Monthly report 3-2020

Monthly report 3-2020

The impact of Covid-19 on the market began in February and continued with full force in March. Year to date the portfolio is down 8.9% and 5% in March. The lessons I’ve learned and the experience gained this past month is far more valuable in the long run than the value my portfolio has been reduced by in the past month. This monthly report will be less detailed, since there are some ongoing changes in my investment strategy, which I will explain in detail in another post.

Last month I wrote that the market decline should act as a reminder that there is risk involved when investing in the stock market and an opportunity to learn more about yourself as an investor. This month the first lesson is that market timing is extremely difficult, e.g. US stock indices up 20% in three trading days and theoretically the bear market ended, and a bull market began. The second lesson is that the Norwegian Krone is a shit currency in turbulent times which is a plus for Norwegian based investors, but also a minus since the additional purchases becomes less attractive due to the weaker Krone. The third lesson is to not jump on the buy wagon too soon and instead hold on to the cash. The final lesson is dividends are not as safe as they appear to be!

In March I added to my positions in high quality companies, sold weaker ones and made a switch between Wartsila (out) and NetEnt (in).

The investment thesis in Wartsila Corp did not play out, hence I sold the company with a loss and moved on to the next one: NetEnt AB.

NetEnt is an exciting new addition to my portfolio and checks almost all of the boxes in my investment checklist. The only drawback is the debt which the company added after they acquired Red Tiger, but I believe the company will continue to reduce the debt load.

Short about the company: the company operates in the gaming sector by development of gaming and system solutions for casino operators. Today, development is driven through the company’s technical platform and the games come in varying forms, from classic casino games to entertainment games. In addition, additional services are offered in the form of marketing, training and technical support.

I made a total of 13 purchases in March and 4 sells. Sysco Corp was added on 18 March and sold four days later with a 35 % gain due to a weaker Norwegian Krone and a revaluation of the stock. The great return in a short period of time was too tempting to ignore.

Going into April I have a 5 % cash position due to offloading Aker and AkerBP, and going forward I will keep adding to my positions, improve my investment processes and keep reading annual reports.

Investment Journal:

Dividends in March:

Last month I reported the organic dividend growth, but the market turmoil in March gave me a valuable lesson: Dividend safety. Many of my companies postponed or cancelled their dividend due to the increased uncertainty. There is no value today to keep tabs on the organic growth number!

The dividends in March was paid out by Transalta Renewables, Castellum, Mowi and Visa. Total dividends received was NOK 1.197, up from NOK 1.172 last year, but this is non-comparable since last year also included return of withheld tax on dividends of NOK 358. The actual increase is therefore approximately 32%.

Dividend overview

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