August 2, 2019
Target Position Size
Current Position Performance
1st Buy 8/5/2016 @ $11.10
Current Per-Share Cost: (-$48.71)*
1st Buy 2/14/2012 @ $79.58
Current Per-Share Cost: (-$1,059.57)*
1st Buy 9/6/2016 @ $63.10
Current Per-Share Cost: $29.45
1st Buy 4/18/2013 @ $56.38
Current Per-Share Cost: (-$27.78)*
1st Buy 2/14/2012 @ $26.71
Current Per-Share Cost: (-$21.94)*
1st Buy 2/14/2012 @ $41.70
Current Per-Share Cost: (-$23.30)*
IDEXX Labs (IDXX)
1st Buy 7/26/2017 @ $167.29
Current Per-Share Cost: $99.50
Canopy Growth (CGC)
1st Buy 5/24/2018 @ $29.53
Current Per-Share Cost: $17.50
1st Buy 11/6/2018 @ $120.87
Current Per-Share Cost: $111.51
1st Buy 11/11/2016 @ $24.20
Current Per-Share Cost: $33.01
1st Buy 6/11/2018 @ $134.05
Current Per-Share Cost: $120.10
GW Pharma (GWPH)
1st Buy 7/25/2018 @ $142.28
Current Per-Share Cost: $129.73
Take Two Inter (TTWO)
1st Buy 7/30/2018 @ $120.99
Current Per-Share Cost: $104.05
1st Buy 2/6/2018 @ $1,378.96
Current Per-Share Cost: $1,615.85
JP Morgan (JPM)
1st Buy 10/26/2017 @ $102.30
Current Per-Share Cost: $100.77
1st Buy 10/26/2017 @ $74.06
Current Per-Share Cost: $61.02
1st Buy 5/13/2019 @ $111.57
Current Per-Share Cost: $107.15
1st Buy 6/3/2019 @ $50.45
Current Per-Share Cost: $49.08
1st Buy 5/1/2019 @ $188.97
Current Per-Share Cost: $172.38
1st Buy 8/2/2019 @ $201.96
Current Per-Share Cost: $201.96
1st Buy 1/28/2019 @ $40.50
Current Per-Share Cost: $39.97
1st Buy 5/13/2019 @ $53.18
Current Per-Share Cost: $49.46
* Indicates a position where the capital investment was sold.
Negative buy price indicates removal of investment plus additional profits.
Highlights from the Week
Biggest Winner: Take Two Interactive (TTWO)
You know it’s a bad week when my Biggest Winner is just the one that lost the least. This week’s “winner” is Take Two Interactive (TTWO) which saw stabilization going into earnings as competitors like Electronic Arts (EA) reported that the video game industry is not dead.
Although TTWO doesn’t report until next week, it held fast with a negligible -0.07% loss this week in the face of the Trump Tweet Sell-Off.
Biggest Loser: Square (SQ)
High-flying growth stocks will positively skyrocket when they report good earnings. However, in Square’s (SQ) case while the earnings were good, the forward guidance was not with the company warning that they will be investing heavily for the rest of 2019 in order to compete. The stock sold off -14.92% after reporting earnings. Yowtch.
This Week’s Moves
3M (MMM): Closed Position
As expected, 3M (MMM) pulled back enough on Monday to trigger my stop-loss order, closing the position at $173.98.
3M has been a troubled company, not just a trouble stock, since I first opened the position less than 3 months ago on May 1, however, when the company released news last Friday of an internal probe into possible financial regulation violations, it was time to protect capital and make a plan to unwind the position.
This company is one to watch in case management fixes its many issues from the internal probe to potential groundwater pollution near one of its factories. That’s too much headline risk for me for the moment, though.
The rest of the market disagreed with me, however, as 3M bounced around quite a bit during the week’s trading, reaching $178.02 at one point – a missed gain of more than 2.25% from where I sold on Monday. That being said, no one ever got hurt taking a profit, and when my investing thesis falls apart, my rules say it’s time to get out of the position.
Of course, on Thursday, 3M’s exposure to China caused it to take it on the chin, and the stock sold off with the rest of the market.
Closing the position actually left me with a small +0.65% gain. If I had left the money in my money market fund (where I keep uninvested cash), I would have only earned +0.55%, so it wasn’t a complete waste to hold 3M for a while.
3M closed the week at $170.55, down -1.97% from where I sold on Monday.
Berkshire-Hathaway (BRK.B): *New Position*
On Friday, I opened a new position in Berkshire-Hathaway’s Class B Shares when the stock pulled back to the $200 level, filling an order at $201.96.
Berkshire-Hathaway (BRK.A & BRK.B) is legendary investor Warren “The Oracle of Omaha” Buffet’s company.
For the uninitiated, Warren Buffet is considered the best investor of all time by many industry experts, leading his company, BRK, to astounding profitability by acquiring a variety of different subsidiaries including real estate, insurance, railroads, and also holding positions in a variety of other companies.
Known as a “value investor,” Buffet’s main technique is to find companies whose share price is less than the underlying value of the company by a significant margin, and it works.
While I’ve always respected Buffet, I’ve been listening to an audiobook (using Amazon’s Audible – get two free audiobooks if you sign up with my link) called “The University of Berkshire-Hathaway” where the author recounts three decades of Berkshire’s annual meetings – referred to as “Woodstock for Investors” – using notes from his own attendance and shares the wealth of knowledge he learned there.
The book’s made me respect Buffet even more and inspired me to take another look at the stock.
Berkshire-Hathaway has two classes of shares – Class A and Class B – with Class A having more voting rights than Class B and therefore costing more… a lot more. As of my purchase, Class A shares (BRK.A) cost $300,900.00 per share.
Yes, you read that right – more $300k a share.
Buffet’s reasoning behind never splitting the Class A shares was to create a dedicated investor class – those who invest in his company have a very high interest in its suceess as its high price attracts investors, not traders.
In 1996, Berkshire released the Class B shares, opening at $23.20 a share. When I started using the techniques that have led to my success back in 2009, I looked at BRK.B when they were trading around $70 and figured there wasn’t much left potential in a company already worth so much.
Wow, was I wrong.
In 2019, BRK.B shares hit an all-time high of $224.07 – more than 300% higher than when I was first eyeing the stock
I’ve been wanting to buy some BRK.B for years now, but the stock just keeps going higher and higher. Sometimes, with high-quality companies, I’ve learned that you just need to pull the trigger on a pullback, open a small position, and then hope for lower prices to add more.
That was my logic during Friday’s selloff as BRK.B has pulled back more than 10% from its all-time highs. I opened a very small position – about 15% of my desired target allocation – to get started in case this week’s selloff is just the beginning of a much bigger drop.
I have buy targets much lower at the 50-Month Exponential Moving Average of $179 and then even at the mid-$150s, mid-$130s, low-$120s, low-$100s and even sub-$100.
The timing for the purchase also coincides with Berkshire’s earnings report on Monday, August 4. If the company reports good earnings, this might be the only allocation I have in this company. If the company disappoints, I’ll have the opportunity to add more at lower levels.
BRK.B closed the week at $202.67, up +0.35% from where I bought.
Dow (DOW): Added to Position
As if its weak earnings report wasn’t bad enough, Dow (DOW) got slammed after Trump’s tweet about increase China’s tariffs, thanks in large part to Dow’s exposure to China combined with the resulting market-wide selloff.
The selloff triggered a buy order I had in place to add to the position at $47.45, replacing shares I sold at $50.58 in mid-July, 6.19% away from here.
While the purchase did lower my per-share cost to $49.46 from $49.92, unfortunately, the trailing stop I used for the order was too tight, and DOW ended up falling much further than where I was filled.
After the price action settles, I will be creating a new buying target to add even more as I don’t yet have a full allocation and Dow’s dividend is now 5.661%.
DOW closed the week at $45.60, down -3.90% from where I bought on Thursday.
Want Further Clarification?
As always, if you have questions about any of my positions or have positions of your own that you’re curious about – feel free to leave a comment below!
See you next week!
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