This brief FFJ Portfolio - January 2023 Report is an overview of recent activity.
Most of the companies I follow are apprehensive about the business outlook in the first half of 2023. However, their recent share price behaviour does not reflect management sentiment. There appears to be a disconnect and I think we witnessed a 'bear market rally' throughout most of January.
Given my outlook, I am not in any rush to acquire shares.
At the beginning of January, some companies were reasonably valued and I took the opportunity to make the following purchases through a 'Core' account in the FFJ Portfolio:
- 100 Microsoft (MSFT) shares @ ~$227 on January 4;
- 50 Danaher (DHR) shares @ $246 on January 6.
On January 25, I acquired a few Automatic Data Processing (ADP) shares @ $225/share through a retirement account for which I do not disclose details.
Please refer to the FFJ Archives for my DHR and ADP reviews posted in January.
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 January, the holdings within the FFJ Portfolio generated:
- 'Core' accounts: ~$2,441 CDN and ~$2,736 USD
- 'Side' accounts: ~$2,682 CDN and ~$2,476 USD
The USD dividend income in the 'Core' and 'Side' accounts is skewed by CME Group's $4.50/share 'special dividend'.
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.
- Automatic Data Processing (ADP)
- Broadridge Financial Solutions (BR)
- CME Group (CME)
- Danaher (DHR)
- Ecolab (ECL)
- FedEx (FDX)
- Genuine Parts (GPC)
- Heico Corporation (HEI-a)
- Merck (MRK)
- Pepsico (PEP)
- Stryker (SYK)
- TotalEnergies SE (TTE)
- Walmart (WMT)
- BCE Inc. (BCE.to)
- Canadian Pacific Railway (CP.to)
- SMART Centres Real Estate Investment Trust (SRU-UN.to)
- The Bank of Nova Scotia (BNS.to)
- The Canadian Imperial Bank of Commerce (CM.to)
- The Toronto-Dominion Bank (TD.to)
The monthly FFJ Portfolio holdings dating back to December 2018 are accessible here.
The following are the monthly values of the FFJ Portfolio over the past several months.
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
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
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
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
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
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
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
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
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
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
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
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
Core Accounts: ~$775,787 CDN and ~$2,387,269 USD
Side Accounts: ~$642,451 CDN and ~$1,520,472 USD
Total: ~$1,418,238 CDN and ~$3,907,741 USD
NOTE: The above values exclude investments in several tax-efficient accounts for which I do not disclose details.
In the short-term, stock prices do not necessarily accurately reflect a company's underlying value. As a result, making an investment decision based on a company's share price being off its 52-week high is unwise. In some cases, a company can still be overvalued even after a substantial decline in the share price.
In addition, it is foolish to invest in a company simply because it is attractively valued. Some companies with rock-bottom valuations are valued as such because they are value traps. This is why we need to closely analyze a company as opposed to making investment decisions based on stock charts.
In multiple posts, I stress the importance of investing in high-quality companies. Even they, however, can experience challenges. On the bright side, when such companies hit a 'speed bump', it may present a buying opportunity. The same can not be said if you invest in 'substandard' companies. Such companies are not merely hitting a 'speed bump' but rather are 'driving off a cliff'.
It is impossible to consistently and accurately predict short-term share price behaviour. However, I do not have a favourable outlook on the current market conditions and envision a broad market pullback within the first half of 2023. I am, therefore, in no hurry to acquire shares.
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.