Portfolio Allocation

Due to the nature of this blog and website I thought it best to share my portfolio (excluding real estate) with my readers. By doing this I will be sharing with you both my success and losses, my ups and downs.

Currently, most of my assets are in the technology sector and one in the financial services industry. If you scroll down to my watchlist you will notice that I don’t venture far outside of these industries as these are within my circle of competence.

For those who are wondering about the diversification of my assets, I follow Warren Buffett and Charlie Munger’s philosophy “Diversification is good, but not too much”. The more diversified, the less time I can spend on studying and investigating a company. Therefore, my strategy to reduce risk is to know the company really well, and buy it with a margin of safety, when it is cheap.

 
 
 

*Real Estate Assets Excluded **Units ($100)

My Investments

 

Apple

 

+ Transitioning from flagship Iphone to wearables and services business to drive top-line growth.
+ Partnership with Samsung and Amazon in their services segment.
+ Increased focus in the gaming industry.
+ Expansion of Apple Pay and Apple Music.
+ Long run growth opportunities in augmented reality and virtual reality.

- Currently still very dependent on Iphone sales.
- Competition in China, which is an important market for Apple
- Strong Competition in the tablet sphere.
- Increased regulatory issues in Europe.

 

Google

 

+ High return on invested capital.
+ Strong and stable revenues of cash flow.
+ Very little liquidity or debt risk.

- Strong competition from Amazon.
- Mysterious about data collection.

 

Microsoft

 

+ New CEO S. Nadella has shifted focus toward high-value commercial and cloud application business.
+ Solid second position in cloud infrastructure (after Amazon Web Services).
+ Stack of integrated software.
+ Azure cloud + Intelligent Edge Computing + IoT.

- Closure of Chinese factories due to Covid-19.
- JEDI contract with the pentagon is halted.
- $7.5 B write-off for Nokia devices and services.
- At the mercy of Apple and Google in the mobile smartphone sector.

Nvidia

 

+ Gaining market share as a gaming service provider.
+ eSports and gaming are gaining traction.
+ Growth opportunities in data centers with more and more companies going to the cloud.
+ It’s GPUs are being used in more AI models and applications (automotive, healthcare, and manufacturing).
+ Cash rich company.

- In the near term their data center endeavors are risky.
- Decrease in the demand from crypto currency miners.
- Strong competition from AMD, which is now in the PS4, Wii U, and Xbox One.

 

Mastercard

 

+ Increased investments in data analytics, cyber, and intelligence through both organic growth and acquisitions.
+ Consistent revenue growth, spurred by: renewed subscriptions, new deals, and expansion of offerings.
+ Strong international exposure that is growing.
+ Continuous investment in technology, which helps them maintain their leadership position.
+ Strong cash flows and a growing return on equity.

- High expenses and increased operating costs related to higher revenues.
- Rebates and incentives are chipping away from profits.
- Above industry average leverage.

My Watchlist

 
  • Visa - V

  • American Express - AXP

  • Discover Financial Services - DFS

  • Intel - INTC

  • Advanced Micro Devices - AMD

  • Micron Technology - MU