Tuesday, July 5, 2016

TLH First Half 2016 Portfolio Results - 6.85%

Well it's hard to believe the first half of 2016 is over.  It seems to have flown by with plenty of excitement. We've made it through a few "No Rate Hikes", and the "Brexit" vote. Not to mention a seemingly endless stream of bad news regarding terrorists, ISIS, and sadly other mass shootings.

Yet the The Long Haul Portfolio marches on. I was pretty amped up to determine how well the portfolio had performed.  Well that energy has turned into some happiness as I am pleased to announce the portfolio has returned 6.85% compared to a 6.72% gain in the SPY index ETF since I started this in October 2015. I use the SPY since it is the most widely held ETF that follows the S&P 500 index, and it's what most investors use to mimic the index performance. You can find the portfolio spreadsheet by clicking on the right hand side link.  It's a Google sheet so you will likely need an account to view it.

A few things I'm left wondering. I wonder how the portfolio would have performed if I had started with only my new adds, instead of the holdings I currently had.  There are a few picks that I haven't added to at all since I started this. Some that come to mind are Facebook and Procter & Gamble. Then there are a few picks I wish I had added more too including Altria, McCormick, and the other tobacco names. Alas time will tell if I am making the right choices. So far it looks like I still am.

The portfolio's lead over SPY has narrowed from Q1 when it was 4.81% vs 4.30%. Either way the lead is still intact. Here are the notable performers, and slackers I've noticed.

As a whole the tobacco picks are performing very well. In fact MO is the 2nd best performer I have. Out of the top 7 stocks 4 are tobacco names being MO, PM, BTI, and RAI. Even new addition UVV is performing well and is up 6%. VGR has been slacking of late, but I'm still seeing a positive return on this one.

McCormick, Church & Dwight, Procter & Gamble, Facebook, and Global Payments round out the other top performers. MKC is tops with a 30% gain so far. With the exception of GPN, and FB the other names are all defensive in nature which just goes to show where investors have been putting their money overall.

Some notable slackers are Wabtec, Samuel Adams, Cognizant, and HCP. I'm disappointed each obviously.  I'm disappointed in WAB the most as it was such a solid performer for years, but is now taking a break. My SAM additions seem to have been ill timed. The company still has a great balance sheet so I'm willing to wait this one out for awhile. Additionally the company continues to buy back shares, although it makes me wonder why they can't find other opportunities for their cash. HCP has been running into legal issues, and then announced a split of it's ManorCare assets. I'm happy to see that. It will allow management to focus on more lucrative opportunities. Although I'll be left deciding to keep the new shares or sell them. CTSH has been in the doldrums despit having great results. This stock seems to move in fits. So when the next uptrend starts I'm expecting it to be pretty quick. I should note that of these picks neither were really cheap during any of the adds. Just goes to prove that overpaying does no justice.

I calculated the returns of each pick YTD through June 30. I was surprised to see CMI leading the pack this year as it rallied all the way from the 80's to over $110. I'm still kicking myself for not adding at that price. The same goes for Altria when I canceled my order to by shares under $60. Making me look pretty foolish right now. Some other top performers are WWAV and HAIN.  I admitted to being nervous when I made some adds on both. It looks like that was unwarranted as they have really come back strong throughout the year. WWAV especially looks like I timed pretty good back in April.

One thing I did notice was how well BUD, DEO, and BTI held up during the Brexit vote. I can definitely see why investors would want to seek these stalwart names. I was really hoping Diageo would come down below $100/share.  It never happened but if it does in the next few months I'll make sure to buy. I'm just glad I was able to get the shares a bit cheaper when I did add. 

A few stocks I really want to add more to are GPN, PG, MKC, UVV, and CHD.  Actually the rest of the tobacco names I wouldn't mind either.  Also I'm still keeping my eyes out on some new names that I'd like to add. Although with the list approaching 30 names I'm trying to be very selective. Nothing seems really overpriced although the case can be made for some.  It just seems that everything is trading with enough premium to deter me from adding.  It's been especially hard to find good value right now except for European stocks.

That's all for now. Hope everyone had a great weekend. Can't wait for another quarter to be in the books!

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