My goal was to not do sales but I failed in 2024. My portfolio is still down 2% for the year and has negative momentum across the board. I don’t know if I will beat this crazy speculative and bubbly market but the mathematics and objective metrics predict that I will. Time will tell. Value investing is a proven and backtested strategy.
I am sure that this market is very dangerous on the downside for people exposed to expensive stocks, industrial stocks and cyclical AI stocks.
1-Potential bad sales.
I sold my Fairfax financial with a comfortable profit since I bought in Sept 2022, when muddy waters released their short report. I had bought Fairfax sometime recently when rates were starting to rise. With such nice gains in a very short period, and no idea of the impact of the short report, I sold. That could be an error to react quickly, because it looks like it is a good quality company. Anyway, with the proceeds I added to existing ones.
I am not an expert on insurance, but it’s clear that the book value is a aggressively noted, with some assets benefiting from an epic bubble in Indian equities and overvalued US real estate, as well as temporary high interest rates. It does seem that earnings are above the normal trend. The company keeps performing well and is cheap based on current high rates elevated earnings, so It was not the best sale. I think that is it still a good company for the long term
I sold IWG PLC, after a quick rerating from my initial buy prices. It is still cheap and pretty interesting. However the Franchise segment was still loss making, which is a bit underwhelming. It is a good company, but why would I sell?
Well the answer is below:
2-Additions and one tracking position
Because there are incredible buys in France and emerging markets, just incredible quality at bargain prices, so I added one new name and a tracking position in another EM serial acquirer.
I also increased positions in existing names. There are very very low valuations available at the moment and this is a historic moment in my opinion to get cheap stocks.
Look at these extracts from Koyfin regarding EM stocks.
For example I added to Alibaba, because I like investing in quality. This is an absolute quality company juggernaut, that is hitting some competition challenges and a very very tough economy similar to the 2009 crisis in the west. On the positive side, it has many undermonetized segments such as Lazada, Turkey, Aliexpress, Logistics, Cloud and Ant financial. The valuation is really cheap also, and there are capital returns in the form of dividends and buybacks.
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