Corona is hitting hard and that’s likely to continue for months. This is also affecting Fortum which is in interesting position with Uniper considering the fact that they are also soon changing CEO soon. That’s a shame as I’m quite a fan of the current CEO Pekka Lundmark. It remains to be seen who will take his position but I’m sure the board will find a proper replacement. Change might even be a good thing with all the turmoil in Uniper during this acquisition. Now that Uniper is also moving on with hydrogen, it has become even more interesting. Being a fan of falling knives I decided to buy 60 shares for 16.65 EUR per share. Smallish starter position but perhaps I manage to buy more in coming months. Current market is finally presenting some decent valuations. I’m especially looking into Aflac, Sampo, 3M and Abbvie. Lodging sector is also one to watch as it has been hit really hard but I suspect that it will not correct itself quite as quickly.
CapMan was trading lower today so decided so sell my tiny position on Hexagon Composites and bought CapMan as replacement. Hexagon position was really small starter position which I hadn’t managed to build up. It was really unlikely that I would be able to build that position in coming months so this move made sense to me given the valuation CapMan had. I bought additional 100 shares for 2.40 EUR per share. Hexagon Composites was very much secondary position and overall I think that I might end up exiting the whole sector during this year or next as I expect eventual buy out for NEL.
Corona is spreading all around the world and stocks took a nose dive as a result. I was building a position on CapMan but stock price went up before I was able to complete the position. Now with corona induced drop I decided to continue and bought additional 230 shares for 2,51 EUR per share. This is a balancing act as we could be headed towards a major drop instead of mild correction seen so far. Therefore I’d like to keep decent amount of ammunition available but don’t want to sit out completely.
Monthly purchase and this time around it was once again EPR properties. I bought additional 20 shares for 72,30 USD per share. Nothing much to say about this as I’ve been building this position for a while now. This position could now be considered full or one purchase shy from it as my REIT exposure tends to be on the high side already. This purchase was also partially dividend re-investment action as I try to make at least one purchase per month on both porfolios.
Short term watch list going forward could include various kinds of stocks such as CapMan, AbbVie, Barrick Gold, Freeport-McMoRan and Brookfield Renewable Partners. CapMan is a bit tricky one as dividend ex-div is getting close and they reported excellent results today so valuation tends to be on the high side for short term. On the other hand it’s a full position in the making so I just might have to keep building it in steady manner. I’m also looking for additional euro stocks to host in Nordea which doesn’t provide currency accounts (and dividend income in other currencies would include conversion costs there).
Minor maintenance with a swap of Loudspring for CapMan Plc. Sold the tiny position that consisted of 550 Loudspring shares for 0,338 EUR per share and bought additional 110 CapMan shares for 2,315 EUR per share. This was mainly done because I have some indirect exposure for Loudspring even without this and it’s very likely that I have plenty of time to jump back in should there be significant change on the outlook. Essentially this is is streamlining effort which helps on the process of building a real position on CapMan.
Another eventful year has passed. Global economy had some major setbacks such as the trade war, approaching US presidential elections with the internal issues that comes with it, the ever ongoing BREXIT saga and loads of smaller issues which I’m sure the middle east region will provide us for many years to come. Then there’s the situation with central banks and interest rates. Considering all this it’s really mind blowing to think how well stocks have performed. Portfolio value is really a secondary metric for me but primary portfolio value increased about 28% this year. This is somewhat in-line with index performance but this being an income oriented portfolio, unrealised capital gains are secondary but nice to have of course.
During FY2019 I re-arranged my personal finances and paid of my mortgage. For me this constitutes as the first step of three in the path to financial independence as it reduces significantly the required income for mandatory monthly expenses. In retrospect I probably should’n have sold some of the stocks for this (looking at Apple Inc. especially which has rallied since then) but these investments are done for a purpose and those realised profits filled their purpose in bigger picture. No hard feelings there especially since I very well realised that this could be exactly the outcome even for the Apple share.
Dividend income for FY2019 increased quite nicely compared to previous year. This happened even though I was not buying as aggressively as in year before due to decreased leverage on the portfolio. There were some one time extra dividends (BHP Billiton) and some negative news for next year as some of key positions will decrease the dividends next year (Nordea, Sampo). For FY2020 I expect consistent cash injections and full dividend re-investments which should offset those negatives and keep dividend growth trend in same trajectory. For FY2019 the total dividend income before taxes and converted to euros was 6769 EUR.
In the spirit of traditional new year’s resolutions I’ve set following goals for 2020:
- Personal savings rate of 70%
- Second step on the path to financial independence: passive income covers base consumption
- 12 months without alcoholic beverages
- Protecting effective tax rate (offset increased taxes with tax planning)
First real purchase in the process of building a position on CapMan with a purchase of 320 shares bought for 2,27 EUR per share. More will follow during next few months unless something else comes up. CapMan serves a proxy for quite interesting sectors when we as societies are in the beginning of a major shift. As they but it:
At CapMan, we build better organised, managed, and financially stable companies, because this contributes to overall economic well-being. More jobs and innovations equal better conditions for the society. Similarly, we invest in real estate and infrastructure, because we believe that functional high-quality environments and utilities are cornerstones for functioning societies.
Most of all it is a dividend oriented company and therefore fits into my strategy as a potential combination of high initial yield and decent dividend growth. On top of that I suspect that there might be some real M&A possibilities in coming years which could lead to significant price appreciation. Recent insider activity is also a plus at this point.
Dividend re-investment for the portfolio hosted in Nordnet with the purchase of 15 EPR Properties shares. Purchase price was 69,99 USD per share. Not much to say about this one. Still reasonably priced and company profile in general is acceptable considering the phase of the market. There are decent valuations available but it’s very difficult to find anything really interesting to buy at the moment in the dividend scope. Personally I doubt we would be getting a major correction next year but it is possible of course. Political tensions have been pushed back a bit but no doubt will come back at some point especially with the approaching US elections and possible deal with China.
Tiny maintenance purchase for portfolio hosted in Nordea. CapMan is a position which I intend to build in the coming months or during Q1/2020 but for the “mandatory” at least one transaction per quarter I bought mere 20 shares for 2,045 EUR per share . CapMan will be included in primary portfolio even though hosted in Nordea. I plan to buy some of the primary portfolio holding for the portfolio hosted in Nordea as it will spread the broker risk. Most likely these will be mainly European stocks listed in euros as my primary broker (Nordnet) has accounts for various currencies which allows me to decide when to convert dividends received in various currencies. For now the portfolio hosted in Nordnet will in one kind of maintenance mode (new purchases being mainly dividend re-investments).
It’s been a while since my last real purchase in main portfolio but today there was three. Hopefully this wasn’t motivated by the negative news from Nordea Bank and Sampo. Both of which are slashing next dividend. First purchase was additional 15 shares of EPR properties bought for 79,46 USD per share. Nothing special here. Decent valuation and acceptable company profile given the interest rate environment and phase of the cycle. GEO Group and CoreCivic are much more interesting. Both are in the much hated for profit prison business which has taken a real beating as the US presidential election approaches. Personally I consider it extremely unlikely that a) US would elect really left leaning president such as Elizabeth Warren and b) would really move away from private prisons any time soon. Having said that, you never know what the general public does and therefore these come with high risk which is at least partly priced in. Very high yield above 10% is also reflecting it as a result. Therefore I bought 80 shares of CoreCivic for 16,17 USD per share and 80 shares of GEO Group for 16,09 USD per share.