has quadrupled over the last decade.

The major risk that I could see would be a China invasion of Taiwan (indeed it would be one of the prizes that would be worth fighting for).

So: an enduring and rapidly growing market, a dominant worldwide position that combined with the capital investment required to challenge it means that it is not just dominant but intimidatingly so, and a high margin business.
This feels like it should keep getting better....
What am I missing?

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Re: Salvor's Moats, Punts and Trusts strategy

#453001

Postby richfool » October 25th, 2021, 7:55 pm

TUK020 wrote:Salvor's excellent post on moats has got me thinking.

One of the companies I am thinking hard about is Taiwan Semiconductor Manufacturing Co. (TMSC)
A tech company in a high growth market, with a dominant position, and getting stronger. It has >50% market share for contract manufacturing of ICs for other semi companies, and this position obscures the fact that it is much more dominant in the newer small line width technology for higher performance devices.

The semiconductor business is a base industry for the 21st century - probably a bit like steel, oil and railroads for the last century. It is not a tech business that is likely to fold like a house of cards in some major scandal/consumer shift (I would worry about Facebook, for example).
It is hugely capital intensive, and while this might be considered to be an unattractive aspect, it is one that considerably adds to the 'moat'.
It is a sizeable operation, has companies like Apple as its major customers, a capitalisation of over $1/2 trn, and a share price that has quadrupled over the last decade.

The major risk that I could see would be a China invasion of Taiwan (indeed it would be one of the prizes that would be worth fighting for).

So: an enduring and rapidly growing market, a dominant worldwide position that combined with the capital investment required to challenge it means that it is not just dominant but intimidatingly so, and a high margin business.
This feels like it should keep getting better....
What am I missing?

It might not be a case of what are you missing, but rather, "what have you missed". TSMC is a significant, if not large holding in many Asian and Global Investment trusts, including for example: AAIF, JAGI, HFEL and KPC., and has been for quite some time. Noting the global shortage of semi-conductors and also regional risks, I leave the decision as to whether TSMC has further upside to go or not, to the managers of the trusts concerned, or at least the ones that I hold. ;)

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Re: Salvor's Moats, Punts and Trusts strategy

#453088

Postby TUK020 » October 26th, 2021, 8:03 am

richfool wrote:It might not be a case of what are you missing, but rather, "what have you missed". TSMC is a significant, if not large holding in many Asian and Global Investment trusts, including for example: AAIF, JAGI, HFEL and KPC., and has been for quite some time. Noting the global shortage of semi-conductors and also regional risks, I leave the decision as to whether TSMC has further upside to go or not, to the managers of the trusts concerned, or at least the ones that I hold. ;)

HFEL, FCIT & MYI from the ones I hold.
I was wondering whether to top up with a direct holding

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Re: Salvor's Moats, Punts and Trusts strategy

#453095

Postby JohnW » October 26th, 2021, 8:40 am

TUK020 wrote:This feels like it should keep getting better....
What am I missing?

If you're referring to a significant part of your portfolio in one company then you're missing the free risk reduction that comes with a more diversified portfolio. For that, you're taking the possibility of out-performing a more diversified portfolio, or under-performing one. Forgoing a free benefit for the possibility of a different benefit. Not a hanging crime, but I think that captures it.

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Re: Salvor's Moats, Punts and Trusts strategy

#454132

Postby TUK020 » October 29th, 2021, 12:44 pm

JohnW wrote:
TUK020 wrote:This feels like it should keep getting better....
What am I missing?

If you're referring to a significant part of your portfolio in one company then you're missing the free risk reduction that comes with a more diversified portfolio. For that, you're taking the possibility of out-performing a more diversified portfolio, or under-performing one. Forgoing a free benefit for the possibility of a different benefit. Not a hanging crime, but I think that captures it.


Not a significant % of my portfolio overall.
What I have done is take a small stake in BG Key Positive Changes IT (KPC), which has its two largest holdings as Moderna (12%) & TSMC (6%).
This fits with a) my long term shift to ITs for ease of management, b) gradual, rather than dramatic portfolio shifts, and c) more focus on long term growth prospects

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Re: Salvor's Moats, Punts and Trusts strategy

#454148

Postby TUK020 » October 29th, 2021, 1:25 pm

TUK020 wrote:
JohnW wrote:
TUK020 wrote:This feels like it should keep getting better....
What am I missing?

If you're referring to a significant part of your portfolio in one company then you're missing the free risk reduction that comes with a more diversified portfolio. For that, you're taking the possibility of out-performing a more diversified portfolio, or under-performing one. Forgoing a free benefit for the possibility of a different benefit. Not a hanging crime, but I think that captures it.


Not a significant % of my portfolio overall.
What I have done is take a small stake in BG Key Positive Changes IT (KPC), which has its two largest holdings as Moderna (12%) & TSMC (6%).
This fits with a) my long term shift to ITs for ease of management, b) gradual, rather than dramatic portfolio shifts, and c) more focus on long term growth prospects

Correction, top 10 holdings copied from a post on IT board
Tesla Inc 8.1%
TSMC 6.6
M3 6.5
ASML 6.4
Moderna 6.3
MercadoLibre 5.1
Illumina 4.8
Dexcom 3.8
Umicore 3.7
Alphabet 3.3
Total top 10 54.6%

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Re: Salvor's Moats, Punts and Trusts strategy

#459414

Postby Sorcery » November 19th, 2021, 8:17 pm

TUK020 wrote:
TUK020 wrote:
JohnW wrote:If you're referring to a significant part of your portfolio in one company then you're missing the free risk reduction that comes with a more diversified portfolio. For that, you're taking the possibility of out-performing a more diversified portfolio, or under-performing one. Forgoing a free benefit for the possibility of a different benefit. Not a hanging crime, but I think that captures it.


Not a significant % of my portfolio overall.
What I have done is take a small stake in BG Key Positive Changes IT (KPC), which has its two largest holdings as Moderna (12%) & TSMC (6%).
This fits with a) my long term shift to ITs for ease of management, b) gradual, rather than dramatic portfolio shifts, and c) more focus on long term growth prospects

Correction, top 10 holdings copied from a post on IT board
Tesla Inc 8.1%
TSMC 6.6
M3 6.5
ASML 6.4
Moderna 6.3
MercadoLibre 5.1
Illumina 4.8
Dexcom 3.8
Umicore 3.7
Alphabet 3.3
Total top 10 54.6%


How surprising. That's very close to my portfoliio (4 out of 10 anyway). I think I see the influence of US TMF paid for recommendations in there, though it might be coincidence. Going back to the OP which as I understood it was on the subject of TSMC. Yes the moats are deep. Intel describe it as playing Russian Roulette, you bet the company every 5 years and 3 years later you find out whether you have blown your brains out. TSMC have competition though, Samsung and TSMC are racing each other towards 3nm. Apple are the big name customer for TSMC's leading edge products, followed by AMD and soon Intel themselves. Samsung are in with a chance though, NVIDIA are using them for their latest products. AMD may do so too as an alternative source.

I came at this from a different angle, I have been using AMD's products for 20 years because they gave me the best performance/$ spent. I gravitated towards the US Motley fool board for AMD, because they have some very knowledgeable people on it who talked sense. I post regularly there https://boards.fool.com/advanced-micro- ... d=34983440 but am not the most knowledgeable or perhaps sensible :-) Anyway on the AMD board they started to talk about the upcoming Ryzen 1 processor, got rather excited about it, took a punt, bought 100k shares at $6.67 prior
to Ryzen's release. When Ryzen 1 came out I was gobsmacked by what could be done with them. Bought shelf loads of machines, to great effect for my business. Started to realise that TSMC was at the centre of a web of connected companies, not only AMD and Apple but ASML (who seem to have a monopoly) on producing very accurate mirrors required for accurate and low nm lithography. So in for one, in for all, bought TSMC and ASML.
Now my top 3 holdings (that I want to talk about) look like :
AMD after selling half, 10%,
TSMC 5.6%
ASML 4.2%
There is a Russian goldminer that would come in at number 2, that I got sucked into and wish I hadn't.

TSMC is probably the most advanced semiconductor manufacturing company on the planet. They do have competition though. IBM are pretty close technologically but seem to have come off the boil on earnings.

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Re: Salvor's Moats, Punts and Trusts strategy

#516659

Postby absolutezero » July 23rd, 2022, 4:34 pm

SalvorHardin wrote:I retired in 2003, live off my portfolio and the only pension I can look forward to is a very much reduced state pension. No need to chase income thanks to the combination of a decent sized portfolio and low living costs. My main concern is preserving the real value of both capital and income.

I diversify heavily across the world, mostly into America (31.5%), Canada (14%) and Emerging Markets (9%). I currently have 36 shareholdings (23 operating companies and 13 investment trusts). Diversifying includes using several brokerage accounts and keeping about 30% in certificated form to reduce broker default risk.

The portfolio is split into four parts (all percentages below are % of portfolio):

1) 30% in Investment trusts. These provide a stable base which I don’t need to think much about
2) 48% Companies with what I believe to be strong examples of what Warren Buffett calls a “moat” aka “economic moat”.
3) 20% “Punts” – speculative investments where I can afford to lose the lot
4) 2% Cash

My “British” portfolio is dominated by large multinationals such as Diageo (3.8%). Some “British” companies are only British because they are listed in London. One such is Ocean Wilsons Holdings (2.8%), a Bermudan investment company whose main asset is a majority stake in a Brazilian shipping and port logistics company with the remainder being a diversified international portfolio.

Burberry (2.7%) is Britain’s top luxury goods company. Strong brands, but it has had a rough time recently thanks to the Chinese crackdown on conspicuous consumption adding to the coronavirus. One day I expect Burberry to be taken over by someone like LVMH.

Investment Trusts. My biggest holdings are Foreign & Colonial (4%), Finsbury Growth & Income (4%) and Henderson Smaller Companies (4%). The other names would be familiar, such as Caledonia Investments (2.1%), Law Debenture (2.2%) Templeton Emerging Markets (3.9%) and TR Property (2.6%).

“Punts” used to be a very small part of the portfolio. In recent years punts have grown substantially due to the performance of several companies, notably the mRNA biotechnology company Moderna (5.1% after selling a lot), the film and TV studio Lions Gate (4.1%) and the media conglomerate ViacomCBS (4.5%).

Moderna is a bet on mRA technology developing a new field of medicine, though it is well supported by its coronavirus vaccine. IMHO it’s my most speculative holding by some way. Lions Gate and ViacomCBS are bets on consolidation in streaming. ViacomCBS is particularly cheap IMHO on a PE of around 10, though the spectacular run up from $30 to $100 driven by the Archegos Capital family office, before collapsing to $40, has somewhat dented investor confidence (I bought at an average of $23 selling at an average of $88, going back in at $39).

Another punt is Seraphim Space (2.1%), a new investment trust which is a venture capital fund. “Space” (near Earth orbit) is a sector which is going to grow rapidly in the next couple of decades, particularly satellites and monitoring debris (i.e. avoiding incidents such as that seen in the 2013 film “Gravity”). There is a lot of private sector interest in space, reflected in the large number of planned small satellite launches. One such is Elon Musk’s Space X, which has roughly 1,800 satellites in orbit and hopes to increase this to 12,000 by 2026.

Strong Moats. Like the moats surrounding medieval castles deterred attackers, economic moats provide some protection. These moats aim to fend off competitors who are looking to enter your markets thus reducing your pricing power and market share. Moats are things like strong brands, network effects, customer loyalty, product quality, patents and geography. Too often a company starts off brightly, then finds out that competitors eat into its markets and its shares end up on a low P/E ratio.

North America’s freight railroads have an excellent moat. No-one is going to build a new railroad and trucks can’t compete over longer distances because the laws of physics make it much more energy efficient to use rail. Also rail is much greener than the road, which gives it a political moat in these times. The geography of North America makes freight vastly more profitable than in Europe where the distances between major settlements are much shorter. About the only downside is that they are cyclical businesses, being so heavily integrated into the American and Canadian economies. My largest railroad holdings are Union Pacific (5.5%) and Canadian Pacific (4.8%).

Global Private Equity. These companies manage clients’ money as well as their own in a very wide variety of investments. Their “moat” is a combination of economies of scale, expertise and their track record. Canada’s Brookfield Asset Management (5%) is heavily into commercial property, infrastructure and renewable energy, whilst Carlyle Group (2.9%) and KKR (2.1%) are traditional private equity companies that are popularly called “asset strippers” but really own and operate a lot of long-term investments.

My other main “moat” companies are Warren Buffett’s Berkshire Hathaway (4.6%) which amongst other things owns the BNSF railroad, Disney (2.7%) is the world’s biggest entertainment conglomerate and multinational consumer goods company Unilever (2.1%). Also Bank of Montreal (3.7%) because it’s a Canadian Bank (regulators in Canada have created a moat for the big banks by being much stricter than Britain whose banks are very good at recklessly losing money).

As a rule, I avoid technology shares. This preference dates back to the dotcom boom of the late 1990s when several colleagues, having piled into all sorts of .com stuff, saw their dreams vaporise whilst I was generating annual returns for a few years well in excess of 50% mostly thanks to oil explorers like Soco International.

I see a lot of parallels between now and the latter months of the dotcom boom. IMHO some “technology” companies are little more than the equivalents of companies taking orders by telephone in the 1890s. Innovative at the time, sure. Ground-breaking and justifying enormous valuations relative to earnings? Not.

Thought I would resurrect this. Was a good discussion at the time and got me shift things about so as to be less UK centric.

How is your portfolio looking now? Any changes compared to the back end of last year?

What are you considering either buying or selling at the moment?

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Re: Salvor's Moats, Punts and Trusts strategy

#516667

Postby SalvorHardin » July 23rd, 2022, 5:21 pm

absolutezero wrote:Thought I would resurrect this. Was a good discussion at the time and got me shift things about so as to be less UK centric.

How is your portfolio looking now? Any changes compared to the back end of last year?

What are you considering either buying or selling at the moment?

Down about 5% in 2022. I have made a fair few changes. Last week I took 5 years of my reserve of 6 years worth of living expenses and put it into the market, taking the view that a few bargains had come into view.

The big change is that I have trimmed my American holdings (selling at least 30% of every shareholding except Berkshire Hathaway, most of Moderna, all of ViacomCBS).

IMHO America is becoming increasingly lawless and corrupt, with Democrat politicians encouraging mobs to burn down parts of inner cities and refusing to properly prosecute property crimes, including organised shoplifting (aka burglary). The ongoing refusal of the Federal Authorities to prosecute mobs that are picketing Supreme Court Justices' homes is the sort of thing I'd only expect to see in Banana Republics.

Sold Seraphim Space before its share price fell apart. Sold Templeton Emerging Markets (not keen on China).

My big new buy is Farmland Partners (6.2% of portfolio) which is the easiest way to invest in farmland. Bought some Games Workshop (2%) at £60 after it had halved (it has huge customer loyalty). Small purchases of Thales (makes the NLAW anti-tank missile) and several other companies (each less than 0.5%).

Most recent purchases: big top ups in Derwent London (5%) and Great Portland Estates (4.5%). Also bought Schroder REIT (2.4%), Patria Investments (1.2%) plus top ups for Canadian Pacific, Brookfield Asset Management (both now 7%, my two largest holdings) and Carlyle Group (3.9%).

I have taken a big bet on central London Property, where you could recently buy at discounts of around 35% of NAV. I think the demand for prime office space isn't going to be anything like as severely affected by working from home as some are forecasting.

Demand for central London offices seems to be quite strong, according to recently posted prices and comments by Derwent London when it recently sold part of Bush House.

Almost 50% of my portfolio is in just three sectors: Commercial Property, North American railroads and Alternative Asset Managers (Brookfield, Carlyle, Patria).

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Re: Salvor's Moats, Punts and Trusts strategy

#516673

Postby scrumpyjack » July 23rd, 2022, 5:51 pm

I have been increasing my holdings of CLDN, RCP and FCIT. I had built up far too much cash for various reasons and felt that markets had come back enough to swing the balance from holding too many depreciating pounds. I know one can’t time the markets and I can’t really be bothered with trying to pick individual shares. I have large holdings in some individual shares but don’t think they are overpriced and don’t like paying CGT, so I’m leaving them be, including in the non taxable accounts.

So portfolio now is 52% ITs and ETFs, 9% cash and the rest spread over some very solid individual companies.

Absolutely no fixed interest.

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Re: Salvor's Moats, Punts and Trusts strategy

#516675

Postby SalvorHardin » July 23rd, 2022, 5:58 pm

Forgot to add that I also sold Unilever, an increasingly badly run company whose senior management act more like they're running a pressure group than a multinational consumer goods company. Ben & Jerry's parrotting Russian propaganda before the invasion of Ukraine was a disgrace.

Also sold Disney after senior management spoke out in favour of allowing Florida's schools to aggressively promote sex changes to children as young as five.

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Re: Salvor's Moats, Punts and Trusts strategy

#516677

Postby absolutezero » July 23rd, 2022, 6:16 pm

SalvorHardin wrote:
absolutezero wrote:Thought I would resurrect this. Was a good discussion at the time and got me shift things about so as to be less UK centric.

How is your portfolio looking now? Any changes compared to the back end of last year?

What are you considering either buying or selling at the moment?

Down about 5% in 2022. I have made a fair few changes. Last week I took 5 years of my reserve of 6 years worth of living expenses and put it into the market, taking the view that a few bargains had come into view.

The big change is that I have trimmed my American holdings (selling at least 30% of every shareholding except Berkshire Hathaway, most of Moderna, all of ViacomCBS).

IMHO America is becoming increasingly lawless and corrupt, with Democrat politicians encouraging mobs to burn down parts of inner cities and refusing to properly prosecute property crimes, including organised shoplifting (aka burglary). The ongoing refusal of the Federal Authorities to prosecute mobs that are picketing Supreme Court Justices' homes is the sort of thing I'd only expect to see in Banana Republics.

Sold Seraphim Space before its share price fell apart. Sold Templeton Emerging Markets (not keen on China).

My big new buy is Farmland Partners (6.2% of portfolio) which is the easiest way to invest in farmland. Bought some Games Workshop (2%) at £60 after it had halved (it has huge customer loyalty). Small purchases of Thales (makes the NLAW anti-tank missile) and several other companies (each less than 0.5%).

Most recent purchases: big top ups in Derwent London (5%) and Great Portland Estates (4.5%). Also bought Schroder REIT (2.4%), Patria Investments (1.2%) plus top ups for Canadian Pacific, Brookfield Asset Management (both now 7%, my two largest holdings) and Carlyle Group (3.9%).

I have taken a big bet on central London Property, where you could recently buy at discounts of around 35% of NAV. I think the demand for prime office space isn't going to be anything like as severely affected by working from home as some are forecasting.

Demand for central London offices seems to be quite strong, according to recently posted prices and comments by Derwent London when it recently sold part of Bush House.

Almost 50% of my portfolio is in just three sectors: Commercial Property, North American railroads and Alternative Asset Managers (Brookfield, Carlyle, Patria).

Always interesting.
I'm of the opinion that some parts of America are in (possibly terminal) decline - mostly the Democrat run states (California having effectively legalised shoplifting as anything under $800 will not involve the police) but the US market drives the global stock markets. So corruption aside (expect similar here should L*bour ever get back into power) you can't really avoid having broad exposure to the US.

I also dumped ULVR - similar reasons as it's run by idiots but also because people can easily buy own brand stuff, so ULVR's moat isn't as wide as they think it is.
I don't touch 'Emerging Markets' because of the China risk - i.e. you own a company until Xi decides you don't.

Where do you get your ideas about general trends?

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Re: Salvor's Moats, Punts and Trusts strategy

#516686

Postby SalvorHardin » July 23rd, 2022, 7:08 pm

absolutezero wrote: Where do you get your ideas about general trends?

I subscribe to a lot of magazines and Motley Fool USA's Stock Adviser service (mostly for the message boards and their news service). I try to ensure that I see a huge amount of information on a regular basis from a wide variety of sources.

I probably spend close to £2,500 a year on subscriptions and books.

Magazine subscriptions: The Economist, The Atlantic, Wired (American edition), The Spectator, Investors Chronicle, The Oldie, History Today, Private Eye (soon to lapse, it's not what it used to be), The Cricketer.

Regularly read blog: Instapundit. Run by a University of Tennessee Law Professor whose politics is on the libertarian wing of the Republican party. Instapundit is a great source for American news, especially as to how the legal system, big business and academia is being corrupted by the Democrats.

Guido Fawkes for UK politics

Podcast: EconTalk. Run by Russ Roberts, an economics professor who is a mixture of the Chicago and Austrian schools. He interviews a wide variety of people and discusses a very wide variety of topics. I've learned more useful economics from EconTalk than in my economics degree! I buy some of the books that are discussed with some of the people he has on the podcast (average is a bit less than one book a month). The podcasts with Mike Munger (another economist) are always worth a listen.

I use Twitter as a news source (I have never posted there). I follow several journalists and academics accounts (Phillips P. O'Brien and Ilia Pomonarenko are my "go to" accounts regarding the Ukraine war)

Every time I go into WH Smith (about once a month, currently) I buy a magazine that looks as if it covers something that's a bit different

I read quite a bit of The Guardian online (I see this as opposition research). I subscribe to The Daily Telegraph and Sunday Times


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