My move was bigger than usual this week. It all came from the IPO of Figma (FIG).
I transferred $10k into my Robinhood account last week to request an allocation of $FIG IPO shares, hoping to buy it at a fair price of around $30. Disappointingly, on 07/31, the IPO date of FIG, Robinhood only allocated one share to me...the price was $33, and it shot up to over $110.
At around a $60 billion market cap, I think Figma is a bit overvalued. There is not much hope for me to increase my stake. While I like to hold it for the long-term, just holding one share is a bit meaningless since it's less than 0.1% of my portfolio. Hence, I decided to just sell it today at around $120 to earn a few bucks and moved on.
I transferred $5000 back to my bank.
So with the remaining new $5000 to take advantage of the dip today, I purchased:
$500 for AMZN
$633.94 for APO
$500 for BN
$200 for BTC
$500 for HASI
$500 for HHH
$500 for PAX
$500 for PYPL
$300 for TSLA
$1000 for UNH
The market dip was caused by a pretty bad job growth number.
"Nonfarm payrolls growth totaled 73,000 for July, above the June total of 14,000 but below even the meager Dow Jones estimate for a gain of 100,000"
"June and May totals were revised sharply lower, down by a combined 258,000 from previously announced levels."
It was hilarious that Trump fired the Bureau of Labor Statistics commissioner with the accusation that the commissioner, who was appointed by Biden, manipulated the numbers. Trump was definitely scrapgoating. There is no denying that his tariffs and his various dramatic policies and executive orders are taking a toll on the US's economy. Anyway, I saw this as a short-term thing, and I just kept buying.
Not much to talk about APO, BN, and PAX. Alternative asset managers are still my biggest convictions and I was glad to buy them on the cheap today.
HASI is still my favorite dividend stock today with around 6.5% dividend yield and an expected annual EPS growth of 5-10%. That is still cheap.
HHH is a bet on Bill Ackman. He hasn't made a move so far, but it's still early. I will see what he is cooking in 2025 Q2 earnings.
Amazon and Paypal both dipped after earnings, and I would say it was somewhat justified for the short-term. The revenue growth decelerated, with not much bounce expected in the short-term. However, I believe they can grow their profit margin for the medium-term (about five years), which should give them quite a lift on earnings per share. Amazon still has some hope to come back to ride on the AI boom with its AWS segment, but we'll have to hold our breath for now.
Tesla was expanding its "Robotaxi" service pretty aggressively. I believe its technology hasn't proved that it's safe enough to deploy real Robotaxi service. By using a safe driver, which essentially is like uber'ing using FSD, Elon Musk is definitely acting it. It may be true that he will eventually make it. He is a genius, so it is definitely possible. By covering as much territory of taxi service with the Tesla fleet as possible, That being said, Tesla is generating a lot of buzz and creating a mirage that Robotaxi's time has come. Although I don't have very strong confidence in Tesla being able to have low cost Robotaxi service in the short to medium term, Tesla is still in the race for the medium and long-term. I still believe Tesla has a fair chance to take over Waymo within 5 years. Also, they have the Optimus Robots showing off in the Tesla Diner recently, which has a potential to be a meaningful product line in 2027 and beyond. I am slowly accumulating shares.
BTC is mostly a hedge on USD long-term weakness.
UnitedHealth (UNH) is a new add-on to the portfolio. It is the largest health insurer in the United States. It is a good position to be in an insurance industry that the demand is pretty much guaranteed. With a free market, the asymmetric information between patients and healthcare providers will drive up cost indefinitely, which provides health insurers a lot of room to earn profits. It's similar to education in terms of the rise in revenue with no meaningful counterbalance. It is inevitable. Amazon, Berkshire Hathaway, and JPMorgan Chase partnered to form a healthcare company called Haven in 2018 (news, Harvard business case). They admitted failure and disbanded in 2021. It's that hard to crack the industry. The recent share price dip was caused by some cost overrun hurting profits. It's common in the insurance industry, and I believe it will fix itself within 1-3 years, so I am buying it at around 15 P/E using an EPS of $16 in 2025. The company has an expected long-term EPS CAGR of 10-15% and a dividend yield of around 3.5%. A 15 P/E is a pretty attractive valuation. I expect UNH to easily get to $20 EPS in a year or so. A more detailed writeup is here.
Transactions
Recent and upcoming dividend distributions
Portfolio performance snapshot
Total return:
One-year return:
Portfolio IRR (calculation): 23.89%
Approximated IRR for an SPY-only portfolio: 16.81%
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: 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, NNN, NVDA, PAX, PYPL, TSLA, TSM, UNH, XYZ, ETFs like SPY, VWO
Below are incomplete writeups:
META
Global Monthly Active User (MAU) above 2.8 billion. Facebook is the biggest social network in the world. There will always be people buying Facebook/Whatsapp/Instagram.
The economic moat is weakened by Tiktok, but Tiktok is not really a social network that connects users who are familiar with each other, but another variant of youtube, so Facebook is still the top dog in social networking, although user time spent is definitely hurt.
Given Facebook's investment in VR; optional values in Facebook dating, and Facebook shops; Facebook Pay and Messenger have good monetization potential; Instagram has a unique position for people to express themselves; the improvement in Ads Infra to compensate for the loss in Apple App Tracking Transparency, I believe Facebook will come back. Long term annual growth of 15-20% in earnings should not be a problem.
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.
OWL
Blue Owl Capital is an alternative asset management company, similar to Blackstone. Its focus is on direct originations of loans to private-equity backed and non-sponsored companies (middle-market and upper-middle-market companies). It has a net leases real estate platform. It also provides long-term minority equity and financing to private capital investment managers. A majority of the company's assets are funded by permanent capital, so it does not have withdrawal risk. Most of its earnings come from recurring fees from asset management without performance consideration, so the earnings stream is quite stable. Given it acquired STORE Capital (STOR) recently at a decent price, the management is very good.
Equity compensation related expenses were about 35% of DE that got added back into GAAP when getting DE. Its "true" EPS is about $0.1 per quarter, or about $0.4 in 2023. The P/E is about 30, not cheap, but not very expensive considering its growth is 15-20% annually. Another way to look at it is that its dividend yield is about 4.5%, and it's growing in double digits for at least 3+ years, which makes it quite attractive.
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.
