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Due to family commitments, I have been unable to provide timely updates of my investment activity subsequent to my November 4 Paycom post. The purpose of this brief post is merely to disclose recent increases in my Thermo Fisher, Danaher, and Veeva exposure.
Thermo Fisher Scientific (TMO)
When I wrote my November 3 TMO post, shares were trading @ ~$558 and I stated that it was on my 'Watch List'.
As luck would have it, I was able to acquire another 100 TMO shares @ ~$507 on November 18 thus bringing my TMO exposure in the FFJ Portfolio to 277 shares.
Danaher (DHR)
I last wrote about DHR in this July 24 post at which time shares were trading @ ~$264 and I deemed shares to be marginally overvalued. At the time, the most current financial information was for the first half of FY2024.
On October 22, DHR released its results for the first 3 quarters of FY2024. I acquired 55 shares @ ~$245 on October 25 and another 100 shares @ ~$229 on November 18. My DHR exposure is now 600 shares.
Veeva Systems (VEEV)
In my August 29 post, I wrote about VEEV's strong FCF cash flow generating capabilities and its fortress Balance Sheet. At the time, shares were trading @ ~$218.
On November 7, VEEV held its 2024 Investor Day at which time management disclosed its ambitious target of doubling annual to revenue to $6B by FY2030 while maintaining at 35%+ non-GAAP Operating Margin. VEEV's share price rocketed higher following this Investor Day. Fortunately, the share price pulled back and I acquired another 100 shares @ ~$210 on November 19. My VEEV exposure is now 500 shares.
If VEEV piques your interest, be aware that it is scheduled to release its Q3 and YTD results after the December 5 market close.
Final Thoughts
The valuation of several existing holdings defies all logic. This has led to the value of the FFJ Portfolio and retirement accounts, for which I do not disclose details, having gone parabolic in recent months. I am not, however, a trader and have no plans to exit any positions. At the same time, I am not aggressively acquiring additional shares.
Investors with exposure to broad based ETFs or ETFs heavily exposed to grossly overvalued companies...good luck to you. As the value of 'high fliers' increase, many ETFs are structured to increase their exposure to these companies. They are essentially increasing their exposure in richly valued companies.
Doesn't it make more sense to 'zig' when markets 'zag'? Why increase exposure to grossly overvalued companies versus investing in great undervalued/fairly valued companies?
I can't help but notice the similarities between the North American equities markets and the Toronto and Vancouver, Canada real estate markets.
In 2020 - 2022, people were tripping over themselves to acquire real estate and bidding wars were the norm. Homes were selling well above list price!
Now, the chickens have come home to roost.
Mortgage defaults are rising and messages of desperation on social media are prevalent. In many circumstances, real estate is being sold for several hundred thousand dollars below what the sellers paid just a couple of years ago.
How is this similar to the North American equities markets? People are investing in companies based solely on share price behavior; I touch upon this in my October 18 You Can't Fix Stupid post.
Please be cautious in this environment.
I wish you much success on your journey to financial freedom!
Note: Please send any feedback, corrections, or questions to [email protected].
Disclosure: I am long TMO, DHR, and VEEV.
Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your research and due diligence. Consult your financial advisor about your specific situation.
I wrote this article myself and it expresses my own opinions. I do not receive compensation for it and have no business relationship with any company mentioned in this article.
