Thursday 31 December 2020

End of year overview 2020


Summary of 2020

This is the sixth end of year overview of my holdings so a long, long article. Two years were left out 2018 and 2019. This of course also means that several companies have left the portfolio: Hugo Boss, Fast Retailing, CEZ, Fugro, ETF Austria, ETF Oil, ETF Greece, Avtovaz, ETF Russia. Some companies have also entered the portfolio such as: Ratos, ETF Germany, ETF Mix, Skanska, Stock X and Stock Y. Investments were also made in already existing companies. When it comes to calculations then to me the generated value is (share price * shares + dividend - trading fees).

For the previous report please click on end of year overview 2017, and the one before that please click on end of year overview 2016 and for the one before then 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 €
Value: 3652 € (-19%)
Dividends: 1408 €
Generated value: 5034 € (11% on yearly basis 1.3%)
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. Uniper was split off which gave me some extra money and then they swapped assets with RWE which seems to have turned out better for RWE in terms of share price.

DB, a German bank

Company: Deutsche Bank
Shares: 420
Invested: 9484 €
Value: 3809 € (-60%)
Dividends: 723 €
Generated value: 4475 € (-53% on yearly basis -6%)
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 and then again in the following years. 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. The new management I have currently no beef with. They tried to make one big German bank with Commerzbank which failed.

BP, a British oil giant

Company: British Petroleum
Shares: 800
Invested: 4073 €
Value: 2344 € (-42%)
Dividends: 1923 €
Generated value: 4191 (+3% on yearly basis 0.3%)

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. In 2020 BP was hit by Covid-19 as everyone else and reduced petrol consumption for cars but on top of it significant reduction in oil prices. The prices started to increase and the share prices for oil companies increased slightly only to realise all countries were sitting at full storage capacity leading to yet another drop.

Coba, a German bank

Company: Commerzbank
Shares: 719
Invested: 7650 €
Value: 3774 € (-51%)
Dividends: 905 € (including sale of pre-emptive rights by mistake)
Generated value: 4624 € (-40% on yearly basis -5%)

Bought: 2012
Reason for investment: See previous end of year overview 2013.
Lesson learnt: Coba dropped down yet another level just like DB. Zero confidence in Germany for the German banks and German investors seem to have longer memories than many other nations. They are trying to push online banking by the full take over of ComDirect which personally I used when I lived in Germany and it was working very well. I'm however not certain if it will be the wind of change that Commerzbank desires or if Commerzbank is not so set in their ways that they will not be able to change. Either way they are at least trying to get their foot in there. DB today has an app with which I cannot even make trades. That is how far they have managed to get...

ABF, a British agricultural and retail company

Company: Associated British Foods
Shares: 200
Invested: 3885 €
Value: 5120 € (+32%)
Dividends: 404 €
Generated value: 5507 € (+42% on yearly basis 5%)

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. In 2015 ABF was up over 200% (and I should have sold them) but back then they were up around 50 € per share and additionally I have bought more shares which has pushed down things. 
Their flagship Primark was hit hard by Covid-19 which has been reflected in the share price.

Intel, an American processor producer

Company: Intel
Shares: 135
Invested: 2618 €
Value: 5191 € (+98%)
Dividends: 835 €
Generated value: 6010 € (+130% on yearly basis 17%)

Bought: 2013
Reason for investment: See previous end of year overview 2013.
Lesson learnt: They gain up up sniffing on +170% early on in 2020 only to go down again. There has been plenty of bad news for Intel. Plenty of companies are today making better processors and Intel seems to have dropped out of the race. It feels a bit like how it was when I invested in them back in 2013. I hope that they will bounce back from this but as of yet the yearly value increase has been very favourable for me.

K+S, a German potash and salt miner

Company: K+S
Shares: 240
Invested: 5196 €
Value: 1846 € (-65%)
Dividends: 676 €
Generated value: 2483 € (-52% on yearly basis -7%)

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. I cannot even start to explain how annoyed I am that I did not sell them when the offer was there. Very annoyed. Their saviour, the new plant in Canada, has not turned out to do so well as the management proclaimed. 

DBAG, a German investment company

Company: Deutsche Beteiligungs AG
Shares: 155
Invested: 3989 €
Value: 5255 € (+32%)
Dividends: 1077 €
Generated value: 6307 € (+58% on yearly basis 8%)

Bought: 2013
Reason for investment: See previous end of year overview 2013.
Lesson learnt: I still consider this to be a long term investment with a very sound investment approach and structure. They have given me 8% per year which is in my opinion fully acceptable.

IBM, an American internet service giant

Company: IBM
Shares: 25
Invested: 3274 €
Value: 2556 € (-22%)
Dividends: 700 €
Generated value: 3232 € (-1% on yearly basis -0.2%)

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? Mr. Buffett has left the building so let us hope that we will see a similar effect as we saw with Deere after Mr. Buffett left there. I doubt as long as IBM keeps generating money and have a good cash flow then I will remain as a shareholder.

Tessenderlo, a Belgian chemical company

Company: Tessenderlo
Shares: 170
Invested: 4297 €
Value: 5695 € (+33%)
Dividends: 69 € (from sale of offered rights)
Generated value: 5726 € (+33% on yearly basis 5%)

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. The initial changes seems to have taken effect but now we need to start seeing some growth. He keeps taking over business that seems not to have anything to do with the core business. I do not mind - I trust the man in charge.

BASF, a German chemical company

Company: BASF
Shares: 140
Invested: 6880 €
Value: 9125 € (+33%)
Dividends: 1302 €
Generated value: 10392 € (+51% on yearly basis 8%)

Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: Their "new" CEO is finally once again a chemist and not a MBA and he is very much for sustainability and changing BASF. All chemical plants producing plastics are currently running at full production capacity to be able to supply the demand. The world has woken up - everyone have cleared their warehouses and are now caught out due to this. Many companies have to claim force majeure due to not being able to fulfil their supply commitments. I hope that BASF is not one of them but I am certain that they will do very well in 2021. 

Talanx, a German insurance company

Company: Talanx
Shares: 80
Invested: 2109 €
Value: 2546 € (+21%)
Dividends: 660 €
Generated value: 3190 € (+51% on yearly basis 8%)

Bought: 2014
Reason for investment: See previous end of year overview 2014.
Lesson learnt: Boring insurance company owning large part of Hannover Re. They've been hit more than normal on claims this year and their invested float has not brought back has much as I am sure they would have liked. Same situation as I am with my dividends.

RWE, a Germany energy producer

Company: RWE
Shares: 330
Invested: 4581 €
Value: 11540 € (+152%)
Dividends: 1075 €
Generated value: 12591 € (+175% on yearly basis 30%)

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 has done very well and it has turned out to be an excellent investment both in terms of dividend payments as well for increased share price. They sold 10% more shares to institutional investors. I do not like when the same offer is not given to everyone.

TJX, an American off-price retailer

Company: TJX
Shares: 32
Invested: 2009 €
Value: 3558 € (+77%)
Dividends: 157 €
Generated value: 3708 € (+85% on yearly basis 16%)

Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: As all retail they have been hit this year by share price reduction. Should however provide them with plenty of stock since I doubt that the fashion houses will be able to sell the designs of 2020 in 2021.

VW, a German automobile producer

Company: VW
Shares: 12
Invested: 2003 €
Value: 1836 € (-8%)
Dividends: 191 €
Generated value: 2020 € (+1% on yearly basis +0.2%)

Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: I bought VW one month too yearly (just before diesel-gate). 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. I also need to have more cash available to be able to step into not companies but industries when they dip down too much due to something silly which it was not in this case for VW that desired every punishment that they received. I watch a documentary on Netflix which just makes you shake your head at the stupidity of people. Stupid, stupid, stupid.

Fund: ETF Portugal - PSI 20
Parts: 1450
Invested: 8040 €
Value: 8077 € (+0.5%)
Dividends: 598 €
Generated value: 8629 € (+7% on yearly basis +1.5%)

Bought: 2015
Reason for investment: I'm a great believer in the Portuguese future economy.
Lesson learnt: It takes a long time for countries to recover from a situation such as PIGS. What always struck me was that they never complained a moaned about it but simply accepted the responsibility. They are a tough, football loving people that responded very differently to for instance G or even I for that matter.

Logo of Nike 2017

Company: Nike
Shares: 40
Invested: 2018 €
Value: 4669 € (+131%)
Dividends: 105 €
Generated value: 4765 € (+136% on yearly basis 35%)

Bought: 2017
Reason for investment: Adidas was highly overvalued and Nike started to be undervalued. I therefore changed the investment between the two. I was never happy with Adidas shoes that I have bought but I have recently bought a pair of Nike and as of yet I am still very happy with them.
Lesson learnt: I should have kept Adidas and added Nike to the portfolio since both companies have done very well since then. Adidas journey upwards have continued and Nike went from its deep dip to also significantly improve.

Logo of H&M 2017

Company: H&M
Shares: 603
Invested: 9893 €
Value: 10571 € (+7%)
Dividends: 832 €
Generated value: 11378 € (+15% on yearly basis 5%)

Bought: 2017
Reason for investment: The valuation started to be silly. They walking slightly behind Inditex that are being traded at a P/E of around 26 to 28 and H&M was well below 20.
Lesson learnt: As always the knife kept falling slightly further and I made my grab a bit too early. I have bought more shares which have only just started to show me some positive figures even though retail has been massively hit by Covid-19. 2021 should be a great year for H&M and their online presence should only increase further.

Company: Ratos
Shares: 1245
Invested: 3823 €
Value: 4768 € (+25%)
Dividends: 57 €
Generated value: 4825 € (+26% on yearly basis 9%)

Bought: 2018
Reason for investment: The family that started the investment company decided to grab hold of the situation again. One of them is an excellent investor.
Lesson learnt: This was another falling knife that I did not grab late enough but it has started the journey back and currently it appears to be a fairly good investment for me.

Fund: ETF Germany - DAX 30
Parts: 55
Invested: 5115 €
Value: 7283 € (+42%)
Dividends: 0 €
Generated value: 7279 € (+42% on yearly basis n/a%)

Bought: 2020
Reason for investment: Found that the Covid-19 dip on German DAX was extreme. Could pretty much have picked up any country but this felt secure and with a fee of 0.09% I found it to be good enough without spending too much time thinking about it.
Lesson learnt: When their is a general crisis situation then it is a good moment to pick up a broad index ETF. Some companies will benefit and others will perish. When the crisis happens I do not know the impact on each and every company but an index fund will balance that out.

Fund: ETF Mix - Global in USD (50%), Growth EU in EUR (30%) and FTSE 100 in GBP (20%)
Parts: n/a
Invested: 74131 €
Value: 124305 € (+68%)
Dividends: re-invested
Generated value: 124305 € (+68% on yearly basis +16%)

Bought: Monthly 2016 - 2020
Reason for investment: Highly tax beneficial company pension scheme. Push as much money as possible into it for this reason. Did not realise how beneficial it was until in autumn 2018 and had only paid in minor amounts until then but that changed significantly upon realisation. Cannot take it out until age of 57 and have therefore balanced it so that I can privately invest ~2k per month while 3.5k goes into this one each passing month.
Lesson learnt: Be faster on the ball and keep track of any tax beneficial schemes that exists to benefit from it.

Company: Skanska
Shares: 250
Invested: 4372 €
Value: 5263 € (+20%)
Dividends: 78 €
Generated value: 5322 € (+22% on yearly basis n/a%)

Bought: 2020
Reason for investment: Wanted to buy Skanska due to their international presence and their sustainability commitment. When the big UK construction company tippled over I also expected Skanska to significantly increase their market share in the UK. I'm still waiting for this to happen.
Lesson learnt: Good company and a good long term investment.

Company: Shell
Shares: 270
Invested: 3171 €
Value: 3802 € (+20%)
Dividends: 26 €
Generated value: 3818 € (+20% on yearly basis n/a%)

Bought: 2020
Reason for investment: Covid-19 and oil price pushed down all the oil companies hard. Wanted to invest in oil company which was not BP. Shell is trying to be sustainable and have come far in their conversion of non oil generated energy.
Lesson learnt: Nothing as of yet in 2020.

Company: Stock X
Shares: 1124
Invested: 3221 €
Value: 5215 € (+62%)
Dividends: 0 €
Generated value: 5215 € (+62% on yearly basis n/a%)

Bought: 2020
Reason for investment: A small pharmaceutical company with a great product.
Lesson learnt: Nothing as of yet in 2020.

Company: Stock Y
Shares: 770
Invested: 2193 €
Value: 2002 € (-9%)
Dividends: 0 €
Generated value: 2002 € (-9% on yearly basis n/a%)

Bought: 2020
Reason for investment: A small biotech investment company with a highly interesting business approach that I find to be too compelling for not investing in.
Lesson learnt: Nothing as of yet in 2020.

Conclusion: 2020 has been a good year for me. Maybe not in the return on my investments but in terms of how much money I have managed to push into the stock market each month. This has completely escalated in 2020 and I as an individual have the great fortune to save more per month than what others would dream to be able to save in a year. 2021 will very likely be an excellent year for many of us owning shares on the stock market. Please do not forget those less fortunate and try to give to charity whenever you have the chance for a cause that concerns you. Happy New Year by the way!

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