Just some thoughts…

I recently updated My Portfolio’s investment results for the first 6 months of 2017 here! I will soon update the Viet Moat Portfolio too, which won’t be as good sadly :(. Anyway for details of the 2 portfolios, you can click here

Thought 1: Coke looks incredibly “value”!

Coke is currently trading at 3.07% dividend yield and in the past 10 years it has grown dividend compoundingly (just invented that word) by 8%. In addition it has 50+ years of record of consecutive dividend growth.

They should also print Charlie’s face on it too!

“hah Vin you definitely run out of ideas”…”meh you just buy it because of Buffett”…”it’s boringggg”…”god you need something more exciting man, go buy bitcoin!”…

I think I shall ignore this and keep my head as rational as I can:

A yield of 3.07% looks “value” for a quality company that has a brand existing and thriving for over a century. Assuming the yield will rationally drop back to 2.5% (my dividend-yield yardstick of a good quality company) and that dividend would continue to grow at 8%, in a 10-year horizon this would translate into a total annual return of roughly 9.8%. Anyone who says 9.8% annual return is low is completely ignorant of the historical compound return of the general stock market.

“but dude what about health issue? Don’t you want people to drink less sugary products?” Duh yh, as a dancer maintaining a healthy diet regime is key, so is coke when it comes to taking this matter seriously. A quick visit into any of the big brick and mortar retailers in the UK would review that more than half of the soft-drink shelf are stacked with no-sugar or diet version of popular soft-drink brands. So far this has translated into perfectly organic price-and-volume growth track record for Coke!

Thought 2: Live up to my promise

As a promise to visitors of the blog I shall keep things as transparent as I could.

As such by the end of June I would report on the 6-month performance of the Viet Moat Portfolio – a Vietnamese-focused portfolio I help manage on behalf of my parents. The portfolio only equates to roughly 5% of their entire assets.

Quick word: given their age, risk tolerance and their real estate/engineering background I think a 5% exposure to Vietnamese stock market (frontier babe XD) is acceptable. Though there is this question that keeps bothering me:

“If you are a global investor, or better yet if you just come from another planet with no country bias (lol), how would you allocate your money?” if aliens have any sense of what money is haha! They probably would have much advanced and universal “currency” which would render FX trading obsolete *thank god!*. I think the odd is that Vietnamese stock exposure would likely be somewhere of < 1%.

How would you invest Mr. Human Xenomorph?

Anyway, the VMP portfolio hasn’t been doing well, but hasn’t been a complete catastrophe either. It’s so-so. This so-so performance has been due to one big mistake which I talked about in past articles but will re-mention it in my upcoming report at the end of June. So chuẩn bị gạch đê bạn ơi! 

Thought 3: Brand and switching cost advantage

I feel like I gradually develop a circle of competence in assessing companies with 2 key moats, in the terms of Pat Dorsey: brand and switching cost advantage. Just like another master of mine – Nick Train who developed a competent area of focusing on companies with superior brand and unique contents, would it be the time for me to draw the line and go “ok let’s just now focus on companies with either brand or switching cost advantage or both, the other moats could wait”?

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The “what you think you know” circle is in reality much wider!

This would definitely narrow down my quality universe significantly but it would enhance the quality of each investment made…

“God damn the Cadbury chocolate tastes goooood! Such a powerful product, I shall consider Mondelez. One hell of a chocolate portfolio of brands they have!” 

Thought 4: The social value of investing

Lots of people can’t still grasp the idea of picking stocks for a living. At the end of the day to a lot of people it’s a zero sum game that doesn’t add any value to the society. It’s mere legally stealing money from one pocket to another.

This is totally true in the short term! I like to think of this like so: in the short term the value of a company goes sideway. It’s one horizontal line. If you buy the shares above the line someone else would end up selling at that price and, when the price drops back to the horizontal line you lose and the other guy wins. Or vice versa with you winning by buying at below the horizontal line and someone else losing by selling it. Yet in the long term, the value of a (good) company tends to go up and hence regardless of where you buy the stocks, below or above the line, you and everyone else are poised to realise the increase in net worth of the company. This very act of buying with a serious long-term mindset makes you and me a capital allocator, or a wealth accumulator. Being a good one though adds so much value to the world *look at Buffett*.

So I guess my job is to allocate my own personal wealth efficiently so that good companies are promoted and ensured to be alive and thrive, so that it could continually contribute to the society via producing value-added products and services.

Does this guy add any value to the world? “ABSOLUTELY FUCKING NOT” – Jordan Belfort as played by Leo Dicaprio

Yet I’m not at the stage where I could sustain myself as a full-time private investor, NOT trader!. To be a full-time private investor I would need an amount of wealth of which I could comfortably live off on 3%. Then again this is a matter of, not just investing, but smart saving! I think saving is a very….very UNDERRATED topic in today world where everyone seems to be a bit of a consumerist (including myself!)

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