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IMF January And February Buys: The 11 Stocks Added To My Fund

Mar. 10, 2021 1:23 AM ETED, FLIC, ITIC, LMT, RTX, TRP, ALSSF, HRL, REYN, ROP, NWN, TRP:CA71 Comments


  • 9 buys for January/February, plus 2 dividend reinvestments.
  • New positions for the IMF in Lockheed Martin and Alsea.
  • How going against the ESG investing crowd will lead to favorable results in the 2020s.
  • These are the first buys with the portfolio now being held at Interactive Brokers.
  • This idea was discussed in more depth with members of my private investing community, Ian's Insider Corner. Learn More »

Ian's Million Fund, "IMF," is a real-money portfolio that I've written about monthly since January 2016 here at Seeking Alpha. The portfolio is a largely buy-and-hold group of ~130 stocks. Each month, I buy 10-20 of the most compelling stocks available at then-current prices, deploying $1,000 of my capital plus accumulated dividends. If things go according to plan, this portfolio, which began when I was 27, will hit one million dollars in equity in 2041 at age 52. I intend it to serve as a model for other younger investors.

I made the IMF buys for January and February. The portfolio's old brokerage custodian, Folio, shut down its operations in January. Perhaps that was just in time given the total chaos that was about to kick off over at rival Robinhood. Anyways, the portfolio was transferred over to Interactive Brokers (IBKR) in mid-January.

Interactive has been my primary brokerage since 2012 if I recall correctly. However, I had no idea that they supported fractional share trading, and it took me a while to set up (it doesn't seem to work in their dedicated web trader, for example). Anyways, I got it figured out, but not in time to hit the January buying window.

So, for February, I combined January's $1,000 of my capital and received dividends from December along with the normal $1,000 + dividends for this month. Here are the buys:

Source: Interactive Brokers / my screenshot

I divided the $2,000 equally across the positions, with one exception. This resulted in $200 ($199 plus the $1 commission) going into each stock. As you can see, for Alsea (ALSEA-Mexi) (OTCPK:ALSSF), the Mexican security, Interactive Brokers charges a 60 Mexican Peso ($3) commission, so I bought a double position to justify the higher fee.

As always, I keep dividend-funded stocks in a

This is an Ian's Insider Corner report published in February for our service's subscribers. If you enjoyed this, consider our service to enjoy access to similar initiation reports for all the new stocks that we buy. Membership also includes an active chat room, weekly updates, and my responses to your questions.

This article was written by

Ian Bezek profile picture

Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets.

Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More.

Analyst’s Disclosure: I am/we are long ALL THE STOCKS IN THE TABLE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (71)

eaglebear profile picture
@Ian Bezek
I am loving the recovery of Wash. That tip led me to CTBI which is doing swell for me (div champion and regional bank) I recently found PB in a screen. Have you looked at them. At fair value and near dividend champ with 21 years of raises. % year average 11% div raise. If I may ask AMT looks good here with more growth ahead. Any thoughts on these two? Also bought heavily into TD and BNS in the recession. Both up very nicely for me. Canadian banks only large banks that interest me but the US regionals seem to have some real gems!.
Ian Bezek profile picture
@eaglebear I own CTBI in the IMF portfolio as well. No opinion on AMT. And I prefer U.S. banks to Canada for the moment as the interest rate/economic outlook is more favorable. There will be a time to rotate some back into Canada though.
eaglebear profile picture
@Ian Bezek
Have you taken a look at PB in the past?
darnoc111 profile picture
@Ian Bezek I think you are making a mistake in thinking that inflation is not coming. As long as we see commodity prices increasing, especially oil, along with interest rates and wages, I do not see how we escape inflation. And once people begin to expect price rises inflation will feed upon itself since people will try to buy before prices rise more thus creating a dog chasing it's tail effect. I still remember how fast inflation took off after the oil price shocks in the 70's and how rapidly interest rates rose compared to how long it has taken interest rates to fall. When I go shopping I am seeing prices fluctuate and moving higher. Another thing that is pushing inflation is due to disruptions in manufacturing from covid. Listening to CPB's CC yesterday they said that they had added 20% more people to keep up with demand but even that did not help as much as they hoped. This was because of covid's effect of workers showing up. I am sure that they are not isolated and that all manufacturing has been affected which will have the effect of driving up costs and prices. Any bond like investment will be affected and adjust to expectations of increasing yields and prices, as bonds are. Maybe you can protect yourself with buying puts on stocks you buy, but that will probably cost more than you will make on the dividends. For now I am not selling the utilities that I hold, but if I see inflation getting out of control I will probably sell them and wait in cash. I also see things like Bitcoin as basically Ponzi scheme type investments since they have limited amounts of coins and when all are invested in them and some begin to sell the price could fall like a rock. Though with reddit investing they could hold Bitcoin up a little longer until those holding the bag realize that they were burning money. Best of luck, and I still think your analysis is still one of the better ones.
Ian Bezek profile picture
@darnoc111 Crude went back up to $75 in 2018 and did next to nothing for inflation. Even with Trump in office which was supposed to be inflationary, nothing happened. There's a huge supply of oil from frackers available with a few month lag whenever the price goes up now so it's hard to get sustained inflation from there.

Similarly, many of the commodities that have spiked such as lumber or copper are due to Covid shortages which will be transitory. There's no shortage of trees, for example, just need a little bit to reallocate labor to up supply.

Conditions are extremely different from the 70s now:

Baby bust instead of baby boom.
Increasing peace in the Middle East.
Far more automation/pressure on labor
Unions are essentially dead now (they used to help cause the wage/price spiral)
Near-record income inequality keeps money from going to middle and lower class.

This stuff could change, but for now, USA still seems to be heading destination Japan from a macroeconomic perspective. Japan has been printing and borrowing up a storm for 30 years now and their inflation rate reliably stays at 0%.
darnoc111 profile picture
@Ian Bezek Trump used the strategic reserve of oil to push down oil price, and this so far has not happened. And Trump encouraged drillers to drill with his policies of cutting regulations, which we are now seeing being reversed. Also OPEC and US drillers have hopefully learned not to oversupply oil as we are seeing recently when OPEC met recently. Further with the push for higher minimum wages all wages will rise as they are adjusted to this higher amount. As for income inequality that will get worse as taxes rise and out of control federal spending devalues the dollar. Devaluing the dollar will make imports more expensive and force more robots to be used, like we are seeing in grocery stores with self checkouts. But this means higher skilled workers will be needed and higher wages than the minimum and higher costs pushed through to the consumer. I also think that commodities prices have been held down due to limited growth in markets around the world. That will change as our government throws money heavily into the economy and we see shortages grow especially in the green energy areas. And without a way to cheaply store electricity intermittent power will force the purchase of batteries for backup driving more demand for raw materials pushing up prices for all along the value chain. I have been reading that some think that the opposite of inflation could happen, deflation. But I doubt that for now since so much money is being borrowed and spent. We live in interesting times. For now I am seeing higher prices in grocery, housing, fuel, and as promised soon in taxes. Interest rates for 10 year treasuries bottomed last year at .5% and are now over 1.5% and growing. Higher interest rates are in themselves inflationary as was in the 70's. If it was only one thing forcing prices higher I could understand and agree that inflation will not happen. But you have higher commodities, energy, interest rates, wages, housing, and runaway federal spending devaluing the dollar. I do not think you can compare to several years ago to now because lower costs are embedded in current prices and as costs rise so will prices and inflation. Thanks for your thoughts, but I still think inflation is here and growing, only time will tell for sure.
darnoc111 profile picture
@Ian Bezek Here is an article that I think is relevant -- "Companies are boosting wages to bring workers back in COVID-19 recovery"
Token White Guy profile picture
Been adding to LMT for a for months now in the $335-$338 range. I do think LMT will be north of $400 in the near future, so it's a good opportunity to accumulate in an otherwise frothy market.
Alex Pitti profile picture
I dont understand the growth potential of REYN
Ian Bezek profile picture
@Alex Pitti 14x earnings to start with 3-5% growth going forward. Nothing thrilling, but beats KO at say 25x earnings and no organic growth.
Alex Pitti profile picture
@Ian Bezek well yeah, but what about Nestle?
Ian Bezek profile picture
@Alex Pitti Nestle is at 22x earnings with -2% revenue growth if Seeking Alpha's numbers are correct (could be wrong, I haven't checked in their base currency).
Greenhorn Investor profile picture
Thanks @Ian Bezek

I'm also long LMT and RTX. I don't see the demand side of the equation diminishing so these companies will be there to provide the supply.
@Greenhorn Investor i actually see demand increasing. Trump might have funded the military but in general it wasn't really being used. they bought stuff and it sat there. Biden, however, proved that he's willing to use the military by bombing syria within his first 50 days in office. By the end of his four years I would be surprised if we had any missiles left in the air force.

Like I told people when Biden got elected. Biden voted for every single war in his entire 47 years of politics. You really think old dogs learn new tricks? long all war stocks.
@Finding Your Retirement I agree. I've been buying defense stocks ever since I thought there might be a chance he could be elected. It's not group thinking, for sure, but as you say, it's based on his history. I think we will also see military build-up vis-a-vis China, and I'm trying to plan how to shop for that.
Greenhorn Investor profile picture
@Finding Your Retirement @janedoeseeker
I do think there's a decent chance military activity increases. My 'demand side won't materially decrease' is my floor.
Very nice update on your portfolio and I can say I wish I would have started what you are doing 25 years earlier. Keep up the good work and thanks for the update.
fhbecker profile picture
Hope you get a chuckle from this, when Fidelity asked me if I wanted to attend a
"Socially Responsible Investing Forum to hear leaders in the financial services industry, share their perspectives on socially responsible investing"

I replied;
Probably not the best event for me, as I think ESG really stands for Every Salesman's Gimmick or Every Salesman's Goal.

ESG appears to me to be a clever way to convince someone that something might do more for them than is possible. I.E. buy this and "help mankind or the planet" or that something is worth more than a realistic appraisal of its value.

There are those that consider Tesla to have a very high ESG score, but when you consider Tesla's governance, Mr. Musk's contempt for the SEC, or the electricity's fuel source (25-50% coal), one has to ask how is that possible? Ahhh the ESG rules!

Those rules do not consider the companies life cycle product impact and the system is quite game-able. Those that write the ESG rules carefully craft them. For example, over half of Asia's electric grid is powered by coal and they are building more coal power plants as fast as possible. They make most to the stuff we import, yet Amazon has declared that it will be "net zero carbon across Amazon by 2040." However most of the stuff on their web site in made in Asian factories mostly powered by coal.

So if something, mostly made using electricity generated by coal, is delivered by an electric vehicle, 20-25% powered by coal, they get a high ESG score? Ok....they will be buying the electricity from renewable sources, the net effect of that, is a shell game, as the to high carbon electricity just get sold to someone else.
Ian Bezek profile picture
@fhbecker Excellent post! I love your acronym for ESG. That's a great point on Asian manufacturing -- I hadn't thought of it that way before. And you're right, Tesla has to fail any reasonable standard of governance.
horowitzcpa profile picture
Well done Ian! I don’t think you’re giving yourself enough credit here. Here are four examples: CBOE, OVBC, FAF, TFSL. All up nicely over the past few months - all paying healthy dividends.
Ian Bezek profile picture
@horowitzcpa Thanks that's very kind. I think FAF should be up more. Slightly disappointed with it so far, to be honest. TFSL and CBOE looking great though.
Panzerman profile picture
Great update Ian!
Question for you. I hold WASH and am up 58%
I hold WFC and it's up 35%
My idea is to sell WASH and or WFC and move to FLIC? Would that be a prudent idea?
Ian Bezek profile picture
@Panzerman I still own all three. WASH is arguably the best of those as a long-term franchise. I still believe WFC will recover and get to $60 at some point... not as much upside from here as $22 a few months ago though. FLIC is the one I'm currently buying.
Panzerman profile picture
@Ian Bezek Thank you IAN :)
I had hoped for an update on Renn.
Ian Bezek profile picture
@garygm Given that it's outcome rests on a lawsuit and is a special situation, it's not appropriate for a buy and hold portfolio such as this one.
gfmn2000 profile picture
Thanks for the update on your plan. You will get there.
I share your feelings about ESG investing. Some of their logic makes no sense. After all what is more ethical and socially responsible than avoiding war and protecting your people! Without a strong US defense there would only be more devastation across the globe. I have investments in GD, LMT, RTX, and recently started new positions in NOC and LHX. These companies are vital for us to maintain our freedoms including the rights of the ESG crowd to have their stupid ideas.
RoseNose profile picture
These updates are my favorites as you offer such a nice over view of the market and sectors in general. I agree with adding to LMT and have been doing so as well. REYN looks new to me and very interesting...thanks for the idea.
Long NYCB recently as well, and enjoying owning pipelines too! Happy with ENB.
Best to you always Ian
... and Happy Investing :)) Rose
Ian Bezek profile picture
@RoseNose Thanks for checking in and glad you liked the ideas.
newfruit profile picture
Been a while since I caught one of these... thanks for the update!

"'I'm a firm believer that there will be at least one more massive oil and gas bull market before humanity stops using those resources."

I am with this logic. While I am happy to see people trying to drive business in a greener direction I believe the pandemic has distorted people's perception of reality.
Wm Hagerty profile picture
Thank you, always a good one.
For me, any investment in the defense sector would only occur in a "correction" scenario where I can get in to LMT or NOC dirt cheap. Good to see your still buying REYN and HRL as I only recently established positions in those names. Considering adding to REYN. I'm long WASH and just averaged up a bit so that covers my regional banking need for now.
Ian Bezek profile picture
@Arimnestos WASH is one of the absolute best in the regionals, can't argue with that pick at all.
Glad to read a new IMF pf update. Thanks Ian!
Appreciate the update, a lot to learn from your investing style
I also added LMT recently. May add some more VPU on any pullback.
Thanks Ian! I always enjoy reading your articles.
Good stuff. Thanks for posting the trades and color.
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