Superb companies at very attractive prices
Since I started this blog almost two years ago it has been focused on the investment process. It has addressed the question of how one goes about successful investing.
The main shortcoming of my posts has been that they contain ‘what I say’. Today’s post will look at ‘what I actually am doing’.
Over the years my default asset allocation has always been 100% equities. From time to time I have switched to treasury bills and 2 year bonds. But since the fall of 2002 I have been 100% in common stocks. I invest only in superb companies and then, only if they can be bought at very attractive prices. It is value investing pure and simple but the companies must have really good growth prospects. The common thread is that the companies all generate substantial owner earnings. With a couple of exceptions they are tangible-asset light. Their assets tend to include substantial economic goodwill which is generally not shown on the balance sheet. If you want to learn more about owner earnings and economic goodwill click on those key words on the scatter Tags Index on the home page.
I have only ever owned one mutual fund. That was an equity fund in the 1970s. I have never owned any ETFs with the exception that I bought a miniscule position in one U.S. ETF and one Canadian ETF to learn about them so as to advise my kids.
It has worked
This approach has worked. Since our family started saving for retirement in 1972, the compounded total return on our savings has been 13.42%. Twelve years ago our discount broker, RBC Action Direct a unit of the Royal Bank of Canada, Canada’s largest bank, initiated a performance tracking feature. Since then our compounded total return has been 15.80%. As of today, our year to date return is 21.7%.
Our family portfolio
Let’s look at today’s portfolio. The Canadian dollar side contains seven Canadian companies which make up 53.56% of the portfolio. The U.S. side has five U.S. based companies making up 45.88% of the portfolio. There is .56% in cash. Since May of 2020 I have added no new positions and not deleted any positions.
I am listing the stocks we own. I’m not suggesting you buy them. This is not a portfolio recommendation list. My only idea with my blog and website is to help readers to ‘learn how to fish’. I am not offering a ‘bucket of fish’ as a recommended portfolio.
CCL INDUSTRIES INC CL-B NON-VOTING SHARES – CCL.B
CCL is the world’s largest converter of pressure sensitive and specialty extruded film materials. It employs more than 22,000 people operating over 190 production facilities in 40 countries with corporate offices in Toronto, Canada. The founding family controls the company. Current President and CEO is not a family member. He has steered the company through solid growth over the last decade and holds almost $100 million of common shares and units. Market cap: $12.8 B CAD; Portfolio weight 7.42%; have held for more than 5 years.
COLLIERS INTERNATIONAL GROUP INC SUB VTG SH – CIGI
Colliers is a Canadian global real estate services and investment management company. It operates in 67 countries around the world. It is controlled by its founder who is the current CEO whose ownership stake is worth some $245 M CAD. It has an asset light business model with high owner earnings. Market cap: $6.2 B CAD; Portfolio weight 7.30%; initiated holding in spring of 2020.
EVERTZ TECHNOLOGIES LTD – ET
Evertz is a global manufacturer of broadcast equipment and solutions that deliver content to television sets, on-demand services, WebTV, IPTV, and mobile devices (like phones and tablets). It is based in Hamilton, Ontario in Canada. The two founders still run the company and their common shareholdings are worth in the order of $.5 B CAD. Market cap: $1.1 B CAD; Portfolio weight 2.57%; have held for more than 5 years.
FIRST QUANTUM MINERALS LTD – FM
First Quantum is a global copper company headquartered in Canada. It produces copper in the form of concentrate, cathode and anode, and produces smaller proportions of nickel, gold and cobalt. It operates long life mines in several countries and employ approximately 20,000 people world-wide. Run by one of the company founders whose share ownership is about $100 M CAD. Market cap: $23.3 B CAD; Portfolio weight 8.21%; have held for more than 5 years.
ONEX CORPORATION SUBORDINATE VOTING SHARES – ONEX
Onex Corporation is a Toronto, Canada based investment manager founded in 1984. The firm manages capital on behalf of Onex shareholders, institutional investors and high net worth clients around the world. As of December 31, 2020, Onex had approximately US$44 billion of assets under management. Primarily it engages in private equity investing. It is run by the founder and a team that collectively have some $2 B CAD personally invested in the common shares of the company. Market cap $7.6 B CAD; portfolio weight 8.00%; have held for more than 10 years.
TOROMONT INDUSTRIES LTD – TIH
Toromont Industries Ltd. sells, rents, and services Caterpillar construction equipment and power systems in the provinces of Ontario, Manitoba, Newfoundland, Labrador and Nunavut, Canada. The Company also manufactures and distributes refrigeration and process systems throughout North America. The board chair holds about $140 M of common shares and the CEO about $15 M. Market cap $8.7 B CAD; portfolio weight 10.82%, have held for more than 20 years.
SPIN MASTER CORP SUBORDINATE VOTING SHARES – TOY
Spin Master Corp. is a children’s entertainment company creating exceptional play experiences through a diverse portfolio of innovative toys, entertainment franchises and digital games. It has 28 offices globally. It distributes products in more than 100 countries. The three founders run the company and have about $2 B CAD in common share ownership. Market cap $4.4 B CAD; portfolio weight 9.13%; initiated the position in the spring of 2020.
Our U.S. companies
APPLIED MATERIALS INC – AMAT
Applied Materials is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Its expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. The current board and executive officers hold about $1 B USD common shares. Market cap $122 B USD; portfolio weight 7.83%; position initiated in the spring of 2020.
AMAZON.COM INC – AMZN
The company’s businesses include Amazon Store; Delivery & Logistics; Devices and Services; Amazon Web Services; and Entertainment. The directors and executive officers have their substantial net worth of billions of dollars invested alongside other shareholders. Market cap $1.7 T USD; portfolio weight 8.66%; position initiated in spring of 2020.
C H ROBINSON WORLDWIDE INC. – CHRW
C.H. Robinson is one of the world’s largest logistics platforms. It provides freight transportation and logistics, outsource solutions, produce sourcing, and information services to 105,000 customers through a network of offices in North America, South America, Europe, Asia, and Oceania. It provides its customers access to 73,000 transportation providers worldwide, including contract motor carriers, railroads, air freight carriers, and ocean carriers. The directors and executive officers have together some $250 M USD in common shares. Market cap $13.2 B USD; portfolio weight 7.39%; have held the shares for more than five years.
SALESFORCE.COM INC. – CRM
Salesforce is the world’s #1 customer relationship management (CRM) platform. It provides cloud-based CRM applications for sales, service and marketing. The directors and executive officers as a group hold some $8 B USD in common shares. Market cap $200 B USD; portfolio weight 8.01%; have held the share of more than five years.
CHARLES SCHWAB CORP. – SCHW
The Charles Schwab Corporation is a leading investment services firm with $7.07 trillion in client assets. The founder is chair of the board although in his mid-80s with shareholdings worth some $10B USD. The current CEO has run the company for many years and his equity ownership is worth approximately $175M USD; Market cap $135B USD; portfolio weight 13.68%; have held the shares for more than five years.
So there it is. The portfolio is run in accordance with the investment principles discussed in my blog posts. This is explained in more detail in the Mothelode. I have never had an investment advisor. The research I use is as provided by my discount broker, i.e. no research edge. I have no special access to information, i.e. no information edge. To succeed in investing ‘do it yourself’ (DIY) investors need to study, practice and work at it. They are at no disadvantage to the ‘pro’s’. In fact, it may be easier because DIY investors have no ‘client’ pressures.
You can reach me by email at email@example.com
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