Dwell+Done

Midsummer proved to be a bit different this time around. UK voted in favour of the brexit which was a bit of a surprise. Personally I expected the result to be around 56% in favour of staying in EU but the people have spoken and now it’s left for the politicians to either implement the decision or find a way to work around it.

These are the type of events that don’t occur very often. They provide plenty of uncertainty and even panic which make them potentially excellent times for net buyers. Personally I started with a purchase of 10 additional shares of Diageo for 105 USD per share. I considered it as a substitute of buying a very large pint of Guinness to celebrate this special occasion.

Pretty much everything (at least on this side of the pond) went down yesterday. My portfolio didn’t move at all as the strengthening dollar compensated pretty much all of it. For the next week I expected the downfall to continue which hopefully opens a window of opportunity to either add to existing positions or even start totally new ones. As the uncertainty is likely to go on for years, there might be plenty of the opportunities to exploit during the next months.

Long awaited addition to existing position with a purchase of additional 10 shares of Diageo (NYSE:DEO) for 110,70 USD per share.

Addition to the new H&M position with a purchase of additional 40 shares for 286,10 SEK per share. This brings the total to 70 shares. It remains to be seen if I’ll make a third purchase anytime soon. Next purchase should be from the US if I can find something with suitable valuation.

Official purchase of the month. Hennes & Mauritz has been in and out of my broader watch list. It has always had plenty going for it. Yet it never really has fit the bill for me. In general I like established global top brands which are able to generate plenty of cash year after year. However some business areas have been problematic for me. Clothing and fashion is one of them. Airlines and carmakers are also in the same list.

Now things changed a little bit as I opened a small position in Hennes & Mauritz with a purchase of 30 shares for 295,30 SEK per share. The real tipping point this time was the insider activity. I’ll consider doubling the position next month. One benefit is that this is the first position that will produce distributions in SEK (my other Swedish positions are actually double listed in Helsinki and therefore the distributions are automatically converted to EUR). I generally prefer to have income in multiple currencies and SEK will be the fourth following EUR, USD and NOK.

Links: H&M Investor Relations, Insider activity: Stefan Persson

Slight change in plans. I was planning to buy back all the Fortum shares I sold recently. I was hoping to do that around 10,80 EUR per share during the next six to nine months or so. Instead I decided to change my allocation a little bit. I still have a bit mixed feelings about Fortum. On the other hand there’s  the political risk which in my opinion is the worst kind of risk for any stock. Then there’s Nordea which has been hit lately because of the so called Panama papers leak. All this led to a new game plan. I decided to buy back 250 shares of Fortum for 11,60 EUR per share and 100 shares of Nordea Bank for 8,29 EUR per share. My original Fortum position was 320 shares and I’ll consider increasing my position to that or even beyond that if the renewables strategy plays out as expected. In general I wouldn’t even consider that if I wouldn’t have strong faith in the current management they have.

Fortum: Result for 2015 video 

Today I sold 320 shares of Fortum for 11,31 EUR per share. There a couple of reasons for this. First of all Fortum won’t be producing any cash flow until Q2/2017. Secondly I anticipate that there will be a possibility to buy back the shares for less money during Q2 or Q3. This also allows me to record some losses for tax purposes and while waiting for the buyback order to go through, this will reduce the interest costs for investment debt I have for the portfolio.

Since Coca-Cola is way too expensive for me at the moment, I was considering Diageo and VEREIT for my next purchase. VEREIT entered my portfolio as a purely speculative risk play after the infamous ARCP disaster hit. Now I decided the remove that status and purchased additional 120 shares for 8,61 USD per share.

This also means that there are no “risk positions” in this publicly tracked portfolio. In my strategy I’ve ruled that one of such positions is allowed with limited weighting. In future I might handle similar positions within a different portfolio but that remains to be seen.