A Portfolio Review Pt. 1
I like to do one of these every once in a while, and it has been almost exactly six months since my last. I last reviewed my portfolio on March 9th and 12th I think, so this should be about right. In this, I will review the size of the position relative to my portfolio, the performance I have felt, and a cursory review of the company itself.
Before I start, I wanted to mention that I watched the movie Porco Rosso, and I loved it. Michael Keaton is good, and I was delighted to find him in his role. This movie is truly amazing, and I would highly recommend it to anyone. Also, tomorrow, my beloved Tottenham Hotspur will face our most vile enemy, Arsenal. I feel confident that we will obliterate them, but if we do not, you will not hear from me for the next month, as I will be in mourning.
Okay, let us start from the top. My number one holding, as it has been since this portfolio began in 2019, is Costco. I L-U-V LOVE Costco. In March, Costco made up 30% of my portfolio, so I sold about 1/3 of my position off in May. Even after doing that, Costco is still my largest position by some margin, making up 21% of my portfolio. I am up about 83% on the position because my average price paid is $500, up $200 after I sold. If I had held onto all the Costco, it would probably make up like 40% of my portfolio.
Costco is an uh-mazing company. I see no realities in all of the universes that exist where I sell out of my Costco. I love the leadership, I love how little competition they have, I love their revenue growth (8% y/y), I love how dedicated their customers are, and I love how creative they are. I mean, come on, they sell gold bars, and they are making a gazillion dollars doing it. The only problem with Costco is that it grows so fast that in about a year’s time, I am sure that I will have to sell more so that a third of my portfolio is not this one company. I see nothing on the horizon that does not make me confident in them. I almost certainly am too emotionally invested in this company, but I do not care. This company is great, this stock is great, and they practically print money.
Now, let us move on to Ferrari. Ferrari makes up 15% of my portfolio. My average price paid is $415, and I bought about the same time I sold that Costco. I have had my eye on Ferrari for about a year. In fact, I wrote an article about them for this website, which you can find here. Ferrari has long piqued my interest, but it took me a long time to make the leap of faith. With a company like Ferrari, everything is about the brand, everything. The second that the brand is cheapened, everything crumbles, and the illusion vanishes. It took me a long time to feel confident about the leadership, and I took the jump. I am up 12% so far this year, which is great for only owning it for four months.
In terms of the quality of the company, I feel optimistic. Benedetto Vigna is an extremely smart person, and from all that I have read about him, and from all that I have heard him say, he gets it. I feel comfortable placing my money with him, even at such a high forward P/E (48), and on all-time highs. If you are considering Ferrari, I would tell you to pull the trigger. It can be worrying at such a high valuation and for such a niche, low-volume stock, but trust me. This company has decades of run to go.
The last position we will talk about today is Pax Romana’s old friend, and my personal nemesis/best friend, Disney. Disney has taught me many lessons. I have owned this company since 2019, and it was the first that I did my own research and analysis, rather than parroting my grandfather’s picks (Costco). Disney shot up earlier this year after I told my grandmother to buy it at $80, which made me feel super smart. Then, Disney began to fall and fall, and fall. I saw it coming because I know this company super well after all these years, and once Disney got below $90, I started snapping up shares again. My price paid has decreased from $100 to $93 since the last of these reports.
I am down about 4% on the stock, which stings, but I still have faith. I am sure that my continual and unwarranted faith in this company and its leadership is violating every rule about investing ever, but I just do not care. There is simply no way that this company with all of its IP, with a profitable streaming system, and the parks/cruises, is worth this little. Forward P/E is a tool worth less than it used to be, but come on, Disney has a forward P/E of 17. ARE YOU KIDDING?
Disney has competition on virtually all fronts, Netflix in streaming, Universal in parks, every other cruise company in cruises, other studios for movies, etc… But their moat is two miles deep and two miles wide.
The only problem with this thesis is that I have been screaming it for as long as I have held this company. I still believe in Disney, but half a decade of belief rewarded me with a 4% loss.
Okay, those are my top three. I have seven positions in total, and I usually have to split this report into two parts because I feel so strongly about all of these companies, that my word count can reach 1000, as it has in this one. With that said, I am looking forward to the next article and our continued review of the best portfolio ever constructed.
