Mid term portfolio review- view from a different lense

I wrote this for posting on my Strawman account, therefore the references


 Portfolio Review Oct 25

To put this portfolio in context is my largest asset by far, times larger than my principal residence. My return criteria for my portfolio to sustain my ongoing expenditures are in the LSD % range. I point this out because it has clear implications for stocks held. The portfolio is spread across my SMSF, company any and family trust. I do not differentiate where the funds sit; I combine all investments. The investment philosophy, which I have droned on about many times, is simple: find great companies, buy them at reasonable or good prices and try not to make too many changes. Because of the high equity exposure in my net wealth, and being retired, I keep a conscious low level of stock risk and skew conservative IMO. My only other asset of significance is my defined benefit pension, which helps cover cash flow requirements.

 

 Ex 20 oz growth

38%

 AI broadscope large cap tech

22%

 Growth intl other

14%

 Health

10%

 Gold

6%

 Large cap oz

4%

 Spec

3%

 Resources

3%

 Cash for investment

2%

 TOTAL

100%

 

Some explanation around the above. Ex 20 growth is, IMHO, clearly the best risk reward in the Aussie market. They are companies with established, very profitable unit economics and still have considerable TAM to eat into. Stocks held here include LOV, PNI, HUB, REA, CAR, NCK, EOL (promoted from spec), TNE, plus others.

The next category takes us to international markets in what I describe as broad tech/ soft AI exposure. As winners become clear here, I can see changes to be made over time. Stocks included here are TSMC, GOOG, MSFT, AMZN, ASML, NVDA, and META, so keeping to the companies with a broad scope and many levers. Interestingly, when I first looked internationally in 2022, I thought I would find a huge array of opportunities outside the large tech companies. I did, but someone got there first, outstanding companies with a price tag to match! So, I came back to where I am now.

The next segment is still international and includes other industries outside tech/AI. As an aside, I find the international market, especially the US, has a much higher proportion of quality growers, no surprise there, but also has enormous volatility with produces opportunities IMO. Stocks include Visa, Adyen, LVMH, and UNH (new). I also have a growth ETF, WCMQ, which I have been using as a funding source for a while now.

The next is Health, being a mix of international and domestic, but all are global companies. Health has been on the nose for a bit, coming off the volatile C19 period, which most found challenging given the extreme demand changes, and into potential price/tariff issues, etc, from the current regime. I am watching this area closely and have been adding over time. It remains a source of unloved quality stocks imo. Stocks include CSL-Im back again, RMD, NVO, FPH, and SHL.

Gold has grown a fair bit, and although the momentum has been strong, I see this now as a funding source more than anything. As described previously, I have moved on from all companies with operating leverage and only hold royalty companies and bullion, GOLD, FNV and WPM. These will all survive whatever happens to the gold price.

The rest are really bits and pieces, and I do carry a long tail. The top 20 are about 66% of the portfolio. The largest holding outside the above is MQG.

My speculative position includes most of my SM holdings, C79, BVS, XRF and SPZ being the bulk of it.

Therefore, you can tell why my “real life” portfolio differs from my SM portfolio quite a bit, but some similarities. The interesting thing is that over the longer term, the performance has been similar, with SM doing better in strong markets and the RL doing well in normal or weaker markets. why is that the case? Something to ponder over, lol. 

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