FFJ Portfolio - December 2022 Report

This FFJ Portfolio - December 2022 Report provides an overview of what transpired during the month.

The broad market pullback in late September/early October allowed investors to acquire shares in great companies at reasonable valuations. November was somewhat disheartening as valuations started to creep higher. By mid-December, however, market sentiment had changed. Therefore, I took the opportunity to increase my exposure to a few companies that had fallen out of favour with investors.

Additions

Blackstone (BX) has been under scrutiny in that it has restricted investor withdrawals from its Blackstone Real Estate Income Trust Inc. (BREIT). In my December 1 post, I explain why I acquired another 100 Blackstone (BX) shares @ $86.04 in one of the 'Core' accounts in the FFJ Portfolio. In hindsight, I should have been a bit more patient with this purchase.

I had a small amount of cash in the 'Core' account in the FFJ Portfolio which has Microsoft (MSFT) exposure and elected to acquire a few additional shares on December 16 @ ~$244.76.

On December 22, I acquired another 50 shares Paychex (PAYX) shares @ $110.63 in one of the 'Core' accounts in the FFJ Portfolio. My rationale for adding to this position is covered in my December 23 post.

I have Apple (AAPL) exposure in one of the 'Side' accounts within the FFJ Portfolio. However, on December 23 I initiated a 100 share position @ $130.98 in one of the 'Core' accounts in the FFJ Portfolio. I subsequently acquired another 100 shares through the same account on December 30 @ $128.64; I reviewed AAPL in this December 23 post.

On December 28, I relistened to a 'fireside chat' (transcript) with Bruce Flatt, Brookfield's CEO, at the Goldman Sachs 2022 US Financial Services Conference and made the following purchases:

  • Brookfield Corporation (BN): 100 shares @ $42.49 in one of the 'Core' accounts in the FFJ Portfolio.
  • Brookfield Asset Management (BAM): 100 shares @ $39.19 in one of the 'Core' accounts in the FFJ Portfolio.

Dividend Income

My investment decisions are based on risk, valuation, and long-term total potential return. Dividend metrics are of secondary importance. Nevertheless, I do track dividend income.

The income from the holdings within the FFJ Portfolio is accessible here.

During December, the holdings within the FFJ Portfolio generated:

  • 'Core' accounts: ~$1,831 CDN and ~$5,785 USD
  • 'Side' accounts: ~$2,218 CDN and ~$3,433 USD

In 2022, the holdings within the FFJ Portfolio generated:

  • 'Core' accounts: ~$29,989 CDN and ~$36,392 USD
  • 'Side' accounts: ~$23,702 CDN and ~$20,742 USD
  • Total: ~$53,691 CDN and ~$57,134 USD

In December, I received dividend income from the following companies in accounts included in the FFJ Portfolio and in retirement accounts for which I do not disclose details.

  • Becton Dickinson (BDX)
  • Chevron (CVX)
  • Church & Dwight (CHD)
  • CME Group (CME)
  • Coca-Cola (KO)
  • Emerson Electric (EMR)
  • Exxon (XOM)
  • Fortive (FTV)
  • Goldman Sachs (GS)
  • Home Depot (HD)
  • Intercontinental Exchange (ICE)
  • Johnson & Johnson (JNJ)
  • Lockheed Martin (LMT)
  • McDonald's (MCD)
  • Moody's (MCO)
  • Nike (NKE)
  • Otis Worldwide (OTIS)
  • Raytheon Technologies (RTX)
  • Rollins (ROL)
  • S&P Global (SPGI)
  • Union Pacific (UNP)
  • United Parcel Service (UPS)
  • Visa (V)
  • Alimentation Couche Tard (ATD.to)
  • Brookfield Asset Management (BAM.to)
  • Brookfield Corporation (BN.to)
  • Brookfield Infrastructure Partners (BIP-UN.to)
  • Brookfield Infrastructure Corporation (BIPC.to)
  • Brookfield Renewable Partners (BEP-UN.to)
  • Brookfield Renewable Corporation (BEPC)
  • Canadian National Railway (CNR.to)
  • Enbridge (ENB.to)
  • Intact Financial (IFC.to)
  • SMART Centres Real Estate Investment Trust (SRU-UN.to)

While CME distributed its regular quarterly dividend in December, its dividend policy includes the declaration of a 'special' dividend every year for distribution in mid-January. In my November 14 CME post I wrote:

'After comparing CME's YTD2022 results against those for the first 9 months of the recent prior fiscal years, I envision the declaration of at least a $3/share 'special dividend'. The 4 quarterly $1/share dividends plus the $3/share 'special annual variable dividend' means investors who have held shares since the beginning of 2022 would receive $7/share in total annual dividend income.'

It turns out I underestimated the amount of the 'special' dividend. On December 8, CME declared a $4.50/share 'special' dividend for distribution on January 18.

Holdings

The January - December 2022 FFJ Portfolios are accessible here.

Despite the wild fluctuations in the value of the FFJ Portfolio, I am not concerned.

January 2022

Core Accounts: ~$773,000 CDN and ~$1,858,000 USD

Side Accounts: ~$666,000 CDN and ~$1,475,000 USD

Total: ~$1,439,000 CDN and ~$3,333,000 USD

February 2022

Core Accounts: ~$778,000 CDN and ~$2,014,000 USD

Side Accounts: ~$672,000 CDN and ~$1,465,000 USD

Total: ~$1,450,000 CDN and ~$3,479,000 USD

March 2022

Core Accounts: ~$810,000 CDN and ~$2,118,000 USD

Side Accounts: ~$696,000 CDN and ~$1,554,000 USD

Total: ~$1,506,000 CDN and ~$3,672,000 USD

April 2022

Core Accounts: ~$770,332 CDN and ~$2,026,487 USD

Side Accounts: ~$658,363 CDN and ~$1,514,137 USD

Total: ~$1,428,695 CDN and ~$3,540,624 USD

May 2022

Core Accounts: ~$784,833 CDN and ~$2,133,728 USD

Side Accounts: ~$661,080 CDN and ~$1,499,998 USD

Total: ~$1,445,913 CDN and ~$3,633,726 USD

June 2022

Core Accounts:  ~$742,473 CDN and ~$2,006,645 USD

Side Accounts:  ~$595,911 CDN and ~$1,401,823 USD

Total:  ~$1,338,384 CDN and  ~$3,408,468 USD

July 2022

Core Accounts:  ~$794,405 CDN and ~$2,230,466 USD

Side Accounts:  ~$644,255 CDN and ~$1,539,292 USD

Total:  ~$1,438,660 CDN and  ~$3,769,758 USD

August 2022

Core Accounts:  ~$740,560 CDN and ~$2,064,323 USD

Side Accounts:  ~$637,547 CDN and ~$1,478,073 USD

Total:  ~$1,378,107 CDN and  ~$3,542,396 USD

September 2022

Core Accounts:  ~$707,781 CDN and ~$1,894,989 USD

Side Accounts:  ~$612,394 CDN and ~$1,311,542 USD

Total:  ~$1,320,175 CDN and  ~$3,206,531 USD

October 2022

Core Accounts:  ~$740,555 CDN and ~$2,160,153 USD

Side Accounts:  ~$624,677 CDN and ~$1,441,483 USD

Total:  ~$1,365,232 CDN and  ~$3,601,636 USD

November 2022

Core Accounts:  ~$785,647 CDN and ~$2,311,806 USD

Side Accounts:  ~$653,367 CDN and ~$1,516,013 USD

Total:  ~$1,439,014 CDN and  ~$3,827,819 USD

December 2022

Core Accounts:  ~$737,157 CDN and ~$2,271,705 USD

Side Accounts:  ~$602,514 CDN and ~$1,438,680 USD

Total:  ~$1,339,671 CDN and  ~$3,710,385 USD

NOTE: The above values exclude investments in several tax-efficient accounts for which I do not disclose details.

Final Thoughts

I have read multiple earnings transcripts of late. On almost every earnings call, senior management has expressed apprehension about 2023. Given their cautious outlook, I think it is wise for investors to also be cautious.

I wish you much success on your journey to financial freedom.

Note: Please send any feedback, corrections, or questions to [email protected].

Disclaimer: I do not know your circumstances and am not providing individualized advice or recommendations. I encourage you not to make any investment decisions without conducting your research and due diligence. You should also consult your financial advisor about your specific situation.

I wrote this article myself and it expresses my own opinions. I am not receiving compensation for it and have no business relationship with any company whose stock is mentioned in this article.