Hi all,
Welcome to my first blog post. I thought I would take some time to try and illustrate my current market strategies by sharing the currently open trades I have on the market.
Currently, I am investing a small portion of my personal savings from the last few years; primarily as an experiment to see whether I can outperform the market.
Open Trades:
The Walt Disney Company:
The position was opened at a value of $108.74 a share and currently trades at $115.25. With a little leverage, this means that the position has currently risen in value by 12%.The reasons for my investment in Disney are simple; a remarkably strong line-up of films is due to roll off the production line and into theatres over the next year or two. We have Toy Story 4, the next Avengers film, Frozen 2 etc. Each of these films will gross at least a billion dollars, and as a result of this we can be certain of strong earnings from Disney into the future.
Have a look at the "unstoppable" line-up of films which will roll into theatres below:
https://qz.com/1496611/disneys-biggest-year-in-movies-yet-could-be-2019/
Aviva:
The position was opened at a value of 423.60 and now trades at 427.40 - this position was only opened very recently but already looks strong going forwards.
I am sure many of the readers of this blog will consider the insurance market to be extremely boring and act as nothing more than a dividend stock. Well, that is part of the reason why it is in my portfolio. With a dividend yield hovering around 7%, this is extremely attractive in a highly volatile market.
However, the main reason for my investment is that the stock has been slightly hounded over the last year, and has significant room to recover. The earnings in the past have been relatively good, and there is an increasing case for bullishness in the insurance industry as a whole.
The Coca-Cola Company: The position was opened after the vast fall Coca-Cola took following the earnings season. It was purchased at 45.71 and the current price is 45.25. With my relatively high leverage (compared to the rest of my positions) this represents a 4% loss in value.
However, moving into a volatile market the security and stability of the brand identity of Coca-Cola is important, and again represents a point of stability to counter-act volatility in other areas.
Similarly, the earnings report stressed the importance of Diet drinks to their revenue stream, and it is this growth which has prompted me to be quite bullish about the future growth of these healthier markets.
Morgan Stanley:
The position was purchased at 41.735 a share and currently trades at exactly the same price.
This position was opened because it is my belief that Morgan Stanley will outpace the growth of rival banks in the year ahead. This has been evidenced by rapid growth in specific divisions in the past few quarters at Morgan Stanley. Similarly, with the Chief Executive eyeing up some purchases, there could be some significant improvements to the efficiency of the business.
To finish, I will also highlight my slightly smaller positions.
In order to have some exposure to commodities, I have an investment in both Glencore and in Royal Dutch Shell. It seems that mining stocks are on the rise lately and it is my belief that this trend will continue - particularly given the possibility that fears over slowdowns in global growth may be exaggerated. Furthermore, with an increase in the likelihood of a trade truce between the USA and China, there is likely to be further room for growth; particularly in the oil market.
The remarkably impressive annual report of Shell also illustrates the company is extremely well positioned to take advantage of oil prices at their current level.
Finally, I have another position in Barclays as they are likely to succeed in the event of a deal in the Brexit negotiations. Similarly, they have suffered a beating over the last year in share price despite not seeing major declines in profitability or in risk, and the investment banking arm has also been growing too.
Hedging:
In order to mitigate risk, I have also taken out some hedges against these bets. Firstly, I am short on the FTSE 100 due to the possibility that there may be a no deal Brexit. Secondly, exposure to some of the more volatile stocks on the exchanges has been balanced by a range of long term equities with historic price stability - even in times of downturns.
Anyhow, I would like to thank everyone for reading, and I look forward to proposing more thoughts on the market in the days and weeks to come.
LY
