2019 in Review

Here is a summary of the main action in 2019.

Big Holdings

Let me start with the six biggest positions at year end, BRK (10%), FB (9.5%), WFC (6.4%), CHTR (4.4%), GOOG (3.8%), and FFH (3.8%).

BRK started the year at $200, dropped below $190 at one point, and ended year above $220 (+10%). IV remains near $260-$270, and continues to grow. Its large cash pile provides some counter-cyclicality in case of a downturn. I expect BRK to outperform the indices next year.

FB started the year at $135, roared over $200 (~50%), before settling down near year end. My estimate of IV is $220-$230, but as CapEx declines, cash should start gushing in. This one is a monster!

WFC was the most significant addition in 2019; I added 2/3 to my original position. It started at $46, and closed the year near highs ($54). I figure IV is around $65. The dividend, and proximity to cleaning up legacy legal issues makes it an interesting position to hold.

CHTR was the biggest mover among my large positions. It rose from $285 to $470 (~65% rise) nearly monotonically, as the FCF thesis started playing out.

I added 40% to GOOG near its lows $1000 at the start of the year. It has risen ~30% over the year to $1350, still below my IV $1525. GOOG is an interesting personal example. It is perhaps the only large position where I’ve paid up for quality, and even averaged up.

FFH was essentially flat for the year. I think it is a coiled spring, and at close to book value, it is a compelling stock. I might even add here. Recent underperformance has left a bad aftertaste. Nevertheless insurance operations are improving, it provides exposure to Africa and India. If things go right it could have a 20-25% year in 2020 (IV ~ $575).

Other Extreme Performers

CFX (3.3%) was 75%+ over the year, thanks to a transition to a less cyclical business model. Codan (2.5%) is a small position but went up by another +50%; it has been one of my best picks of all time. Unfortunately, it was a tiny position at inception. JD (3.1%) and BAM (2.7%) both registered 50%+ gains in 2019.

The weakest performers were GME (0.4%) which declined by a half. ALJJ, XOM, and NOV were flat in a year, when the S&P rose 30%.

Other developments

I bought WBA (2.8%) around $50. I started building a tobacco basket (MO, BTI, IMBBY; 2% right now). OAK got taken over at $50. I sold 1/3 of my ALJJ position at $1.65.

In terms of options, I tempered my enthusiasm. Let winners run!

The juiciest stocks from an options standpoint were: GME $1200+, IBM $1200, KKR $1500, SCHW $1600, WDC $1500, WW $1000, IAC $1600.

I started the year at an 18% cash position, which is now close to 25%, as I run out of no-brainer opportunities.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s