FFJ Portfolio - May 2022 Report

This is my FFJ Portfolio - May 2022 Report.

In late 2021, it was very difficult to identify reasonably valued or undervalued companies. In the first 2/3rds of May, however, it was like shooting for fish in a barrel. Then, toward the tail end of May, it looked like we might be witnessing a return to 'casino-like' investor behaviour. Hopefully, this is merely temporary and we will witness further significant weakness.

Purchases

In my April report, I:

  • listed 3 new holdings;
  • the outright purchase of shares in existing holdings; and
  • increases in several holdings by way of the automatic reinvestment of dividends.

In May, I invested an additional ~$96,500 to increase my exposure to the following holdings in the FFJ Portfolio:

  • Berkshire Hathaway (BRK-b): 50 shares @ ~$300.33/share
  • Broadridge Financial Solutions (BR): 30 shares @ ~$138.43/share
  • Brookfield Asset Management (BAM-A.to): 200 shares @ ~$60.96/share
  • CME Group (CME): 30 shares @ ~$204.67/share
  • Intercontinental Exchange (ICE): 100 shares @ ~$102.71/share
  • Mastercard (MA): 30 shares @ ~$329.70/share
  • Moody's (MCO): 50 shares @ ~$300.88/share
  • S&P Global (SPGI): 50 shares @ ~$361.15/share
  • Visa (V): 30 shares @ ~$190/share

Furthermore, I acquired additional Berkshire Hathaway, Intercontinental Exchange and The Royal Bank of Canada shares in accounts for which I do not disclose details.

I also received additional shares through automatic dividend reinvestment in the following holdings which are either held in the FFJ Portfolio and/or in accounts for which I do not disclose details.

  • Blackstone (BX)
  • Verizon Communications (VZ)
  • Intercontinental Exchange (ICE)
  • AT&T (T)
  • Abbvie (ABBV)
  • Paychex (PAYX)
  • Apple (AAPL)
  • Hormel (HRL)
  • Carrier Global Corporation (CARR)
  • Bank New York Mellon (BK)
  • Walmart (WMT)
  • The Royal Bank of Canada (RY.to)
  • Emera (EMA.to)
  • The Toronto-Dominion Bank (TD.to)
  • The Bank of Montreal (BMO.to)
  • SMART Centres Real Estate Investment Trust (SRU-UN.to)

June 1, 2022 Purchases

Weakness in the share price of several high-quality companies on June 1, 2022 has prompted me to invest ~$49,000 as follows:

  • Moody's (MCO): 50 shares @ ~$287.73/share
  • S&P Global (SPGI): 50 shares @ ~$336.935/share
  • Danaher (DHR): 50 shares @ ~$259.1787
  • Intuitive Surgical (ISRG): 50 shares @ ~$214.3199

Since these purchases were made in June, the May FFJ Portfolio report does not reflect these additional shares.

New Positions

I initiated no new positions in May.

Dividend Income

The income generated from the holdings within the FFJ Portfolio is accessible here. Dividend income from WMT in 2 consecutive months (April and May) is not an error. It distributed a dividend on April 4 and on May 31.

Holdings

The month-end FFJ Portfolios are accessible here. The value of the holdings in the FFJ Portfolio as at the end of January - May 2022 are:

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

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

Final Thoughts

It pains me to read stories on social media from 'investors' having completely lost their life savings after having invested in 'junk'. People who were saving money for tuition, the purchase of a new home, or to start a business ended up 'investing' their money in crypto currencies or in companies that were doomed for failure. Many of these 'tales of woe' could have easily been avoided if people had just done some research beforehand.

For example, who in their right mind would remotely consider investing in Carvana (CVNA). Not only is the business model totally ridiculous but we also have Ernest Garcia II, the father of CVNA's CEO, who is a known felon; the guy pled guilty in 1990 to a felony bank fraud charge related to the collapse of Charles Keating's Lincoln Savings and Loan Association and spent three years on probation. Furthermore, Garcia II’s business career has included personal and corporate bankruptcies.

Garcia II does not hold any senior executive position in CVNA but we see that he and his son (Ernest Garcia III) have voting control (page 104 of 149 in the FY2021 Form 10-K). While Garcia III might not have a criminal record, 'the apple typically does not fall far from the tree'.

I am fully aware not every investment decision will be a 'winner'. A little bit of research BEFORE investing in CVNA, however, would have likely prompted many of its shareholders to cast it aside as a potential investment thus resulting in a more pleasant investment experience.

Stick with high-quality companies to increase your odds of investment 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.