I guess it’s time to review my mid-year performance. So far
I’ve been pleased with the performance as my portfolio has generated a return of
19.29% from January to June. July is looking promising with a return of +2.96%
as of July 20th
. Here are my returns on a monthly basis:
This year, I’ve been more disciplined in terms of cutting my
losses when a trade does not work out. For example, I recently sold out my
position in MoneyGram International generating a net loss of 11.13%. Like I
mentioned before, once a position hits a 10% loss I will start to sell out a
position. One can always re-enter a position, but you don’t want to let a
losing position get away from you. I've also been more careful with position sizing to minimize potential blow ups that can vaporize ones gains.
I may write about my merger arb / special situation trades, but I do buy and hold
companies for the long term such as VISA Inc., which I purchased in the IPO and
plan on keeping it for a long long time.
My largest position is currently Constellation Brands, which
I entered as a special situations play when it acquired assets from Anheuser
Bush InBev in its acquisition of Grupo Modelo S.A.B. As I learned more about the biz and
the potential earnings power, I gained a strong conviction and plan on hanging
onto Constellation Brands for at least the next few years. Looking out 3 years,
this company has the ability to generate ~ $1 billion in annual free cash flow.
For a company of this size, this is serious cash generation.
I guess that's it for now. Hopefully, the second half of the year will produce decent
returns so we’ll see…