Wednesday, December 28, 2016

End of year overview 2016



For the fourth time I will now make an end of the year summary regarding my current holdings. Some companies have been with me for a longer time and a few companies have been with me for a shorter time in my stock portfolio. This year was a year focused on work on not on my companies. In the end... one must always focus on what pays out the most money and even though my dividend payments are not insignificant they are still far from being able to support and pay for my life as I live it today. Very few companies entered the portfolio during 2016. I bought an ETF Portugal because their work ratio looked so good. I then bought shares in the company that I started working in which I consider to be a necessity and then I received Uniper as a gift from E.On. when it comes to calculations then to me the generated value is (share price * shares + dividend - trading fees).



For the previous please click on end of year overview 2015 for the one before then please click on end of year overview 2014 and for the one before then please click on end of year overview 2013. I will refer back to previous overviews especially regarding the reason for the investments.


E.On, a German energy company

Company: E.On.
Shares: 400
Invested: 4533 € (+400 € Uniper)
Value: 2592 € (-43%)
Dividends: 848 €
Generated value: 3930 € (-13%, +516 € Uniper)
Bought: 2012
Reason for investment: See previous end of year overview 2013.
Lesson learnt: Already talks of splitting a company and handing that out to the shareholders can increase the share price temporarily. For E.On it directly started dropping again afterwards. The danger of too many institutional owners that just goes along and accepts everything the management do. I have yet to see any value increase coming from the split into Uniper and E.On. but i will wait.

DB, a German bank

Company: Deutsche Bank
Shares: 280
Invested: 7843 €
Value: 4892 € (-38%)
Dividends: 551 €
Generated value: 5395 € (-31%)
Bought: 2012
Reason for investment: See previous end of year overview 2013.
Lesson learnt: Sometimes enough is enough and even crooks can be kicked out from management. It did however take around six years. The new boss arrived with big changes that caused excitement on the market and the share price increase but over time that has dropped down significantly again and is now very low. Additionally... and this goes for several of my shares. I have strongly under-estimated the time it can take for a turn around to happen. A share can always drop another -50% which it did during 2016. All the illegal activities have still not been sorted out and by the look of it... the two crooks allowed new more illegal stuff to happen even after 2008/2009. Sell shares directly when the management are crooks because they will have a staff of crooks and like-minded people around them.


BP, a British oil giant

Company: British Petroleum
Shares: 800
Invested: 4042 €
Value: 4608 € (+14%)
Dividends: 707 €
Generated value: 5270 (+30%)


Bought: 2012
Reason for investment: See previous end of year overview 2013.
Lesson learnt: When a turn around have actually started to turn around, in this case because finally the legal situation was over, a completely new situation can arrive that is going on the entire industry and not on an individual company as such but either way it does not matter. Oil prices dropped and BP dropped with it as all the other oil companies did. Looking back is easy. High prices lead to higher production and searching for new sources which lead to over production and decreasing prices. Could one have seen this coming. Yes, one probably could have. Did I? No, I did not consider that. Where today do we see too high prices? Where are the prices too low? Mining industry? What else?

Coba, a German bank

Company: Commerzbank
Shares: 720
Invested: 7650 €
Value: 5521 € (-28%)
Dividends: 759 € (including sale of pre-emptive rights by mistake)
Generated value: 6225 € (-19%)


Bought: 2012
Reason for investment: See previous end of year overview 2013.
Lesson learnt: The dividend payment never increased the valuation of the market on Coba. I expected that to have been the case. European banks very much including the German banks were again heavily hit during 2016 which made them drop even further down.

ABF, a British agricultural and retail company

Company: Associated British Foods
Shares: 177
Invested: 3849 €
Value: 5869 € (+52%)
Dividends: 165 €
Generated value: 6002 € (+56%)


Bought: 2012
Reason for investment: See previous end of year overview 2013.
Lesson learnt: I bought ABF due to Primark and the entire investment is resting on the shoulders of Primark. I did however at some point hope that their sugar part would once again start to bring in some earnings but that have yet to happen. Over time I have started to hope that Primark would be split off but as long as sugar is not doing well that will for sure not happen and I get more and more uncertain if it ever will. Last year ABF was up over 200% but back then they were up around 50 € per share and additionally I have bought more shares which has pushed down things.

Intel, an American processor producer

Company: Intel
Shares: 135
Invested: 2618 €
Value: 4664 € (+78%)
Dividends: 334 €
Generated value: 4982 € (+90%)


Bought: 2013
Reason for investment: See previous end of year overview 2013.
Lesson learnt: It is ok to water a blooming flower when it makes temporary drops even though the overall %-age plus gets halved. 

Kernel a Ukrainian agricultural and logistics company

Company: Kernel
Shares: 170
Invested: 1494 €
Value: 2443 € (+63%)
Dividends: 160 €
Generated value: 2560 € (+71%)
Sold shares: 380

Invested value upon divestment 2015: 3450 €
Generated value upon divestment: 4392 € (+27%)
Bought: 2013
Reason for investment: See previous end of year overview 2013.
Reason for divestment: I started to be very uncomfortable with having such a large investment in a company in Ukraine. Lesson learnt: In some cases it can turn out favourable to keep pushing more money into the investment because without doing that in Kernel I would not have been able to sell part of my holding with a nice profit. However... looking back... should I have done that? Should I as a small time amateur investor push in around 5000 € into an Ukrainian company in the middle of a war? This investment might just as well have gone the direction of Asian Bamboo and it still can because I still have shares left but I have protected myself for the future by decreasing my holding significantly. I am now less worried about this investment and I will leave it as it is.

Enel, an Italian energy company

Company: Enel
Shares: 450
Invested: 1077 €
Value: 1836 € (+71%)
Dividends: 194 €
Generated value: 2022 € (+88%)


Bought: 2013
Reason for investment: See previous end of year overview 2013.
Lesson learnt: Last year I had as lesson learnt that "When a company that stopped paying dividend decides to start again then the share price is also going back up again." This year I have already been forced to remove that lesson learnt because of Coba so well... share price can or it can not improve when a company announces dividend payments. Oh, and I also find it a pity that this investment is so small. There has been many moments when I have thought about increasing my holdings but it simply never seem to happen. I can only keep repeating myself of wanting to buy more but I never get around to doing so and now the likelihood will be even less.

K+S, a German potash and salt miner

Company: K+S
Shares: 240
Invested: 5196 €
Value: 5270 € (+1%)
Dividends: 451 €
Generated value: 5682 € (+9%)


Bought: 2013
Reason for investment: See previous end of year overview 2013.
Lesson learnt: When there is a dramatic share price increase due to an overtake offer then use that and sell. Do not be greedy and attempt to squeeze out that final cent. Be grateful and sell. If the deal will not happen then the share price will almost certainly drop down again which means one can step in again into a company that ones knows fairly well. Since that drop the share price have still not recovered and the company trying to buy K+S entered into a merger with another company meaning this kind of offer will not happen again. Looking back it was a big failure NOT to sell and I start to build up a large sequence of moments when I should have sold but did not. I must get better at selling shares WHEN they are fully priced.

DBAG, a German investment company

Company: Deutsche Beteiligungs AG
Shares: 100
Invested: 2014 €
Value: 3142 € (+56%)
Dividends: 360 €
Generated value: 3486 € (+73%)


Bought: 2013
Reason for investment: See previous end of year overview 2013.
Lesson learnt: From last year was "When management announces an increased dividend payment the share price seems to increase by more than what it should, just as the inverse seems to happen when dividends are cut." Besides form previous remarks regarding dividend payment this year we have seen the other half of that statement. Investors seemed to want to get 2 € again which we only got due to an excellent exit in an investment and this year we therefore go back more normal payments and that caused share price movements. DBAG are in my eyes a long, long terms investment that I stepped into at a very good moment.


Cez, a Czech energy company

Company: Cez
Shares: 100
Invested: 2142 €
Value: 1543 € (-28%)
Dividends: 434 €
Generated value: 1961 € (-8%)


Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: Management seems to cooperate with less honest people which is a chock to me. It is completely unacceptable that they step away from an investment and allow some gangsters to by the assets from Vattenfall. Unacceptable.

IBM, an American internet service giant

Company: IBM
Shares: 25
Invested: 3274 €
Value: 3973 € (+21%)
Dividends: 224 €
Generated value: 4173 € (+27%)


Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: It does indeed take a long time to re-shape an entire company and to prepare for the coming decades. I would not say that I expected it to be faster but I can honestly say that I had no feeling at all regarding the time it would and will take until this is finished. I start to hear about the usage of Watson in hospital environments. Will doctors be replaced?

Fugro, a Dutch geotech company

Company: Fugro
Shares: 120
Invested: 2166 €
Value: 1754 € (-19%)
Dividends: 0 €
Generated value: 1739 € (-20%)


Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: When there is an unmotivated share price increase due to dramatic decisions from the management that I did not agree with then I should also have sold my shares. I must become better at selling my holdings when I do not appreciate what the managers decide to do. If one looks at the Lesson learnt for BP and the questions I ask there then the management of Fugro by the look of it did not what so ever see the drop in oil price coming and they were completely caught sleeping in bed. Does that say a lot of the management or does that tell that even the people in the business were not able to see what would happen in the future? And if they can not? How will I be able to see such things? The oil price have started to recover slightly but this has still not reached the service companies and I have no clue when but I assume that it will because otherwise this investment was even worse then what it already has been for me.

Tessenderlo, a Belgian chemical company

Company: Tessenderlo
Shares: 90
Invested: 2080 €
Value: 2983 € (+43%)
Dividends: 69 € (from sale of offered rights)
Generated value: 3022 € (+45%)


Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: A turn around can go very quickly with the right managers and luck should of course not be forgotten. Almost every chemical company are profiting from the decreased oil prices. Tessenderlo was on the way to merge, due to the majority owner however it never happened which I also do not have a clear understanding for because he could have pulled it off.

Eniro, a Swedish search engine company

Company: Eniro
Shares: 850
Invested: 1035 €
Value: 17 € (-98%)
Dividends: 75 € (sale of rights offerings)
Generated value: 77 € (-93%)


Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: A company that starts to write-down "assets", intangible/tangible or goodwill for that matter well... there does not have to be an end to that as long as there is still a value in the books. So just because a company took 1 billion in write-offs does not mean that they will not do the same the coming year. They can and if they feel like it they obviously also will. The problem in my eyes goes back to accounting and that companies are allowed to carry too many skeletons in their coffers before something is done. This is my second extremely bad investment and I will keep it for as long as I can to make sure that I never forget Asian Bamboo and that I never forget Eniro.

BASF, a German chemical company

Company: BASF
Shares: 47
Invested: 3013 €
Value: 4044 € (+34%)
Dividends: 223 €
Generated value: 4251 € (+41%)


Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: Managers every now and then consider that they should give themselves (and the other employees) bonuses because the company celebrate 150 years. Are they the reason for those 150 years? No, they are not. A nice dinner is fine for celebration purposes for all employees but excessive bonus payments are NOT fine. BASF oil business is still doing poorly and what is a bit annoying to me is that chemicals are doing bad. They should do excellent which makes me think that they are paying over prices to their oil business to keep things floating.

Talanx, a German insurance company

Company: Talanx
Shares: 80
Invested: 2109 €
Value: 2547 € (+21%)
Dividends: 204 €
Generated value: 2735 € (+30%)


Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: As of yet nothing.

Adidas, a Germany sports and shoes company

Company: Adidas
Shares: 35
Invested: 1978 €
Value: 5103 € (+158%)
Dividends: 109 €
Generated value: 5204 € (+163%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Turn arounds can go very fast. Today Adidas is fairly valued and I keep asking myself... is this a company for life or should I sell and take the profit? I should have sold it off in 2016 when the value was up around 5600 € because it was then highly over valued. Today it is still overvalued which means that I will wait a bit. Still here I come back to that I must become better at selling. Adidas should today no longer have been in my stock portfolio.

RWE, a Germany energy producer

Company: RWE
Shares: 330
Invested: 4581 €
Value: 3755 € (-18%)
Dividends: 85 €
Generated value: 3817 € (-17%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Well... not a new lesson but you can never stop repeating it when the situation keeps appearing. You can never catch a falling dagger. You can not. I stepped in the first time too early but since one can not know then it also does not matter one just have to step in and accept that it can drop 50% more and if it does AND you have no fears regarding the company then buy more. RWE is now also divided into a green and a dirty company. RWE was however not as generous as E.On. were and I still do not have any individual shares in Innogy.

Avtovaz, a Russian car producer

Company: Avtovaz
Shares: 1800
Invested: 2142 €
Value: 1258 € (-41%)
Dividends: 0 €
Generated value: 1240 € (-42%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Just because an excellent manager takes over a company does not mean that it will automatically and quickly have excellent results. I have however not lost any faith in Bo Inge Andersson and I will bid my time. Bo Inge Andersson was kicked out during spring 2016. I decided in the end to keep Avtovaz because I want to have yet another foot inside Russia besides form the ETF fund that I have.


Gerry Weber, a German retail chain

Company: Gerry Weber
Shares: 50
Invested: 1039 €
Value: 571 € (-45%)
Dividends: 20 €
Generated value: 583 € (-44%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Managers are not better investors than what I am. They are probably even more emotional regarding the company they work for as they also should be. That they keep pumping shares does not mean that it is a good investment. Even worse... I visited the stores and almost never saw any customers. I also did not like their store concept and how they were working with their customers. So this was once again one of those poor investment decisions which is why I have not pumped in any more money into it... just like in Eniro. I still hope for the current CEO to be kicked out and that the, obviously, more skilled CEO from Hallhuber takes over the business.

TJX, an American off-price retailer

Company: TJX
Shares: 32
Invested: 2009 €
Value: 2351 € (+17%)
Dividends: 41 €
Generated value: 2384 € (+19%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Nothing as of yet.

VW, a German automobile producer

Company: VW
Shares: 12
Invested: 2003 €
Value: 1550 € (-23%)
Dividends: 2 €
Generated value: 1544 € (-23%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: I bought VW one month too yearly. What one considers to be a stable company can change over night which I find interesting. I was on my way to say that it scares me but that would be the wrong word. It would have been an excellent moment to step in when they dropped below 100 € and obviously those kind of things happen with also large companies... one just have to hang in there and wait. What is strange with VW is that... if I would not have had shares previously then I would most likely have stepped in when this happened. Now that I did have shares I decided not to buy more. Very strange. I need to work on that.

Deere, an American machine company

Company: Deere
Shares: 30
Invested: 2097 €
Value: 2875 € (+37%)
Dividends: 65 €
Generated value: 2931 € (+40%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Nothing as of yet.


Fast Retailing, a Japanese retail company

Company: Fast Retailing
Shares: 6
Invested: 2140 €
Value: 2068 € (-3%)
Dividends: 17 €
Generated value: 2078 € (-3%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Nothing as of yet.




Company: Unknown
Shares: Unknown
Invested: 2504 €
Value: 2808 € (+12%)
Dividends: 0 €
Generated value: 2776 € (+11%)


Bought: 2016

Reason for investment: Since I started to work for the company then I must also own shares in that company if it is possible. If I would not own shares then I should directly start questioning why do I work in the company. It is a must.
Lesson learnt: Nothing as of yet.




Company: Uniper
Shares: 40
Invested: 400 € (it was taken from my E.On investment)
Value: 516 € (+29%)
Dividends: 0 €
Generated value: 516 € (+29%)


Bought: 2016


Reason for investment: It was handed out to me from E.On as an attempt for them to create a green company... which failed. Uniper is however the dirty part of that equation.. still... with out the nuclear power plants.
Lesson learnt: Nothing as of yet.



Conclusion: 2016 was a, investment wise, bad year for me. I was not even close to pushing in the amount of money that I would have liked to which comes from me and my wife moving to the UK and her having difficulties to find a job which meant we have only had one salary to live on. We have still managed to save pretty ok with 500 GBP going directly from my salary into a company pension scheme. With us saving 400 GBP each month for a potential house + me being able to save almost 1000 GBP each month for buying stocks. 
Since I almost made no new investments I also managed to live up the the demand of NOT having 50% of my new investments crashing on me so that was great. Still as I suspected Energy and Banks did not recover during 2016 but I did not even imagine that they would crash down even further from the state that they were in back then. I decreased the %-age gain in two of my investments by the decision to water the blooming flowers during temporary dips such as for: Intel and ABF. I also tried to decrease my weight average price for instance by buying more: Commerzbank, BP, IBM, BASF and K+S. Of these BP, IBM and BASF have turned out in my favour. Commerzbank dropped even more and K+S is pretty much unchanged. I hope that 2017 will be the year of the energy companies but that is just wishful thinking. My oldest investments will soon celebrate five years with me and I hope that I am not married to them.

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