Sold all PAX, then purchased:
$3000 for AHH
$1000 for APO
$1000 for BX
$1000 for NVDA
$21903.05 for OWL
$5000 for UNH
The Snowcap Research short report on Patria caught me off guard. I wish I had read it a few days ago. Given the extensive use of public information, I found the report credible enough to at least prove that the Private Equity part of the company is a mess. It's underperforming and potentially has integrity issues. That defeats my investment thesis of good track record, local expertise, etc. I believe it would cause enough reputation damage to the company that makes it infeasible for my investment. I detailed more about this in the update page.
The sale was 15% of my net assets. I earned about 14.89/12.21-1 = 21.95% excluding dividends over an average of about 13 months, luckily not too bad.
I decided to sell the whole position and put most of the proceeds in Blue Owl Capital (OWL) that is also an alternative asset manager, and is trading at 14-15 P/E and over 6% dividend yield with 10-20% per-share earnings growth rate. I also put a substantial amount in United Healthcare (UNH) for its 3% dividend yield and my expectation of 10-15% per-share earnings growth rate.
I was glad that Blackstone (BX) had dropped quite a bit recently, so I had an opportunity to add into the position when it's getting close to my buy below price of about $130.
Transactions
Recent and upcoming dividend distributions
Portfolio performance snapshot
Total return:
One-year return:
Portfolio IRR (calculation): 23.15%
Approximated IRR for an SPY-only portfolio: 18.53%
Individual holdings:
Breakdown by categories (real-time):
Total returns for individual holdings:
Last prices:
Portfolio holdings conviction
The convictions in the table below reflects my current opinions and will guide the future contribution of additional investment to existing holdings. Stocks not inside the table are stocks with subpar return on equity that will be very unlikely to receive more contributions from new money (there can be exceptions for very cheap stocks).
Conviction in long-term prospects means how much I believe a company would match or outperform the market (e.g. S&P 500) in the long run. Valuation matters so the conviction generally corresponds to the neutral rating of Valuation. It has the following ratings: weak, moderate, strong
Valuation: greatly overvalued, overvalued, slightly overvalued, neutral, slightly undervalued, undervalued, greatly undervalued
Brief comments on individual holdings
Most Brief analysis and latest updates are here:
AHH, AMZN, BABA, BIDU, BN, BTC, HASI, HHH, HOOD, MAIN, MCD, META, NNN, NVDA, OWL, PAX, PYPL, TSLA, TSM, UNH, XYZ, ETFs like SPY, VWO
Below are incomplete writeups:
BRK.B
Berkshire Hathaway in the current form was found by my idols, Warren Buffett and Charlie Munger. I will try to buy more if it's not very expensive.
APO
Apollo specialized in distress situations, which reduced the number of competitors. Its famous slogan is purchase price matters, which shows how price conscious they are in picking investment. It has another slogan "we want 25% of everything and 100% of nothing on the asset", which is a goal post of the company about engaging in a lot of asset managing transactions even for other asset managers. It's a good way to position the company to have a large adjustable market. Their use of reinsurance company, Athene, helps them to grow assets under management effortlessly as well.
[2025/04/04] Expected 2025 EPS is $8.3, so P/E around 13.25, pretty cheap with an expected growth of 10-15%. 1.68% dividend yield helps a bit as well.
BAM
The pure asset management company part of the Brookfield Corporation. With BN, BAM can grow its asset under management (AUM) easily. Oaktree Capital, founded by the famous Howard Marks, is part of it, so it's very reputable.
The management has already indicated they are locked in to grow its cash flow 15% annually for the next field years. Its management fees do not rely on performance that much, so they are stable. With an expected 2023 EPS of $1.39, P/E 25 is not cheap, but with the help of 3.8% dividend yield (close to 100% payout, thanks to the asset light business model), there is a fair chance the stock can return 15% annually.
BX
A very reputable company in real estate. Its management fees rely on performance much more than Brookfield, but Blackstone has a track record, so I am not too worried about it.
Expected 2023 EPS is $4.36, P/E ~ 21. A 3.5% dividend yield with expected annual growth of 10-15%, this stock can potentially get a 15+% return in the long run.
