My portfolio increased in value by 6.5%.
Almost the only thing that went down in my account was cash as I bought a few morsels.
Normally I like to consider individual company results but to be honest it seemed more to be good results allowed you to share in the general market euphoria whereas bad results meant you got properly canned.
My only two big positions with a poor performance in April were Markel the US insurer with a large investment and direct business ownership arm and Royal Dutch Shell which remains a hostage to the oil price. I do not really understand Markel’s poor performance compared to the US market as a whole as I think it is a well run business. It had results for 2019 out on the 28th April and I thought they were good. But I do accept that I am not as close to it as it is a US company, though most, (though not all), of the writing I find on it also sees it as undervalued.
There were better than expected results from $GOOG, $APPL and $MSFT all who for different reasons had an OK start to the pandemic with the promise of a lot of additional business to come. They also have large cash piles. The only one with a genuine problem is AAPL as it may lose its China business if an all out trade war gets going. Broadly speaking they all have a digital offering(s) that people want.
There were also interesting results from both $MA. and $V. Both of them are seeing reduced levels of operation at the moment but these should recover to an extent as economies recover and will now presumably have the following wind of who wants to use dirty disease carrying money when they can flash the plastic. Also to be borne in mind is the reality that a lot of countries raised the non pin transaction rate, which plays into credit card usage. (Neither Mastercard or Visa bear the credit risk, so increased usage is to their benefit).
I did not sell anything in the month as I did some selling in March for YE tax purposes.
I did however do some buying.
I added to my holding of PPHE. I had sold more than I really wanted in March for the tax loss and bought about ½ back.
I added to my holding in Vistry as I felt the fall had gone too far. Building sites are relatively easy to socially distance, housebuilding is an area that the government has always liked to help not only to get votes but to pump the economy, mass demand has been unmet for years, management were buying significant amounts (towards the £m), and if lockdown shows people one thing it might be the benefit of a garden of their own in which to have lockdown or going forward working from home.
I also added to Mastercard before the results. I think I called the short term problem v long term opportunity correctly.
I also began to look for some of the deeper value opportunities that had perhaps disappeared in the last few years. Under my Schloss strategy of nibble in, look and assess and then either sell out of nibble more I bought Aviva and Berkeley Energia. I also bought Abbott Laboratories but this was more of a GARP rationale.
I do not like Aviva. I think it has been poorly run for a long time and have no feeling that this might change. I really dislike large financials as management invariably have no real clue as to what is happening two levels down and large financials have more than two levels. So it’s a poorly managed business in an area where there is little good management, just overpaid executives taking the money and kudos until something goes wrong. However I bought into it as it trades on a PE of less than 4 and its market cap was lower than sustainable cash. I have no intention of holding this as a long term share. Should it revert to the mean I will sell and should it continue for too long to underperform I will abandon the position. Though this is on the Schloss provisio that a share can take 4 years to perform.
Berkeley Energia had a market cap of circa £25m and about £70m in cash. It wants to build a Uranium mine in Spain. It is spending about £7m a year to progress this. So if it fails and liquidates in the next few years I should get my money back and then some. However I think that following C19 an opportunity in Spain to get some people back to work would be well regarded by the Spanish government so there is a chance that this will move forward. In which case there should be a rerate in the shares. There has been some movement on this since I bought so the value gap is closing and I only hold this with the intention of getting to a certain price. This is a deep value play for me not GARP.
I also bought some Abbott Laboratories. This is a well run US company that I think can benefit from C19. It is not small and it had not fallen nearly as much as many firms on C19. Of the three this is the most taster position and the only one of the three that can become a long term holding under a GARP scenario. It is providing a C19 testing solution, I believe largely laboratory equipment based, in both the US and Europe, whilst seemingly being in a position to deliver its current business at maintained levels. My position here is small and the intention is to use it both to validate my initial research on the company, (nothing focuses like skin in the game), and to broaden my understanding of the healthcare market.
On a general level I think that the markets will at some stage be lower between now and December. Possibly even until June 2021. But I have no ability to time the market and plan to still be investing come July 2021 when I hope that we have a vaccine and a more normal/sensible approach to dealing with C19. As such I intend to keep investing and hope anyone reading this stays safe.