Following the rally last month, I thought we may have been all clear, but this quickly turned out to not be the case. Despite bleeding markets, several of my companies have had good things happen, which I share here. Also, an exciting new addition has made it to my Watch List.
Changes to my portfolio this month
August was again a quiet month in terms of buying…
- On August 15th I further increased my position in Unity (U) at a price of $54.45 per share, lowering my average to $66.83.
- On August 25th Tesla (TSLA) issued a stock split of 3-to-1.
- A small automatic buy order of the Danish Invest Denmark Index ETF went through on the 8th – Which I aim to continue doing every month this year.
|Name (Ticker)||Received (on)||Amount (USD)|
|AbbVie (ABBV)||Aug 16th||$45.87|
|Realty Income (O)||Aug 16th||$13.42|
|Starbucks (SBUX)||Aug 29th||$9.86|
|Comparison + total increase YoY||$111.43 (Aug 2021)||-$42.28|
Commentary & Review
August was a month representative of 2022 overall. It started out with what felt like a healthy correction to the rally we have had – but then it just kept going. Once the Fed came out and set a tone suggesting no optimism at all, stocks dropped off a cliff. While I am ever so slightly outperforming the market, which is a change from earlier in the year, my portfolio is definitely not doing well year to date. Fortunately, I still maintain quite a buffer from the gains I have made just the year prior. I still keep hope that June may have been the market bottom, but with no real changes to the current economic environment, it is not yet safe to say. In my view, everything now depends on the coming inflation report in mid-September. Should it confirm a downwards trend, we may be out of the woods, despite rising interest rates, if not, the bottom is likely still to come.
As I have alluded to before, I am not a fan of the power the current macroeconomic market holds. Even as much good news surrounding my holdings has come out this month, nothing seems able to change the picture. Tesla (TSLA) completed a stock split and received glowing reviews from analyst tours of the new Berlin facility. A release of the Tesla Semi truck is moving closer and closer, with more and more information released and the latest FSD beta software release is seriously impressive. Taiwan Semiconductor (TSM) is reporting that 3nm chip production is starting next month, with Apple (AAPL) and Nvidia (NVDA) lined up to take advantage. Best of all, Unity (U) rejected the Applovin (APP) offer, which hung over the stock like a curse. I made a dedicated post describing the situation and why they are much better off with ironSource (IS). Given that Applovin was willing to pay $58.85 per share for Unity and management did not deem it good enough, it is strange to me that macro-trends can drag it back down into the 40s. I added to my position again, right after the decision to reject the deal was made, but I will of course continue to average down for the rest of the year – as much as I am able.
Finally, the move I described last month, that 3M (MMM) was doing seems to have been overruled in court. At least for now. The stock tumbled 10% on the day, the biggest daily drop in the stock I think I have ever experienced. My consensus remains that I will refrain from buying more stock until the issue is solved, although I do not plan on selling out either – I had hoped it been different after this.
August marks the second month of 2022 when my dividend income comes in lower in comparison to last year. This is again because I no longer hold AT&T (T) which was, for its many faults, a massive contributor in this regard. Even having doubled my position in Realty Income (O) cannot change this story. I look forward to the day I manage to keep up with previous records, with only quality companies – AT&T proved to not be such a company and the reason for why I have let go of it.
Research & Goals
This month a new company has made it to near the top of my Dividend Portfolio Watch List. I have to thank Søren Nielsen – Dagens Aktie (Stock of the Day) for making me aware of this particular company. With this Twitter thread, he began several days of research for me looking into the company Elkem (ELK.OL) for which he awoke my appetite. Elkem is a Norwegian/Chinese collaboration offering advanced materials, like silicons and carbon products, created through impressively sustainable methods. The company plays to several interesting trends and is trading at an extremely attractive valuation. The industry is considered extremely cyclical and because of the profits they have been able to turn in current environments, their dividend is also quite high. Despite the dividend payout changing dramatically year-to-year due to the cyclical nature of the company, they are committed to keeping it around in whatever shape possible. For this reason, I believe it is a better fit for my Dividend Portfolio than for Growth, even though in reality it seems like the type of stock that could muster both. These are rare, but the perfect fit for the kind of investor I am.
I consider Microsoft (MSFT), Taiwan Semiconductor, and Starbucks (SBUX) to also be in this rare category of stock. My research led to many interesting findings, which I do not have the space to expand on here, but it also led me to ‘crowdsource’ a whole bunch of Norwegian investors on Shareville just by asking for help. They shared with me interesting thoughts and many useful resources – for which I am also extremely grateful.
|Name (Ticker)||Conviction (Rank)|
|Embracer (EMBRAC B)||1 ┅|
|Sea (SE)||2 ┅|
|Meta (FB)||3 ┅|
|Shopify (SHOP)||4 ┅|
|Palantir (PLTR)||5 ┅|
|MercadoLibre (MELI)||Contender ┅|
|Name (Ticker)||Conviction (Rank)|
|Bank of Nova Scotia (BNS)||1 ┅|
|Costco (COST)||2 ↑|
|Elkem (ELK.OL)||3 ↑|
|JP Morgan Chase (JPM)||4 ↓|
|Digital Realty (DLR)||5 ↓|
|Lockheed Martin (LMT)||Contender ↓|
As my Watch List for Growth remained static, the only real change to my Dividend Portfolio Watch List has been the introduction of Elkem.
- Short term I wish to continue to increase my position in Unity – potentially Coinbase and Xiaomi as well.
- For the year 2022, I prioritize buying growth over dividend stocks.
- I have no plans to open new positions in my Growth Portfolio.
- I do not plan on selling out of any more positions this year.
- In my 2021 year in review, I stated that I aim for a 35% return in 2022. I continue to strive toward this goal although I have accepted its unlikeliness. Currently, I am down 13.85%.
- Over the long term, my goal is to slowly shift towards more stable positions and dividends on my journey towards financial freedom.
Disclaimer: I am not a financial advisor, the opinions expressed in this article are entirely my own – always invest at your own risk.
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