Tuesday, July 02, 2019

June 2019 Performance

June was a month where calmer heads prevailed with the resolution of the Mexico tariff threat. This obviously affected Constellation Brands, which manufactures most of their beer in Mexico. Also, the earnings report helped to alleviate fears in the slow down of their beer biz. I continue to maintain a ~ 20% + position in Constellation Brands and have no reason to sell anytime soon. This company is benefiting from the mega trend in the beer biz as the old legacy brands from Coors and Bud continue their decline. Everything from what I can see points to continue growth in the Mexican beer biz. Finally, I’ll be interesting to see how their stake in Canopy growth plays out with the introduction of marijuana edibles such as beverages coming this December for the Canadian market.

Surprisingly, all my other long holdings (Apple, Alibaba, Mastercard, Qiagen, Sanofi and Visa) generated positive gains in June. I continue to maintain a very conservative tilt by holding some cash. It’s not bad with cash yielding ~ 2% in this environment. Much better than the near 0% in the previous years.

In terms of risk arb plays, I did play around with Red Hat via Short Puts. I’ve recently closed out my position with a small gain. I went in big and just didn’t feel comfortable with such risk. So, I’m back to no arb / special situation positions.

Maintaining the status quo…

2019 Performance = +24.94% with the running monthly returns as follows:

January +7.4%
February +3.7%
March +5.06%
April +7.15%
May -7.90%
June +8.2%