Thursday, February 4, 2016

2015 And Beyond

With 2015 wrapped up, we have our sights set on what we expect will be a better year in the markets.
The S&P 500 has returned 0.6% (CAD) while the S&P TSX TR  has returned -8.3% (CAD) for the year ending December 31st, 2015. For the same period the our portfolio has declined 8.1% – dividends included.   We suffered mightily, under the weight of weak commodity prices. I've been my reducing energy exposure for sometime, all the way back to August of 2014, with the outright sale of Hess Corp. (HES) at prices between $83-$100. Little did I know that was the top for the old saying - "nobody rings a bell at the top or the bottom". With prices across the energy board at near historic levels, now is not the time to turn our back on energy - warts and all. There's still value in the well run operators and the service businesses that support them. If I didn't have energy exposure already, then HES, YPF, AR, BXE.TO, would be good places to commit some capital.

On the bright side, we continue to enjoy the tailwind of a strong USD, which has been in place for several years. We are significantly overweight USD assets...but change is in the air.
While no one knows if the CAD is done going down, but odds are we are close to the bottom. The USD against a basket other currencies, measured by the "Dixie" - DXY, seems to be getting toppy. We will look closer to home for undervalued securities, and trim our USD exposure.

Here's a look at our top five holding as of the end of 2015:

Berkshire Hathaway (BRK.B)………..    11%

Bank of America (BAC)……………..      9%

ChipMos Technologies (IMOS)……...     7%

American Intl Group (AIG)….……...      6%

Posco Steel (PKX)…………………...      6%
All the best for 2106! Happy investing!

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