Investment Portfolio #1 – State of Affairs

This is the first instalment of my investment portfolio series (Hopefully?). I aim to publish my investments and my reasoning behind them. The investments will be listed by name and percentage of total assets and percentage change but not by actual value, to protect my privacy somewhat. I have no fortune by any means so don’t get all excited ;).

The first post will mostly be an overview on my current investments.

Note: Some of the assets lack Change %, these investment are rather old and I do not have the initial valuation readily available (Thanks Handelsbanken…). I am very long term in my investments and do not have any plans to move away from the stock market in the short to medium future, though some of the individuals shares are likely to change.

NameSymbol% of totalChange %
Total100.00%80.47%
ABB LTDABB6.99%25.27%
AFRICA OILAOI0.68%-60%
ATLAS COPCO BATCO-B11.18%115.2%
BILLERUD KORSNÄSBILL4.63%-
ENQUESTENQ0.66%-24.06%
ERICSSON BERIC-B2.49%25.6%
ETRIONETX0.04%-64.51%
HANSELSBANKEN ASHB-A22.72%-
LUNDIN PETROLEUMLUPE3.75%91.31%
NORDEANDA-SEK7.36%-
SANDVIKSAND0.58%-27.31%
VOLVO BVOLV-B1.22%-16.78%
Handelsbanken Sverigefond-37.70%92.69%

My investments primarily consists of Swedish industrial giants, with banks taking up a SIGNIFICANT portion of my investments. This has been good to me over the years but I am very exposed to the financial sector. It should be noted that my Handelsbanken Sverigefond also is heavily invested in the banks, as they are a big part of OMXS. Below are the top ten stocks in said fund.

Handelsbanken Sverigefond 
Hennes & Mauritz AB Class B9,7%
Nordea Bank AB7,4%
LM Ericsson Telephone Company Class B5,9%
Atlas Copco AB Class A5,0%
Svenska Handelsbanken Class A4,2%
TeliaSonera AB4,2%
Skandinaviska Enskilda Banken AB Class A4,1%
Swedbank AB Class A4,0%
Investor AB3,8%
Volvo Group3,3%

I am currently in the process of evaluating my investments, I am definitely looking to divest from the Sverigefond as it closely match index, yet charge 1.4% fee. This year it has been good to me, it has earned it’s fee compared to index. Another investment opportunity I am researching is investing in my employer, H&M. I think it is a pretty good idea to at least put some money into the company you work at. However, to account for risk, you probably should have significantly more money in other assets than your employer.

Earlier in the year I sold off most of my shares in Sandvik and Volvo as well as some in Lundin Petroleum, all three were good choices as the stock prices has been unfavourable since.  To date, Africa Oil are among my least successful investments but in the long term I remain positive to the company’s future prospects. Oil prospecting is risky and they are hurt by the political landscape in sub-Saharan Africa and the low oil price.

I am happy to get any and all feedback on my investments and suggestions for improvements to the portfolio. I also have another fund that I didn’t have the opportunity to publish here but it will be included in the next post.

– P

Did you find this post interesting, illuminating, controversial or silly? Leave a comment below or send me a tweet (@Chronoo).

Bitcoin: Volatility Without Recourse

I like to keep my money digitally, in fact I have a distinct dislike for physical cash. Luckily I just about never carry any cash thanks to how well established debit/credit cards are in Sweden. However, I am not a fan of alternative ‘currencies’ such as bitcoin. Sure, it is digital, but it is also terrible in just about every other respect.

I guess most of my dislike stems from the fans of bitcoin, whom all sound like boiler-room pump and dump salesmen. Bitcoin is terribly suited as a currency in its current state, it is quite frankly too volatile, too harsh on consumers and quasi-deflationary.

Bitcoin exchange rate, 1 year

Bitcoin exchange rate, 1 year, from coinbase.com

The price of bitcoin has been volatile over the last year to say the least. It was at one point worth over $1000 per bitcoin but the price is at the time of writing at $325 per bitcoin. Not a terribly good investment from those who bought in at $1000. We should not kid ourselves either, most of the people holding bitcoin today are speculators or use bitcoin to pay for illegal activities, both alternatives aren’t exactly something that inspire confidence in a fledgling currency.

Another problem is that bitcoin is very prone to market manipulations, the volumes are small enough that a few individuals can influence the price with ease. The high exchange rate in the end of 2014 looks like a pump and dump scheme to say the least. At the same time most people could not withdraw their bitcoin or fiat currencies from the biggest exchange, MtGox, leading to an unhealthy environment where the market was non-functional for all intents and purposes.

Still, the price has made a terrific journey for the last year, but the volume of trade is still largely the same, it has increased somewhat but has in no way matched the price curve. The volume is quite simply small and insignificant at any reasonable perspective, especially when comparing to other currencies or even just trade in general.

Bitcoin transaction volume

Bitcoin transaction volume, from coinbase.com

The extreme volatility of bitcoin, in comparison to normal currencies makes it a terrible store of value and even worse for normal spending. It is a terrible speculation Ponzi scheme run by pump and dump salesmen and gold bugs who fear government backed currencies. Here is a hint; gold and bitcoin will not save you from the Rapture. Bitcoin transactions are irreversible, which in itself should disqualify as a new/better currency. Bitcoin totally lacks consumer protections and does not make it easy to keep your assets secure. Practically anyone owning bitcoin is at risk of losing it due to the slightest mistake, and without ANY recourse. That is a terrible feature in a new currency.

Want to get rich? Invest in index funds with no or very low fees. Be diverse, be long-term and for the love of god, don’t gamble with money you cannot afford to lose.

 

– P

Did you find this post interesting, illuminating, controversial or dumb? Leave a comment below or send me a tweet (@Chronoo).

Jobs per $1.000.000 Invested

I came across an infographic in /r/Economics today, it depicts the number of jobs you can ‘create’ with a $1.000.000 investment (in USA). According to the infographic, an investment in natural gas creates 5 jobs, coal 7 and mass transit 22.

Jobs per $1.000.000 invested

Jobs per $1.000.000 invested in various industries, mostly energy.

My initial reaction was that we should spend a lot of money on mass transit investments but after thinking it through it struck me that it is low pay jobs, inefficient use of capital. It illustrates that the mass transit industry (and building retrofits) are terribly inefficient in terms of labour.

That said, the graph only says how many you can employ for $1m and does not mention anything regarding externalities, Return on investment (ROI) or economic growth (where mass transit may contribute a lot). Not to mention that the energy industries and mass transit industry does not overlap in terms of labour force, even if they are related to energy (and efficient use of energy). As it stands now, the infographic is fun to look at and may spark political discussions but it is woefully inadequate to have serious discussions.

And I think it is safe to assume that the Mass transit labour earns a very meager wage compared to the other industries.

-P

Comments? Am I totally wrong in my ‘analysis’ (if it can be called that)? Feel free to leave a comment below or send me a tweet at @Chronoo