Friday, December 29, 2017

End of year overview 2017

End of year overview 2017


For the fifth 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 was once again a year focused on work and 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. Only three new companies entered the portfolio: Hugo Boss, Nike and H&M while seven companies completely left the portfolio: Kernel, Adidas, Eniro, Gerry Weber, Enel, Uniper and Deere. 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 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: 3624 € (-20%)
Dividends: 932 €
Generated value: 4530 € (0%)
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. Nothing new during 2017.

DB, a German bank

Company: Deutsche Bank
Shares: 420
Invested: 9484 €
Value: 6665 € (-30%)
Dividends: 631 €
Generated value: 7239 € (-24%)
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. Nothing new during 2017.



BP, a British oil giant

Company: British Petroleum
Shares: 1220
Invested: 6280 €
Value: 7174 € (+14%)
Dividends: 1138 €
Generated value: 8246 (+31%)


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? 
Nothing new during 2017.

Coba, a German bank

Company: Commerzbank
Shares: 719
Invested: 7650 €
Value: 8991 € (18%)
Dividends: 759 € (including sale of pre-emptive rights by mistake)
Generated value: 9695 € (27%)


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. 
Nothing new during 2017.

ABF, a British agricultural and retail company

Company: Associated British Foods
Shares: 177
Invested: 3849 €
Value: 5620 € (+46%)
Dividends: 242 €
Generated value: 5829 € (+51%)


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. 
Nothing new during 2017.

Intel, an American processor producer

Company: Intel
Shares: 135
Invested: 2618 €
Value: 5214 € (+99%)
Dividends: 461 €
Generated value: 5659 € (+116%)


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. It starts to be time to sell this flower though...

Kernel a Ukrainian agricultural and logistics company

Company: Kernel
Sold Shares: 550
Total Invested: 4739 €
Sold Value: 7257 € (+53%)
Dividends: 160 €
Generated value: 7417 € (+53%)


Bought: 2013
Sold: 2017
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 and they started to fool around with the books. 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. In 2017 I decided to divest the rest of the shares because they started to play around with the value of their growing crops as well as hiring a person for hedging.

Enel, an Italian energy company

Company: Enel
Sold Shares: 450
Invested: 1077 €
Sold Value: 2297 € (+113%)
Dividends: 275 €
Generated value: 2572 € (+139%)


Bought: 2013
Sold: 2017
Reason for investment: See previous end of year overview 2013.

Reason for divestment: High P/E valuation with historical normal to high earnings.
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. Share prices can and will always continue to climb after you sell them.

K+S, a German potash and salt miner

Company: K+S
Shares: 240
Invested: 5196 €
Value: 4980 € (-4%)
Dividends: 523 €
Generated value: 5463 € (+5%)


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.

DBAG, a German investment company

Company: Deutsche Beteiligungs AG
Shares: 100
Invested: 2014 €
Value: 4704 € (+134%)
Dividends: 480 €
Generated value: 5168 € (+157%)


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. Looking back at Germany DBAG is today in a perfect situation. Many ambitious after war children started up companies. They are now retiring and for many reasons they might not want to hand over the company to their children and instead cash in the money to hand over that instead. In all those cases DBAG is perfect. I have met many of these old German CEOs running mid-size companies with highly specialised products and many of them were concerned with the succession of their companies.



Cez, a Czech energy company

Company: Cez
Shares: 100
Invested: 2142 €
Value: 1970 € (-8%)
Dividends: 559 €
Generated value: 2513 € (+17%)


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. Give me a cold winter and a bit better share price and I am out of this investment in the blink of an eye.

IBM, an American internet service giant

Company: IBM
Shares: 25
Invested: 3274 €
Value: 3230 € (-1%)
Dividends: 353 €
Generated value: 3560 € (+9%)


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.

Fugro, a Dutch geotech company

Company: Fugro
Shares: 120
Invested: 2166 €
Value: 1561 € (-28%)
Dividends: 0 €
Generated value: 1545 € (-29%)


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. Another year with pretty stable oil price but still Fugro has not managed to make sales to the oil and gas companies. Very disturbing.

Tessenderlo, a Belgian chemical company

Company: Tessenderlo
Shares: 90
Invested: 2080 €
Value: 3423 € (+65%)
Dividends: 69 € (from sale of offered rights)
Generated value: 3462 € (+66%)


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.

Eniro, a Swedish search engine company

Company: Eniro
Sold Shares: 850
Invested: 1035 €
Value: 0 € (-100%)
Dividends: 75 € (sale of rights offerings)
Generated value: 75 € (-93%)


Bought: 2014
Sold: 2017
Reason for investment: See previous end of year overview 2014.

Reason for divestment: CEO crooks, higher goodwill than assets, dying organisation with a desperate sales force and key employees having left.
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. Sold but not forgotten.

BASF, a German chemical company

Company: BASF
Shares: 47
Invested: 3013 €
Value: 4312 € (+43%)
Dividends: 364 €
Generated value: 4660 € (+55%)


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. BASF have started to change their business model slightly and will now focus more on "fashion" products with high margins. I have still not decided what I think of this since it will lead to larger revenue and earnings fluctuations and many shareholders might not like that which means that there can potentially be overreactions occurring in the future.

Talanx, a German insurance company

Company: Talanx
Shares: 80
Invested: 2109 €
Value: 2726 € (+29%)
Dividends: 312 €
Generated value: 3022 € (+43%)


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
Sold Shares: 35
Invested: 1978 €
Sold Value: 5379 € (+172%)
Dividends: 109 €
Generated value: 5488 € (+177%)


Bought: 2015
Sold: 2017
Reason for investment: See previous end of year overview 2015.

Reason for divestment: I found Adidas to have reached full valuation and therefore it was time to leave the company.
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. The share price will always continue to increase after one decides to sell a share. It is as impossible to hit the mountain top as it is to hit the final wag of the dagger that fell. I need to learn to accept this and not be too hard on myself when I sell a company "too" early.

RWE, a Germany energy producer

Company: RWE
Shares: 330
Invested: 4581 €
Value: 5610 € (+22%)
Dividends: 85 €
Generated value: 5695 € (+24%)


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. When the share price was up at 22 € I was seriously considering to sell of my shares. Of course I ended up sucking on my thumb for too long and it is now down at 17 €. I must however admit that I have set a much higher price of RWE as sales indicator so I should therefore not have sold them at 22 € but in some cases one should just step away and this is one of those.

Avtovaz, a Russian car producer

Company: Avtovaz
Shares: 1800
Invested: 2142 €
Value: 1503 € (-30%)
Dividends: 0 €
Generated value: 1485 € (-31%)


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. They have started to improve a little but the costs for production compared to the sales prices are not yet at an acceptable level.


Gerry Weber, a German retail chain

Company: Gerry Weber
Sold Shares: 50
Invested: 1039 €
Sold Value: 509 € (-51%)
Dividends: 20 €
Generated value: 529 € (-49%)


Bought: 2015
Sold: 2017
Reason for investment: See previous end of year overview 2015.

Reason for divestment: No customers, useless CEO and my mother that are the perfect customer for Gerry Weber found everything in the shop to be horrible.
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. I could not wait around for the son of the largest shareholder to be fired and therefore the divestment was made.

TJX, an American off-price retailer

Company: TJX
Shares: 32
Invested: 2009 €
Value: 2058 € (+2%)
Dividends: 75 €
Generated value: 2115 € (+5%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: Hmmm... This store is strange. I love the concept of what they are doing and they very often have plenty of customers in the shops but something is amiss and I cannot tell what it is but the share price is definitely being punished.

VW, a German automobile producer

Company: VW
Shares: 12
Invested: 2003 €
Value: 1997 € (0%)
Dividends: 27 €
Generated value: 2016 € (+1%)


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. 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.

Deere, an American machine company

Company: Deere
Sold Shares: 30
Invested: 2097 €
Sold Value: 3810 € (+82%)
Dividends: 128 €
Generated value: 3938 € (+88%)


Bought: 2015
Sold: 2017
Reason for investment: See previous end of year overview 2015.

Reason for divestment: Deere started to be traded at full valuation based on future earnings and therefore it was time to leave the company. If those earnings will not materialise then it will take a serious nose dive.
Lesson learnt: Same as with Adidas that the share price can happily keep climbing higher and higher after one have sold them off.


Fast Retailing, a Japanese retail company

Company: Fast Retailing
Shares: 6
Invested: 2140 €
Value: 1953 € (-9%)
Dividends: 34 €
Generated value: 1979 € (-8%)


Bought: 2015
Reason for investment: See previous end of year overview 2015.
Lesson learnt: When the home market of a company is not doing very well then the share price / company is being punished. On top of that to see one or two stores doing very good sales with plenty of customers without seeing a selection of the stores in the home market is a treasures reason for investing.

Home Sweet Home


Company: Unknown
Shares: Unknown
Invested: 2504 €
Value: 3336 € (+33%)
Dividends: 0 €
Generated value: 3304 € (+32%)


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: It is very difficult to making a sale of shares when one is considered to be an insider. In some periods one is not allowed to make any trades and in others it does not look good if there are inside trades occurring. I will therefore not invest any more and the best is when one is not considered to be an insider for owning shares in the company that one works for.



Logo of Uniper 2017

Company: Uniper
Sold Shares: 40
Invested: 400 € (it was removed from my E.On investment)
Sold Value: 875 € (+119%)
Dividends: 22 €
Generated value: 897 € (+124%)

Bought: 2016
Sold: 2017
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.

Reason for divestment: There has been takeover offers given from Fortum. E.On seems to have accepted to sell their shares. I find the earnings to be "blown up" due to non normal earnings and on top of it I was burnt with the K+S situation.
Lesson learnt: As with the other. After one sell a company the share price have a tendency to continue even further up.



Logo of Hugo Boss 2017

Company: Hugo Boss
Shares: 35
Invested: 2136 €
Value: 2483 € (+16%)
Dividends: 91 €
Generated value: 2565 € (+20%)


Bought: 2017
Reason for investment: Good design, the management changes will have a temporary financial benefit that I expect to ride on before selling this share.
Lesson learnt: The share price was up sniffing on what I wanted to sell it for and I was very close to do so but in the end I did once again the thumb sucking and did not push the button. I need to improve that and I need to take home earnings that happen far to quickly for being "normal" and "healthy".


Logo of Nike 2017


Company: Nike
Shares: 40
Invested: 2018 €
Value: 2104 € (+4%)
Dividends: 19 €
Generated value: 2115 € (+5%)


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: Nothing as of yet.

Logo of H&M 2017

Company: H&M
Shares: 250
Invested: 4949 €
Value: 4328 € (-13%)
Dividends: 0 €
Generated value: 4315 € (-13%)


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. If I would have had money I would probably have bought a bit more at this moment.


Conclusion: 2017 was yet another bad year for me.  Only at the very end of the year did I push in a bit of money into the stock portfolio which leads to that those monies have not had the chance to start working to generate more. I must improve this during 2018 so that I will get a better investment flow which might just as well be buying index funds each month. The energy companies and banks have slowly, slowly started to recover and I hope that this will continue much stronger during 2018. I also need to become better and finding pushed down countries and index funds as well as pushed down sectors. I am still annoyed over that I did not invest in the mining industry back in 2016.

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