I haven’t been able to provide a detailed update on my holdings. Here is a quick update:
Q2 performance was bad for my portfolio. Almost all my holdings were hit and with a concentrated fund it can get ugly quick. Although I believe no one quarter is an indication of my analysis being right or wrong. For most of the companies that were hit hard, I was buying more in Q2. This further worsed the results in the short-run but I’m convinced in the long-run I will come out ahead.
I was adding position in HNR, HALL and HEK. I also sold out of BTC and GGP in the quarter. BTC is a turnaround play that is working out as planned, albeit I sold it to raise cash for other purchases. GGP has been an amazing return in a short period. It has been more than a 10-bagger (including HHC) in less than 2 years.
The last 2 weeks have been very interesting for the market and my holdings. The downgrade of US debt rating is a mind-boggling error from S&P. As Buffett said it “makes no sense”. The market’s reaction to this downgrade seems to makes even less sense. In no way does the downgrade of the US debt justify companies losing 10-20% of their market value in a few days. In most cases, the business prospects for companies does not change that dramatically in days.
I took the sell-off as an opportunity to buy companies that I know were selling cheap. The problem with the dramatic market decline is it didn’t provide much time to research new ideas. I had a cash balance of over 20% before the market decline. I used the sell-out to put half of the cash to work, buying companies like Berkshire and Goldman Sachs.