The Portfolio: 25Q1

This issue of The Portfolio is a summary of my financial situation for the 2025 Q1. 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 ruminate on all the information and with my perspective, here are my thoughts; A Trump Presidency proves to not settle concerns about economic stability, debt traps by shadow banks, or global rebalancing. Trump 2.0 will most undoubtedly be another golden age for Wall Street, particularly asset managers. Deregulation invites corporations and private equity to dominate market share and further monopolize the financial system. As expected, those entities push back on living wages, labor rights, human rights, and environmental protections, through civilian layoffs in the federal government. International relationships are uncertain. Pres. Trump has enacted tariffs on countries up to 20-50-100%, with our closest allies Mexico and Canada. Essentially, undermining the USMCA trade agreement he accomplished in his first term, after dismantling NAFTA. Multipolarity & dedollarization largely began with Trump’s tariff campaign during his first term and continued through the Biden-Harris Administration; and therefore, with expected elevated tariffs I see BRICS+ countries (& others) accelerating their agenda. Investing-wise, the Top 10 Holdings focus more on financials & alternative assets. The Watchlist changed, and Brookfield Wealth replaced Brookfield Corporation due to our increasing interest in insurance & reinsurance. When looking at The Top Performers, I see Wall Street beginning to start its Trump 2.0 Bender, asset managers and shadow banks are about to reign. The Worst Performers show all consumer centered/ focused businesses are feeling pressure. Dividend Payout resulted in 2024 coming in $1.21 less than 2023 ($644.17, and $645.38, respectfully). The year would have come in third, after 2022, if it wasn't for Invesco India ETF (PIN). Investment Strategy: Buckle up. USD exodus, dedollarization, and multipolarity, powered by tariffs, and more bought politicians.

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. I continue to add positions to the portfolio that have certain advantages I wish to explore, while collecting dividend income. Financials continue to be the largest allocation, and with the growth in the asset management sector expected.

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.

25Q1: I sold shares in HOOD, BTC, ETH, USDC, EADSY, & DGIN and added BTC, FLTR, CMCSA, LAZ, OHI, USDC, EMLC, KIE, MRK, STWD, BNT, HKXCY, DG, ETH, DLTR, IWM, & PIN. Stocks on my watchlist: BNT, BAM, PIN, USB, KIE, HKXCY, CMCSA, DG, ALLY, & LAZ.

Top 10 Allstars

This section discusses/reports on the top holdings of the portfolio. Two Brookfield companies occupy the list, Brookfield Corporation (BN) & Brookfield Wealth (BNT).

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

25Q1: TOLZ, VZ, DTEGY, BN, ALLY, BNT, USB, CP, DIS & STWD

Small Bets

This section is composed of the smallest positions.

Unchanged, besides SPXS is no longer 4th.

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

25Q1 Tickers: SCCO, AXP, & MRK

Top Performers

This section is composed of the top performing positions. The best performing sectors continue to be tech., asset managers/ finance, and telecommunication companies (mainly T-Mobile). Germany’s largest telecommunications provider in Europe, Deutsche Telekom (DTEGY) has topped the list. Germany has produced a top telecommunications conglomerate.

Currently on the DGS list: AXP, MSFT, & AFL

24Q4 Tickers: BAM, LAZ, & AFL

25Q1 Tickers: DTEGY, AFL, & XLU

Worst Performers

This list is composed of the worst performing positions. Crypto, leverage, healthcare, & media are the sectors facing losses. 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), Comcast (CMCSA) is thriving in telecommunication, but the media segment of the business is undergoing restructuring.

Currently on the PHS list: VZ, CMCSA, & DG) response.

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

25Q1 Tickers: DG, CMCSA, CP, TGT, & SOFI.

Dividend Payout

Top Dividend Payers this quarter were STWD, VZ, & ARCC. This quarter's dividend total: $122.39, (24Q4: $211.33). Jan. $28.58, Feb. $47.90, & Mar. $36.66 Total of 48 payments made. January continues to underperform. Payment count has also lowered, meaning companies are cutting dividends.

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.

Robo-sapien:

“If we continue to develop our technology without wisdom or prudence, our servant may prove to be our executioner.” Omar N. Bradley

As credit card debt increases, inflation followed by stagflation, and tariff disputes spark consumer uncertainty, the government still has no desire to ease hardships by putting money directly in taxpayer accounts. US Representatives would rather there be "oversight & security," by that they mean, control & access. Enter asset/ fund managers. As an asset class, private credit has grown 50% since 2021 and is expected to grow another 87% in the next five years. Accordingly, compensation packages in structured finance and private credit are surging. Average pay increases for external moves picked up to 21% in 2024. Employees who stayed in their roles saw overall compensation rise 16% in the US, reflecting improved bonuses, and in particular asset-backed finance, has the fastest growing compensation levels within credit. The program continues to seek tokenization & digitization of all kinds of assets, ultimately under the charge of the “managing” firm and the overseeing government.

INFORMATION RECALL

By 23Q1 it was clear the underground economy, also known as the informal economy (everything done outside of Uncle Sam's eyes and tax reach), may have been the key to the Great Reset. The market oligarchs raise prices, initiating another wealth transfer through gas, food, and rent, from the underground economy into the main street economy through inflation. Sidenote: Gas prices in California reached $4.49. Americans have been cash-strapped with our everyday spending outpacing our income, which is impacting our ability to save and plan. The Fed blamed wage growth for inflation, so they tightened the money supply to force Wall Street to lower prices by cutting payroll expenses. As the world adjusted to a new normal post-Covid, we had to also prepare for a worsening recession, with more than 1 million Americans expected to lose their jobs. For those reliant on pension funds (401Ks, SSI), trillions in sell-off of equities in this upcoming year is expected.

In 24Q1 I focused on asset managers & financial institutions, noted a majority of recent capital fundraising coming from Asian and Middle East investors. Nonbanks expanded quickly to provide around 60 percent of all consumer and business credit. While governments, states, and their institutions are requiring massive investments to fund billion-trillion dollar deficits, the Fed jacked rates higher, and decided to treat ordinary Americans like ATMs and seize their cash. The year ended with the re-election of Trump, and a laundry list of tariffs and economic changes.

[Download PDF for full report]

Investment Strategy

The strategy going forward would involve buying in most sectors, with the exception of leverage. However, continued tariff hikes will increase volatility and market weakness, along with de-globalization; meaning elevated prices on an already overburdened overleveraged population. So, all expansion, if any, will likely come from the flagship portfolio WES:RS.

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.