Portfolio

Below is a very brief description of the businesses in my portfolio. This is not financial advice, nor is it a solicitation to buy or sell anything.

First, lets talk a little bit about the portfolio as a whole. Since the start of the pandemic, I have been trying to maintain a concentrated portfolio. Before 2020 I would probably hold somewhere between 20 and 25 positions, simply because I liked looking for companies, and then didn’t really read up on them enough to be confident to take real size. This current portfolio is one I am actually quite happy with, it has less than 15 positions, weighed roughly according to conviction.

Cash + Global Index fund: Currently, this is only in cash, and it a historically relatively small cash position. In times where I have had a larger cash position, I have put parts of it into a global low cost index fund. For many years I held too much cash, and the index position is a new thing I have been experimenting with and it has paid off in the miasma of market stimulation. At its largest, I think the index position was close to 20% of the total portfolio, which gave much better return than just cash.

Sohu is a case which started by me riding the coat-tails of a fantastic Swedish twitter profile @89Olle. I recommend reading his write up on the company here and I wholeheartedly recommend following him. Since this, I have done some work of my own, and you can find my write-up here.

Nekkar is a great example of the value of Twitter. This is a case that I looked at because some profiles that I like and respect said that they liked the case, and so do I. The way I see this case is that they have a very profitable base within ship lifts, which is valued at what I deem quite an acceptable level. On top of this Nekkar is investing into two growth projects. One is an automated cage solution for farming of fish, and the other is some project directed towards wind power. This is not yet elaborated on, and both these are very early stage ventures. However, I do see good potential in both of these, and I think Nekkar is one of the better cases in my portfolio. See my Nekkar write up for more on this case.

Teqnion is a relatively small industrial group, led by what I deem an energetic CEO with a long term mindset. They aim to grow through acquisitions and organically, which they have done quite successfully. The organic growth has been quite severely hit by the pandemic, but they have managed to complete some acquisitions. I like the historical profitability and margins, and I think they can manage to build a solid and respectable firm. This position has been my most successful position ever in terms cash return. It has thus had quite a good run looking back a year, but I think they can at least somewhat outperform the market.

Berkshire Hathaway probably doesn’t need an introduction. My expectations are market returns but with lower risk associated. Berkshire might be one of the best companies ever built, obviously biased as a huge fan of Buffett and Munger.

Embracer is a very popular Swedish stock, best described as a gaming roll-up. Read my writeup here.

Nordic Waterproofing are active within, you guessed it, water proofing materials. They have had good operational development, showing both organic and acquired growth, and a massive run up during 2020. I consider Nordic Waterproofing to have good margins, good growth, and good return on capital.

Alphabet probably don’t need an introduction. I think this is one of the best stocks in the FAAMG family, a great business, and when I bought Alphabet it even traded at a relatively low multiple.

Facebook is of course the F in FAAMG (or whichever acronym you prefer), and I think it is one of the most dominant busnisses right now. Together with Alphabet they have close to a duopoly position in online advertising, and they are one of the best at using data to make money. I think the extremely high profitability will continue going forward. Read my write up here for some more info.

Clas Ohlson is a retailer offering items such as hardware, tools, home items, electronics, and other odds and ends. They have had a bit of trouble even before the pandemic, for example engaging in failed geographical expansion, and a lacking e-commerce. The poor expansions have since been reversed, and they are currently showing good growth in online sales. I think the market is treating Clas Ohlson too harshly, especially when looking at a free cash flow basis.

I want to reiterate, none of this is financial advice and I’m not your financial adviser. As is clear, I own all of these stocks and is of course biased. I may sell any of these positions at any time, and I don’t intend to be held responsible for your investments. Do your own research.

This posts main reason is to let me put my thoughts down into writing, so I can look back after closing the position, or whenever I am thinking “why the hell did I buy this”. I do highly recommend writing down your own cases, just so that you know what you were thinking as you purchased the position. Doing so combats several dangerous cognitive biases, and helps us as investors to learn from our mistakes and successes. It lets you answer the important question: “Did you get it right because of luck or skill?”.

Here I’ll list some exits, with short motivations, and the returns:

Europris – Sold due to reaching close to my estimated return. Didn’t want to increase size, so decided to sell instead. About +30% over about 8 months.

Treasure – Sold to move to Havyard. I felt that I had higher conviction in Havyard. About -10% over 5 months.

Rovio – Sold due to a very strange acquisition, and a generally disappointing report. About +/- 0 over 6 months.

OEM – Sold due to very high valuation on an EV/EBITDA and P/E basis. About +100%, dividends included over about a year.

Softronic – Felt inadequate return given the risk at the valuation. about +20% plus dividends. Doubled size about 5 months after first purchase and sold 6 months later (total holding time 11 months).

FGNA – Didn’t feel like reading up on the deal terms, sold with a small loss

VIQ – Sold at about -10% to free up cash for other opportunities where my own conviction is higher. 4 months holding period.

Remedy Entertainment – Exited this position due to it being very small and my aversion to add to it. I have held on to it just because I think its a fun position, but at the time of exit I wanted to free up cash in expectation of volatility. One of my best stock pick ever, with more than +150% over about 2 years.

CAG Group – The case that the multiple should expand to levels of other consultants at similar fundamentals. Sold it at about +30% over 6 months.