12 hours ago6 min read

The Portfolio: 24Q4

This issue of The Portfolio is a summary of my financial situation for the 2024 Q4. The other posts (previous quarters) can be found at links at the bottom of this webpage, under Continue Reading. You can also download the full post in PDF below.

“Post” Thoughts: The Recap

After being able to sit with the report and ruminating on all the information and with my perspective, here are my thoughts; both political parties practice trickle-down economics via crony capitalism to set low living standards for the majority (working class). In recent years, the governing class has publicly displayed who & what is worth investing in; and unfortunately, that's not ending homelessness, hunger, war, or poverty. In the portfolio, gains were redistributed to other stocks, changing pretty much every category. Investing-wise, the Top 10 Holdings focus is to get more offensive and prepare for the possible downturn through dividend income, while taking advantage of the greed and market manipulation going on. Due to the reallocation, the Top Holding changed and total decreased. The Watchlist changed, and Brookfield Wealth replaced Brookfield Corporation due to our increasing interest in insurance. When looking at The Top Performers, I see Japanese insurance/ finance sector steady rise, global companies are also benefiting (probably through M&A), and the US financial sector (specifically money markets), fundraising to combat continuing instability. The Worst Performers supports the news that consumers are hurting (especially lower income earners) in every category; consumer goods, leisure/ entertainment, banking, and real estate. Dividend Payout resulted in ⅔ being worst performer and ⅓ being a top performer. We find that, the market always backs finance at the end of the day, consumer staples show the consumer struggling, but continue to persist the raising “temperatures”. Investment Strategy: for those of us limited to only USD, is to bet on essentials and state-ordered goods & services. Treasury bills, utilities, healthcare, insurance, and large financial institutions are the best options. That being said, the strategy may not be enough to counter the risks of USD exodus, dedollarization, and multipolarity. When nations divest in the US, corporations invest in our adversaries, and consumers struggling to pay essential, yet alone spend the country out of a deficit

The Portfolio

Buy, Sell, Watch

The portfolio is still positioned to capture possible gains discussed in Recap section, with any modifications being further covered in the Investment Strategy section. We continue to double down on positions.

24Q3: I sold my position in UBER & RTX, and sold shares in AAPL, MSFT, SCCO, SPGM, JPM, AGM, MRK, AXP, ALLY, ADDYY, USDC and added HMC, MUFG, USDC, PIN, DHT, EMLC, KIE, VICI, LAZ, BNT, DG, GFL, WMMVY, TMUS, DIS, USB, FLTR, OHI, ETH, SPXS, & HKXCY. Stocks on my watchlist: ALLY, BAM, BNT, CP, IBN, PIN, AXP, KIE, HKXCY, CMCSA, TMUS, & JPM.

24Q4: I sold shares in ETH, USDC, AGM, BAM, UL, GM, MRK, FLTR, AFL, & ALLY and added FLTR, DTEGY, MUFG, USDC, T, EMLC, TMUS, STWD, BNT, BAM, WMMVY, TGT, ACI, HMC, DG, KBR, CP, ETH, SPXS, DLTR, DHT, WBD, DIS, USB, IWM, & PIN. Stocks on my watchlist: BNT, BAM, PIN, USB, KIE, HKXCY, CMCSA, DG, & LAZ.

Top 10 Allstars

This section discusses/reports on the top holdings of the portfolio. Reallocating has lowered the total overall total of the Top 10. Verizon (VZ) continue to place of multiple lists: Top 10, Top Dividend Payer, and a Worst Performer. T-Mobile has entered the list via proxy Deutsche Telekom (DTEGY). Robinhood (HOOD) went from living on the Worst Performers list and has completely changed placement in a couple months.

24Q3: TOLZ, VZ, UL, ALLY, CP, LAZ, BN, USB, KO, & AFL.

24Q4: TOLZ, VZ, BN, USB, DIS, LAZ, DTEGY, ALLY, HOOD, & CP

Small Bets

This section is composed of the smallest positions.

Unchanged.

24Q3 Tickers: AXP, SCCO, SPXS & KBWD

24Q4 Tickers: SCCO, AXP, MRK, & SPXS

Top Performers

This section is composed of the top performing positions. Whales are working overtime to keep the economy afloat. The portfolio is overweight in financials, with that being said, the best performing sectors are asset managers, finance, and insurance.

24Q3 Tickers: AFL, XLU, & OHI

24Q4 Tickers: BAM, LAZ, & AFL

Worst Performers

This list is composed of the worst performing positions. Consumer staples and commercial real estate has continued to be punished for high rates and struggling consumers. Dollar General (DG) has been beaten bad, leading negative reading for entire sector in the portfolio. Trade uncertainty and labor strikes seems to be affecting Canadian Pacific Kansas City Limited (CP), still confused by Barrick’s (GOLD) response.

24Q3 Tickers: HOOD, DG, SOFI, DIS, & WBD.

24Q4 Tickers: GOLD, DG, VZ, CMCSA, & CP.

Dividend Payout

Top Dividend Payers this quarter were STWD, VZ, & PIN. This quarter's dividend total: $211.33, (previous quarter: $141.24). Oct. $42.11, Nov. $52.68, & Dec. $116.54. Total of 64 payments made. Dividend Calendar displays the tickers, total payouts, and amount of each payout from 2021 to current.

Chart 2 (right) is an overlay chart displaying each payment by month. Chart 3 is an overlay chart that displays all dividend payouts, with the lowest & highest years in bar form. Chart 4 is a line chart starting from 2021 to current.

SURVIVING A ROUND OF CAPITALISM:

CURRENCY. FINANCE. CONTROL.

The Fed's higher for longer agenda may have resulted in an increase in individual bankruptcies filed under Chapter 13 and Chapter 7 of 9% and 19%, respectively; and higher mortgage rates that sent the prices of these securities (RMBS) plummeting, throwing banks deeper into the red. Snowballing into American corporate bonds and Treasuries. Unfortunately, debt markets aren't favorable for any more US debt. China has been dumping U.S. treasuries, reducing its exposure from over $1,300 billion to under $800 billion, with the steepest decline between 2021 and 2023. This leaves Japan, a natural U.S. ally, as the largest holder of these papers[...]

[Download PDF for full report]

Investment Strategy

The strategy going forward is to take advantage of all discussed in the Outlook section, while understanding the Trump Card Effect. Even though another Trump Presidency is expected to be beneficial for “business,” the potential volatility and retaliation from additional tariffs could ultimately harm the everyday person. Last quarter’s strategy to invest in growing markets abroad, is now at risk due to tariff expectations.

Regarding each sector in the portfolio: [Download PDF for full report]

DISCLAIMER

This memorandum expresses the views of the author as of the date indicated and such views are subject to change without notice. Moralcap (or West Elephant Solutions) has no duty or obligation to update the information contained herein.

Further, Moralcap makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss.

This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources.

West Elephant Solutions (“W.E.S.”) believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based.

This memorandum, including the information contained herein, may not be copied, reproduced, republished, or posted in whole or in part, in any form without the prior written consent of West Elephant Solutions.