I’ve decided to combine the past 2 quarters into a single post, since I’ve been lazy with my writing and because I’ve done a lot of stupid things even though I’ve recovered pretty well.
Like pretty much every investor, the record at 31 March was way down! I finished at -26.22% for the quarter, against the benchmark performance of -22.64%. Seems pretty good right? WRONG.
More than half of my negative return was from chasing Webjet over the cliff, with my first top-up at $10.04 and my last at $5.88. After the cap raise was announced, the dilution scared me big-time and I dumped the lot at $2.95.
However, I did qualify to buy a lot of shares at $1.70 and given that it was trading in the high $2 mark, I loaded up and sold them when the shares hit my account at $2.53. It climbed over $4 and is back down again.
Nothing could have predicted the impact this would have had on Webjet and there is no escape. If Coronavirus had turned out to be nothing, I would have done great. Instead I decided to cap my losses until the global travel industry recovers, which is unlikely to happen for a long time.
The economy has now reorganised itself so that structural demand for certain products and services has now changed permanently. Office space, travel, and toll roads have all been affected. I’ve elected to sell all my Dexus and Transurban, along with Webjet.
What’s still in my portfolio? Only 5 stocks: Reece, Dicker Data, Domino’s Pizza, Kogan and Fortescue Metals.
So let’s look at the results for Q4.
I finished up 35.26% against the benchmark of 16.73%, bouncing back nicely, and giving me a full year performance of 22.4% against the benchmark of -7.2% for the financial year.
So where did the returns come from?
Webjet, Transurban and Dexus were all up from the prior quarter when I sold them. The bulk of the returns came from Kogan, Fortescue and Dominos – Kogan being the standout, almost tripling in 3 months. In retrospect, selling half just before Christmas left a lot of money on the table.
I’ve also got 20% cash and a couple of Vanguard index funds. I’m happy with what I’ve got now – all solid businesses that should manage well through the recession I’m expecting to happen.
I’m on the lookout for new ideas and as the current economic situation plays out, I’m expecting to find value in some new places.