Links 39.2024
On a Personal Note
Since this week’s newsletter is a special edition with a Portfolio Update, I should do a quick disclaimer: Don’t unsubscribe—haha! I’ll be back with the usual topics next week. :)
Otherwise, all is well on my end. I just wrapped up another speed run through the 'liberal' world with seminars, workshops, and other commitments (stay tuned for more videos!) in Belgrade, Istanbul, Sofia, Berlin, and Gummersbach. And while I probably should get some rest, I’ve just put together a monumental portfolio update. Enjoy!
Portfolio YTD 2024
Okay, it’s time for another portfolio update. While I cover general performance and macro sentiment in my Annual Reviews, I usually don't have the space to break down my current holdings or share my thoughts on portfolio construction. And since the last detailed update was about two years ago, I thought I might just do that—and provide you with an overview of my current portfolio and strategy. I also highlighted all major changes since the last update.
Disclaimer: This is NOT financial advice! Don’t follow the investment tips of a random dude on the internet.
Portfolio Performance 2024 YTD: 43,09%
Relevant Benchmarks
S&P: 20.77%
Nasdaq: 33.15%
MSCI World: 19.39%
So, here is a little chart to visualize this:
And for context, the 5-year performance of my portfolio against selected benchmarks:
Unsurprisingly, I’m massively benefiting from the Bitcoin outperformance—which basically confirms my 2024 prediction that we will be hitting another all-time high (and potentially 100k). Yet (and this important to note), I’m managing more than 100 investments. So, I am not looking for just the best trade but for a more diversified approach that reflects my needs and balances my not-always-unproblematic risk appetite.
Now, let’s look at the individual stock performance in more detail:
Best Performers 2024 YTD
Nvidia ($NVDA)
Palantir ($PLTR)
SEA Ltd ($SE)
TSMC ($TSM)
Tencent ($TCEHY)
Again, this just follows from my investment hypothesis that big tech and AI stocks will continue to outperform and that we will see a resurgence of Chinese stocks. All of these were macro predictions I made at the beginning of 2024—as keen readers of this newsletter will know.
Now a quick reminder of my general portfolio composition:
Portfolio Overview
Portfolio Base: passive, tracking a world portfolio w/ my own flavor
Subbases: long-term "buy & hold" based on individual needs and/or insights
Sector Gambles: expected mid-term sector outperformance
Individual Stock Picks: expected short/mid-term company and/or sector outperformance
Portfolio Base
As I mentioned in my last update, I aim to build a portfolio based on basic factor investing. And while there are some rather sophisticated financial products out there that could do this more elegantly, I’m sticking with my own, somewhat clumsy approach. But well, so far, it’s worked well enough :)
My largest position is an MSCI World Momentum ETF, which has outperformed both the traditional world index and other factors. However, my other factors haven’t done as well. Small and Mid Caps still aren’t catching up as I expected, and my heavier exposure to Europe has certainly hurt my performance. Yet, as we are now seeing some minor resurgence of small caps, I am still counting on the long-term outperformance of this factor. No changes expected.
iShares Edge MSCI World Momentum Factor ETF ($IS3R)
iShares MSCI World Small Cap ETF ($WSML)
iShares Edge MSCI Europe Value Factor ETF ($IEVL)
iShares STOXX Europe Mid 200 ETF ($MCXPEX)
Subbase 1: Crypto & Crypto-related Stocks
Not much has changed here. As a hardcore Bitcoiner, this asset class makes up for the largest junk of my portfolio. But I don’t actively invest in these assets anymore. In fact, most of my portfolio is just there to counterbalance my overexposure to Bitcoin.
This year, I closed out a position of Marathon Digital Holdings ($MARA) in the run-up to the Bitcoin all-time high. Bitcoin mining is a tricky business and I felt that my portfolio didn’t need another leveraged crypto play. I‘m also looking at closing my $SOL position during the usual alt surge towards the end of the bull run. The proceedings of this trade will, however, remain in this asset class and will be turned into hard money, i.e. Bitcoin.
Bitcoin ($BTC)
Coinbase ($COIN)
Ethereum ($ETH)
Solana ($SOL)
Subbase 2: Passive Income High-Dividend ETFs/REITs
This might be the weirdest part of my portfolio as I’m actively giving up on some performance here. But outperformance ain’t the name of the game. This section merely exists to generate a convenient passive income stream for me. And in order to keep this low-effort, I’m just combining some ETF products to ensure a stable (and somewhat diversified) monthly cash flow. Obviously, these products are far from ideal and still carry a lot of value traps (i.e. sh*t companies); but I couldn’t yet find a better way to build this myself without letting my portfolio balloon even more. I continue to screen the market for better products and already replaced some of the ETFs with the FTSE All-World High Dividend flagship. Moreover, I added the WisdomTree Global Quality Dividend Growth ETF this year—which is an excellent product that exactly serves my needs. Recommendations are welcome!
FTSE All-World High Dividend Yield ($FALY)
SPDR S&P Global Dividend Aristocrats UCITS ETF ($GLDV)
iShares STOXX Global Select Dividend 100 ETF ($SDGPEX)
iShares MSCI World Quality Dividend ETF ($WQDV)
iShares Developed Markets Property Yield ETF ($IDWP)
iShares EM Dividend ETF ($SEDY)
iShares Dow Jones Asia Pacific Select Dividend 50 ETF ($EXXW)
WisdomTree Global Quality Dividend Growth ($WTEQ)
Subbase 3: Great Companies Whose Products I Use & Love
This might be the most dynamic (and most fun) part of my portfolio: This is were I invest in my own love brands. This year for example, I added Ferrari & Porsche for some aspiration, Daikin due my newly gained appreciation for air-conditioning, Campari-Milano for the Aperol summer vibes…
Airbnb ($ABNB)
Booking Holdings ($BKNG)
Daikin Industries ($DKILF)
Davide Campari-Milano ($CPR)
Ferrari ($RACE)
McDonald's ($MCD)
Kering ($KER)
LVMH ($MC.PA)
Porsche ($P911)
Starbucks ($SBUX)
Walt Disney ($DIS)
Subbase 4: High-Growth Tech Stocks
This remains the most chaotic and unstructured part of my portfolio, with a lot of individual stocks. I haven’t yet found the right basket solution. Ideally, I’d like to track attractive cloud, e-commerce, SaaS, and cybersecurity companies without adding more big tech or getting overexposed to trash stocks. So, I’m stuck with individual stock-picking for now. Over the past few years, I’ve had to become something of an expert in software KPIs, like the Magic Number. Not exactly a hobby I needed, but here we are.
In retrospect, I think I’ve done fairly well. At this point, the setup seems strong heading into another period of low interest rates, where these stocks tend to thrive. My broker just listed Sentinel One ($S), so I’m about to complete my cybersecurity cluster.
Block ($SQ)
Cloudflare ($NET)
CrowdStrike ($CROWD)
Datadog ($DDOG)
DigitalOcean ($DOCN)
HubSpot ($HUBS)
Mercadolibre ($MELI)
Okta ($OKTA)
Palo Alto Networks ($PANW)
SEA Ltd ($SE)
Snowflake ($SNOW)
Teladoc Health ($TDOC)
Twilio ($TWLO)
ZipRecruiter ($ZIP)
Zscaler ($ZS)
Sector 1: Big Tech
These are some of my oldest holdings. And as I predicted that Big Tech will continue to outperform the overall market due to the AI boom, it just made make sense to continue this overexposure. Note that I neither hold Meta nor Tesla or Netflix. These are strategic choices.
Apple ($AAPL)
Amazon ($AMZN)
Google/Alphabet ($GOOGL)
Microsoft ($MSFT)
Nvidia ($NVDA)
Sector 2: Commodities & Agriculture
This is where I made the most changes since the last update. The VanEck Global Mining ETF allowed me to consolidate most of my individual positions. I also added the VanEck Uranium and Nuclear ETF for obvious reasons :)
Albemarle Co. ($ALB)
Deere & Co ($DE)
iShares Agribusiness ETF ($ISAG)
iShares Diversified Commodity Swap ($ICOM.L)
Sociedad Química y Minera ($SQM)
Südzucker ($SZU)
VanEck Global Mining ($WMIN)
Van Eck Uranium and Nuclear Technology ($NUCL)
Sector 3: Clean Energy/Water
No changes here. The renewable sector continues to struggle, while infrastructure and water, being naturally more defensive, remain the most underperforming part of my portfolio. A Harris win in the U.S. election could potentially revive some of those hopes, but time will tell. For now, I remain long-term bullish on infrastructure and water. These are anyways keepers for the eventual market downturn.
iShares Global Clean Energy ETF ($INRG)
L&G Clean Water ETF ($GLUG)
iShares Global Water ETF ($IH2O)
iShares Global Infrastructure ETF ($INFR)
Sector 4: China & Emerging Markets
Following my 2024 investment hypothesis, I’ve gradually increased my China exposure, both through individual plays and by adding the Invesco China Technology ETF for diversification. So far, it seems this move could pay off, potentially giving me an edge by year-end. Of course, I’m closely monitoring the market, as no one really knows how Xi Jinping’s 'Whatever It Takes' moment will unfold.
I’ve also added positions in Latin America and the Gulf (GCC) for more emerging markets exposure. However, I’m not satisfied with these moves. I may soon exit my positions in Vietnam and Latin America, while keeping the Gulf and India. Indonesia remains on my watchlist.
Alibaba ($BABA)
Baidu ($BIDU)
BYD ($BYDDY)
Tencent ($TCEHY)
Pinduoduo ($PDD)
Invesco MSCI China Technology ($ICNT)
iShares MSCI EM Latin America ($MELA)
iShares MSCI Emerging Markets Small Cap ($EUNI)
iShares MSCI India ETF ($INDA)
Xtrackers FTSE Vietnam Swap ETF ($XFVT)
XTrackers MSCI GCC Swap ($MGCC)
Sector 5: Consumer Staples
No changes here. Those are defensive plays for the eventual market downturn. I continue building those positions as portfolio anchors.
iShares MSCI World Consumer Staples Sector ETF ($WCSS)
iShares STOXX Europe 600 Food & Beverage ETF ($EXH3)
Sector 6: Defense
This has always been one of my standout examples of a successful sector gamble. Due to the lack of investment products available in Europe (e.g., the iShares U.S. Aerospace & Defense ETF), I built my own basket over the years, which has led to significant outperformance. Since 2022, I’ve been gradually adding European defense companies, but as I'm still building these positions, they aren’t yet reflected in my portfolio’s top performers (obviously, I’m buying into high valuations at the moment).
Airbus ($AIR)
Boeing ($BA)
General Dynamics ($GD)
Hensoldt ($HAG)
Kratos Defense ($KTOS)
Leonardo-Finmeccanica ($LDO)
Lockheed Martin ($LMT)
Northrop Grumman ($NOC)
Raytheon Technologies ($RTX)
Rheinmetall ($RHM)
Sector 7: Tobacco
Another anti-ESG sector, another successful gamble—so far. Tobacco is performing surprisingly well in 2024, and if my prediction about smoke-free products (i.e. snus) proves right, this industry may have more longevity than the market currently expects. With the addition of Japan Tobacco, I’ve effectively built a Tobacco ETF. I plan to keep increasing my positions as long as valuations stay as attractive as they are now.
Altria ($MO)
British American Tobacco ($BATS)
Imperial Brands ($IMB)
Philip Morris International ($PM)
Japan Tobacco ($JAPAY)
Sector 8: Industrial Gases
This is the ideal sector to invest in: stable af, with a huge total addressable market (TAM) and an oligopolistic structure. I created my own industrial gases ETF by investing in all the major players, so I don’t have to pick winners and losers—which has already paid off. For example, Linde is outperforming while Air Liquide is struggling. I also added Nippon Sanso before its recent surge. I plan to keep increasing my positions in this sector
Air Liquide ($AI.PA)
Air Products & Chemicals ($APD)
Linde ($LIN)
Nippon Sanso Holdings ($4091.T)
Individual Stock Plays
This is the classic retail investor section of my portfolio. As a financial markets junkie, I way too often spot 'just another investment opportunity’—which has resulted in a strange mix of random stocks. Obviously, this is what you shouldn’t do!
Unsurprisingly, you’ll notice many German companies, reflecting my own home bias. There might be some hope nevertheless as I’m planning to close most of these positions over the next 12 to 24 months. Let’s see how that goes…
Allianz ($ALV)
ASML ($ASML)
BASF ($BAS.DE)
Bayer ($BAYN)
Beiersdorf ($BEI)
Berentzen ($BEZ)
Berkshire Hathaway ($BRK.B)
BioNTech ($BNTX)
Carbios ($ALCRB)
Carl Zeiss Meditec ($AFX)
Danaher ($DHR)
DHL Group ($DPW.DE)
Fresenius ($FRE.DE)
Goodyear Tires ($GT)
iShares Core MSCI Japan IMI ($JPN)
K+S ($SDF.DE)
Mercedes-Benz Group ($MBG)
Redcare Pharmacy ($RC)
SFC Energy ($F3C)
Sixt Vz ($SIX3.DE)
Thermo Fisher ($TMO)
TSMC ($TSM)
Volkswagen ($VOW3.DE)
Final Note: As of today, I have no open shorts.
Peace,
SG