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Summary

  • Fisher’s US long portfolio value increased marginally from $44.12B to $44.34B in Q1 2014.
  • American Express, Johnson & Johnson, Pfizer, United Technologies, and Wells Fargo are the largest five individual stock positions.
  • Fisher is bullish on Apple, Lloyds Banking Group, Siemens, BASF, & Chevron and bearish on Cisco & Oracle.

This article is the first in a series that provides an ongoing analysis of the changes made to Kenneth Fisher's US stock portfolio on a quarterly basis. It is based on Fisher Asset Management's regulatory 13F Form filed on 04/22/2014. The firm primarily invests money for institutions and high net worth individuals. Ken Fisher founded Fisher Investments in 1979. His active management style focuses on identifying information not widely known or interpreting widely-known information differently and correctly as compared to other market participants. Equity classifications (growth vs. value, small cap vs. large cap, etc.) do not play any role in security selection as over the long-term each such category will have almost identical real-risk-adjusted returns.

Ken Fisher is a prolific writer and is best known for his long-running Forbes Portfolio Strategy column. He has also written several Research Papers (most notably in Behavioral Finance) and ten investment books (several of them were NY Times best sellers). He pioneered the use of P/S ratios as an analytical tool and applied his father Philip Fisher's scuttlebutt investment philosophy to generate consistently high returns for Fisher Investments. The firm has over $50B in Assets Under Management (AUM). The portfolio is diversified with recent 13F reports showing over 500 individual positions. There are a large number of very small positions and the significantly large positions (more than 0.5% of the US long portfolio) in the portfolio are distributed among 50 or so stakes.

This quarter, Fisher's US long portfolio increased marginally from $44.12B to $44.34B. The number of holdings increased from 561 to 586. Significantly large positions remained remarkably steady at 54 and that part of the portfolio saw only minor adjustments to the position sizes during the quarter. The largest holding is FI Enhanced Global High Yield ETN (NYSEARCA:FIEG), an instrument tailor-made for them (Fisher Investments has nearly all the shares, although it is exchange traded). Largest five individual stock positions are American Express, Johnson & Johnson, Pfizer, United Technologies, and Wells Fargo accounting for ~2% of the overall US long portfolio each.

New Stakes:

None.

Stake Disposals:

None.

Stake Increases:

Apple Inc. (NASDAQ:AAPL): AAPL is a 1.76% of the US long portfolio position that was built-up in 2012 at prices between $422 and $500. The position was increased by ~60% in Q2 2013 at prices between $415 and $450. The stock currently trades at $570. The activity indicates a bullish bias.

Lloyds Banking Group plc ADR (NYSE:LYG): LYG is a 0.94% of the US long portfolio position first purchased last quarter at prices between $4.67 and $5.36. The position was increased by ~10% this quarter at prices between $5 and $5.76 and the stock currently trades at $5.08. The aggressive stake built-up indicates a clear bullish bias.

Siemens AG ADR (SI): SI is a 1.10% of the US long portfolio position first purchased last quarter at prices between $119 and $138. The position was increased by ~7% this quarter at prices between $123 and $136 and the stock currently trades at $133. The aggressive stake built-up indicates a clear bullish bias.

Taiwan Semi. (NYSE:TSM): TSM is a very long-term 0.78% of the US long portfolio position. The bulk of the original stake was purchased in 2012 at prices between $12.50 and $16.50. The position was reduced by ~50% in Q2 2013 at prices between $17 and $20. The stock currently trades at $19.94.

UBS AG GRS (NYSE:UBS): UBS is a 1.24% of the US long portfolio position established in Q3 2013 at prices between $16.92 and $21.45. The stake was reduced by around one-third last quarter at prices between $19.30 and $21.60. This quarter saw an about-turn as the position was increased by ~37% at prices between $18.62 and $21.50. The stock currently trades at $20.28.

American Express (NYSE:AXP), BHP Billiton (NYSE:BHP), Daimler AG ADR (OTCPK:DDAIF), Glaxosmithkline plc ADR (NYSE:GSK), International Business Machines (NYSE:IBM), Novartis A G ADR (NYSE:NVS), Novo-Nordisk A S ADR (NYSE:NVO), PepsiCo Inc. (NYSE:PEP), Royal Bank of Canada (NYSE:RY), Sanofi ADR (NYSE:SNY), Toyota Motor ADR (NYSE:TM), & United Technologies (NYSE:UTX): These are significant positions (more than 0.5% of the US long portfolio) that were increased marginally (less than ~2% change in position size) this quarter. As the activities were very minor, they do not indicate a clear change in bias.

Stake Decreases:

BASF SE ADR (OTCQX:BASFY): BASFY is a 0.74% of the US long portfolio position that was reduced marginally this quarter. The bulk of the current position was purchased in Q2 2013 at prices between $88 and $96. The stock currently trades at around $112. BASFY was a fairly large long-term position in the portfolio that was established well before the financial crisis. In 2012, the position was reduced to an insignificantly small stake but has since been built back up. The activity indicates a bullish bias.

Chevron Corporation (NYSE:CVX): CVX has been in the portfolio since 2009. Most of the stake was purchased in 2012 at prices between $96 and $117. The stock currently trades just outside that range at $124. The position was reduced marginally over the last few quarters and it currently accounts for 0.91% of the US long portfolio. Fisher is bullish on CVX.

Cisco Systems (NASDAQ:CSCO): CSCO is another long-term holding that was first purchased in 2009. By 2012, the stake was at over 33M shares but has since been reduced. The position currently stands at just over 14M shares (0.72% of the US long portfolio). The consistent stake reductions over several quarters indicate a bearish bias.

Comcast Corporation (NASDAQ:CMCSA): CMCSA is a 1.31% of the US long portfolio position. The original position was established in 2012 at prices between $24 and $37. It has since been marginally reduced. The stock currently trades at around $51.

Walt Disney (NYSE:DIS): DIS was a very small position in the portfolio till 2012 when over 8M shares were purchased at prices between $39 and $53. The stock currently trades well over that range at $78.50. The last two quarters saw minor trimming at prices between $64 and $77. The position still stands at just over 8M shares (1.45% of the US long portfolio).

Exxon Mobil (NYSE:XOM): XOM is a very long-term position. In 2008, just over 5M shares were purchased at prices between $62 and $95. Most of that position was eliminated in 2009 at prices between $66 and $82. The stake was built back up in 2011 at prices between $69 and $87. Last several quarters have seen some trimming and the current position stands at ~4.3M shares (~1% of the US long portfolio). The stock currently trades at around $100.

Google Inc. (NASDAQ:GOOG): GOOG was a very small position that was built-up to a substantial 2% position in 2011 at prices between $242 and $300. The stock currently trades at $518. Last few quarters have seen minor trimming at prices between $450 and $610. The stake still stands at 1.64% of the US long portfolio.

Home Depot (NYSE:HD): HD is a 1.41% of the US long portfolio position first purchased in 2012 at prices between $42 and $65. The stock currently trades at $79. Last two quarters saw minor trimming at prices between $74 and $83.

Johnson & Johnson (NYSE:JNJ): JNJ is a top-five individual stock position at just under $1B (2.21% of the US long portfolio - almost 10M shares). Around two-thirds of the position was purchased in 2008 at prices between $55 and $72 and the rest in 2011 at prices between $58 and $68. The stock currently trades at $100.

L Oreal Co. ADR (OTCPK:LRLCY): LRLCY was a very small position first purchased in 2008. It was built up to a significant ~1% position in 2012 at prices between $20 and $28. Last few quarters saw an ~8% trimming at prices between $31 and $36 and the position currently stands at 0.76% of the US long portfolio.

Oracle Corporation (NYSE:ORCL): ORCL is a ~1% of the US long portfolio position that has been in the portfolio since before the financial crisis. The large ~2% stake was reduced by around 50% in Q4 2013 at prices between $32 and $38 and was marginally trimmed this quarter. The activity indicates a bearish bias.

Procter & Gamble (NYSE:PG): PG is another long-term 1.36% of the US long portfolio position that has been in the portfolio since before the financial crisis. The original position was increased by just over 75% in 2012 at prices between $60 and $70. The stock currently trades at $81.

Qualcomm Inc. (NASDAQ:QCOM): QCOM is a 1.58% of the US long portfolio position first purchased in 2011 at prices between $46 and $60. The stake was increased by ~62% in 2012 at prices between $55 and $68. The stock currently trades at $78 and the last few quarters have seen minor trimming.

SAP AG ADR (NYSE:SAP): SAP is a 1.09% of the US long portfolio position that was built-up over several quarters in 2012 at prices between $54 and $80. The stock currently trades at $78. The position has since been reduced by ~8% at prices between $70 and $87.

Amazon.com (NASDAQ:AMZN), Bank of America (NYSE:BAC), Berkshire Hathaway (NYSE:BRK.B), Citigroup Inc. (NYSE:C), Coca Cola (NYSE:KO), General Electric (NYSE:GE), HSBC plc (NYSE:HSBC), Intel Corporation (NASDAQ:INTC), JP Morgan Chase (NYSE:JPM), LVMH Moet Hennssy ADR (OTCPK:LVMUY), McDonalds Corporation (NYSE:MCD), Microsoft Corporation (NASDAQ:MSFT), Pfizer Inc. (NYSE:PFE), Visa Inc. (NYSE:V), Wells Fargo (NYSE:WFC), & Schlumberger Ltd. (NYSE:SLB): These are significant positions (more than 0.5% of the US long portfolio) that were reduced marginally (less than ~2% change in position size) this quarter. As the activities were very minor, they do not indicate a clear change in bias.

Kept Steady:

None.

The portfolio also has several large positions in different ETNs and ETFs - those together accounts for just over 13% of the US long portfolio.

The spreadsheet below highlights changes to Fisher's US stock holdings in Q1 2014:

(click to enlarge)

Editor's Note: This article discusses one or more securities that do not trade on a major exchange. Please be aware of the risks associated with these stocks.

Source: Tracking Ken Fisher's Fisher Asset Management Portfolio - Q1 2014 Update