Hold my corona! It is time for the airing of my personal financial laundry. Let’s see what the corona virus and related market action has done to my portfolio.
Prior Update
In the January update, I ended the month at about $260,000. My portfolio was basically flat. Things were a little different in February.
CURRENT PORTFOLIO
In February stocks around the world were slammed by the spread of the corona virus (and related potential economic impacts?). The S&P 500 was down (8.2%). Foreign developed market stocks (EAFE) were down (9.0%). Emerging market stocks (where the corona virus originated and it seemingly having the greatest immediate economic impacts) were down “only” (5.3%). Bonds provided some diversification with the investment grade index posting a 1.8% gain.
I remain “overweight” foreign stocks. See Media Pin of the Week – More GMO, Weekly Media Pin – Grantham on Graham, Best Foreign Value Factor ETFs, Resource Roundup: More CAPE, and Foreign Value Factor ETFs Update. It did not help me any in February but foreign stocks have lost a bit less than U.S. stocks to date in March.
I also manage some of my portfolio based on a little systematic, trend and value strategy. It is primarily just applying one of the simple moving average signals combined with a valuation trigger/overlay (i.e., I’m not all that enthused about being long expensive stocks with negative momentum/trend). I run about 15% of my portfolio in this account/strategy. As of writing this note, I am out of U.S. stocks in this account. The account has about 2/3 of the balance in cash/t-bills. This is because U.S. stocks are expensive and have negative momentum/trend (based on the measures I use).
The Implosion Begins
As I posted recently, I plan to start tracking my discretionary Roth IRA (dubbed, the “Implosion Fund”) with more detail. I am going to compile the relevant posts here. This account is around 5% of my total portfolio.
Nothing has really changed in the account, other than plummeting quoted values for my holdings. As I said before I sold my BRX position and reinvested most of the proceeds of that sale in ViacomCBS and Wells Fargo.
They have both performed horrendously. I must admit I am pretty underwhelmed by the “new ViacomCBS” strategy so far. From what I can gather it amounts to a “house of brands” mid-tier streaming offering (which I guess they are going to run through CBS all access). They said are just going to continue making shows for the streamers as well as to place on their networks and their linear channels. Showtime is apparently just going to continue to have its own streaming services.
Oh and CEO Bob Bakish also revealed that they are selling book publisher Simon and Shuster. There had been some speculation they would use it to continue to get early options on i.p. that could later be used across the newly scaled enterprise. Mr. Bakish revealed that S&S is “non-core” because it is “not video.” Very impressive vision.
Mr. Market clearly hates what it has heard so far (though the whole sector has been hit by cord cutting and whatever). It is down almost 30% from where I bought it. I’m sort of on-board with their arm’s merchant strategy, but their plan for streaming was really underwhelming. Another annoying thing is that I debated between buying $VIAC and Tegna ($TGNA) at the time of purchase. Of course, Tegna is now up like 40% and is the subject of an ongoing bidding war between Apollo and Gray communications….
Wells Fargo has also tanked on movements in rates and economic fears, etc. I’m totally fine with that stuff. What troubles me, however, are the comments (or lack thereof) from Warren Buffett when he appeared on CNBC earlier this month. When asked about his selling (they’ve been selling the stock over the last two years but really sold quite a bit at the end of 2019) and the new CEO, Charlie Scharf he totally evaded the question (very unusual for WEB to pass up the opportunity to do his Dale Carnegie impression w/r/t a CEO) and turned to Bank of America.
It sounded like he might be selling out. We won’t know until their next filing. I would note they sold a lot but still remain (from what I can tell) the largest shareholder in WFC. So, we will see, but I definitely wouldn’t be happy to see WEB bailing out of a bank I own. [I might agree with him and bail if I see them trying to emulate some of the other big banks models more and get more into classic “investment banking” businesses.
I still have about 15% of this account in cash. That has been a decent dampener during this volatility. I will post when I buy something.
THIS MONTH
I ended the month at ~$240,000. Nothing crazy happened on the income front. I changed up the order of contributions to certain accounts to try and trick myself into saving more. I will post about that if it is successful. Overall, I contributed about $4,000 to my portfolio. It looks like that offset some of the market declines, netting me about a $20K decrease in portfolio value. So I lost like $26K in the market…If that went on for a year or so, I would be near zero! Keep calm and carry on, I suppose. (I really am handling this quite well…I wish more stocks were cheap, even the travel stocks don’t look so attractive, yet).
Goals?
With the new year/decade, I established some goals for 2020. It is too early to report much progress (or lack thereof). I am currently reading three books in parallel. I am getting sort of close to finishing one of them. I will hopefully finish that one in March.
I am on pace with the 60% savings rate goal (or right around it) and I am tracking just below the $50K in annual savings/contributions to investments. My body composition goal is not going well. I’ve been lifting and getting a little more muscle/strength but my diet has been complete shite. Like, I have rediscovered pop tarts and froot loops. Not exactly great for managing insulin response. Maybe it’s because I lost $26K last month? hah!
ONWARD
So there’s the first corona update. The market was down alot and so was my portfolio. I actually have a fair amount in bonds or bills so my stocks or funds were down more than the market. The international and value tilts I have, as well as my discretionary stuff hurt me last month. The Implosion Fund was down almost 20%.
Oh well, it is to be expected:
“If you’re not willing to react with equanimity to a market price decline of 50 percent, two or three times a century, you’re not fit to be a common shareholder, and you deserve the mediocre result you’re going to get…compared to the people who do have the temperament, who can be more philosophical about these market fluctuations.”
Charles T. Munger, 2009 BBC Interview
Thanks for reading!