My 36 Stock $338K Portfolio: Back Into China
Summary
- Some major changes in my portfolio in March including an entrance back into a few China stocks, some new Healthcare picks, and a new large financial SPAC position.
- I also sold off some of my more defensive value positions during the last rotation to add to some of my key tech positions including Apple.
- A portfolio built for individual investors to outperform the majority of money managers through diversity and risk with the goal to be worth millions in retirement.
It is my firm belief that 80% of money managers can't outperform the S&P 500 index over time due primarily to the fees they charge their clients. Each and every individual person intent on having the happiest retirement possible could and should take charge of their retirement portfolios and invest in simple index/mutual funds and/or a balanced portfolio like the one I have set up to maximize returns over decades of performance.
Contributions:
During the month of January, my retirement portfolio had $2,100 in contributions added to it. In February, my spouse and I contributed $12,000 to our IRA portfolios for 2020 with the goal to do another $12,000 in IRA contributions for 2021 later on this year. March had no meaningful retirement contributions for stocks or Mutual Funds. Here is how my portfolio performed compared to the SPDR S&P 500 Trust (SPY) over the beginning of 2021. The rotation to value ended up smashing my portfolio for the month but I am in great position for a rebound if that trend ends as I loaded up on unloved growth stocks and tech names.
Fund | SPY | Welsh | Welsh Minus Contributions |
% Gain Jan 2021 | -1.02% | 2.85% | 2.2% |
% Gain Feb 2021 | 2.84% | 2.59% | -1.1% |
% Gain Mar 2021 | 4.16% | 1.53% | 1.53% |
YTD GAINS | 5.96% | 7.12% | 2.66% |
Regular contributions to your retirement portfolio help your portfolio to grow even on less than ideal months where you fail to outperform the S&P 500. Not every month will be a winner, but regular contributions can help make anyone's performance look good over time.
Here's how the SPY has tracked over the beginning of 2021.
My portfolio was divided up to start 2021 at around 73% stocks and around 27% mutual and index funds with the goal to increase stocks to over 80% of my portfolio over time. It is currently built with approximately 87% domestic stocks and 13% foreign stocks as I have added China stocks this month again to my portfolio. I have about 3% of my portfolio in bond mutual funds so that I know how they work and to have at least a little exposure to this sector over time. I plan to have bonds be a very small portion of my portfolio up to right around age 65. Diversification lifts my whole portfolio's returns over time, so finding the best stocks in every sector is a goal for me each and every year. Here are some of the main changes since my last portfolio article in February of 2021.
Welsh Portfolio | Stocks | Index/Mutual Funds | Bonds | Domestic | International |
December 2020 | 72% | 28% | 3% | 85% | 15% |
January 2021 | 73% | 27% | 2.6% | 87% | 13% |
February 2021 | 72% | 28% | 3% | 89% | 11% |
March 2021 | 73% | 27% | 3% | 87% | 13% |
Here are the details of my personal ~$338k portfolio then, based on values of approximately $30k, $300k, and $3 million broken down by sectors with brief descriptions of each stock in each sector. The best thing about my portfolio setup is that it is scalable so that people interested in following a similar path can set up their portfolios to follow my path no matter how small or large their holdings are. With fee-free trading and the advent of fractional shares, investors are more capable than ever in setting up amazing portfolios even when starting from scratch.
Source: Author
The Information Technology Sector (Aim = 15% of my Stock holdings)
Stock | $30K | $300K | $3M |
$AAPL | $1,830 | $18,300 | $183,000 |
$QCOM | $820 | $8,200 | $82,000 |
$XLNX | $860 | $8,600 | $86,000 |
$DELL | $490 | $4,900 | $49,000 |
$RBOX | $480 | $4,800 | $48,000 |
% Portfolio | 18.3% |
1. Apple (AAPL) should be considered as a potential cornerstone piece to any portfolio as one of the world's largest and most profitable companies that prints money almost faster than the Fed. I used the latest rotation from high growth to value in the market in March to add to my stockpile of Apple as the stock hasn't noticeably appreciated in the last 6 months. I hope to keep adding some shares monthly as I think it is a great value at this time and a long-term winner.
2. QUALCOMM (QCOM) is a major technology solutions provider for companies like Apple and will be an integral part of upcoming transformational secular revolutions like 5G. It's currently my 8th largest individual position with no plans to ever sell currently.
3. Xilinx (XLNX) is being acquired by Advanced Micro Devices (AMD) in a $35B all-stock transaction hopefully before the end of 2021. I love the built-in arbitrage of all-stock transactions like this for tremendous companies like AMD and didn't mind selling my AMD in 2020 to buy Xilinx. I boosted my shares in Xilinx by a noticeable amount in March after its latest pullback. After this latest add not sure if I will get to add more shares before the end of the year when the AMD deal is close to finishing.
4. Dell (DELL) is a legacy holding which continues to aggressively grow through value acquisitions like the $67B EMC deal and the future potential full acquisition of the hybrid cloud giant VMware (NYSE:VMW) which it owns ~80% of. Michael Dell is a shareholder winner through and through and following in his stock footpaths I think is a good long-term decision.
5. Roblox (RBLX) is a teen gaming platform that came public through a direct listing in March of 2021. My hope was that it does not come out of the gate as hot as earlier IPOs DoorDash (DASH) and Airbnb (ABNB), which were too expensive for investing in for me personally when they premiered. I was very happy to get in at the IPO price of $64 a share for a large holding which I might add to in the coming months if it continues to linger around the IPO price or lower. I always try to have an eye on what younger generations are loving and this platform is expanding and growing phenomenally.
Sold: Sold my Microsoft (MSFT) stock as it was a small position and I wanted to add to my Apple shares as a core holding.
The Health Care Sector (Aim = 15% of my Stock holdings)
Stock | $30K | $300K | $3M |
$ARWR | $1,520 | $15,200 | $152,000 |
$MDT | $460 | $4,600 | $46,000 |
$MDXG | $1,720 | $17,200 | $172,000 |
$LLY | $460 | $4,600 | $46,000 |
$PFE | $300 | $3,000 | $30,000 |
$MNKD | $110 | $1,100 | $11,000 |
$SMMT | $290 | $2,900 | $29,000 |
% Portfolio | 19.9% |
6. Arrowhead Pharmaceuticals (ARWR) is my 4th largest individual stock position as an RNAi juggernaut entering key Phase 3 trials in 2021. A lovely balance sheet with key partnerships with Janssen (JNJ) and Amgen (AMGN) significantly de-risk its TRiM platform as it continues to expand into additional cell types. It has had a nice consolidation around $80 for a bit now so hopefully some good news will be all it needs to reach for that $100 handle.
7. Medtronic (MDT) Health Care device maker that I think has significant upside from COVID-19 issues for years to come. Hospitals will need the best equipment companies like Medtronic provide as health issues from Covid-19 could persist for years.
8. MiMedx (MDXG) was my largest individual stock position for a good portion of 2020 as the company made momentous strides in getting its financials back in order and re-listed on the NASDAQ. I trimmed this position after re-listing as its potentially game-changing knee osteoarthritis data comes out later in 2021. I hope to slowly add back to this position in 2021.
9. Eli Lilly (LLY) is a favored legacy holding that I hope to slowly add to over time and never sell. Some amazing drugs and a pipeline of potential game changing candidates can give this company real zip when good data hits.
10. Pfizer (PFE) A healthcare behemoth with a big stake in the fight against COVID-19. It seems like a great deal at current prices after its pullback from recent highs to start the year warranting me starting a new position in the company in late February.
11. MannKind (MNKD) Is a former legacy holding that I decided to jump back into after its recent $200M capital raise along with its collaboration with United Therapeutics.
12. Summit Therapeutics (SMMT) is also a former holding of mine that I sold after I had about tripled my money in. I love the CDC? And gonorrhea candidates in the coming years along with the CEO and majority shareholders backing as a sub $500M company. I plan on doubling my current shares in April when its rights offering expires.
The Communication Services Sector (Aim = 15% of my Stock holdings)
Stock | $30K | $300K | $3M |
$DIS | $2,010 | $20,100 | $201,000 |
$BIDU | $540 | $5,400 | $54,000 |
$TME | $300 | $3,000 | $30,000 |
$WWE | $590 | $5,900 | $59,000 |
$GOOGL | $410 | $4,100 | $41,000 |
% Portfolio | 15.7% |
13. Disney (DIS) will crush Netflix (NFLX) over time as its streaming platform continues to grow by leaps and bounds. Forever stock for me as my 2nd largest individual stock holding while always looking to add cheap shares. Unfortunately, pullbacks have been few and far between meaning I might not be adding shares until the end of 2021.
14. Baidu (BIDU) My main grab on re-entering the China space. The recent meltdown in stocks from the Hwang family office, Archegos Capital, means that stocks like Baidu are trading at a tremendous discount to where they were just a couple months ago with their fundamentals still intact.
15. Tencent (TME) Another victim of Archegos Capital, Tencent is a leader in China's music entertainment industry which also initiated a $1B share repurchase buyback program after the crash of its shares.
16. World Wrestling Entertainment (WWE) is one of the few remaining live event media stocks growing globally, while always a potential takeover target from juggernauts like Disney. Plus, late at night, when finding a good streaming movie seems virtually impossible, putting on a mindless WWE match serves as a great way to end the day for me at least.
17. Alphabet (GOOGL) One of the latest adds to my portfolio from the infamous FANG names which will most likely land in the never sell category. I prefer it currently over the likes of Facebook (FB) due to privacy issues but that might just be a transitory feeling.
Sold: Sold my AT&T (T) as I sold a lot of defensive names to take advantage of the sell off of quality technology stocks.
The Financial Sector (Aim = 15% of my Stock holdings)
Stock | $30K | $300K | $3M |
$GBTC | $2,450 | $24,500 | $245,000 |
$HSBC | $210 | $2,100 | $21,000 |
$RPLA | $1,280 | $12,800 | $128,000 |
% Portfolio | 16.1% |
18. Bitcoin (OTC:GBTC) soared over the back part of 2020 and rallied even more to start 2021 by reaching new all-time highs. Even after the most recent significant pullback, it is still my largest individual stock position as institutions continue to take a greater interest in it. As world banks and the Fed continue to print money like it's going out of style due to COVID-19, alternate money sources like Bitcoin could easily continue to see outsized gains in my opinion. Even Elon Musk likes it. Its pullback to end the month is one of the main reasons for my underperformance to the S&P 500 this month. Still absolutely love it though as my top investment.
19. HSBC Bank (HSBC) is a legacy holding that might finally see some upside if the United Kingdom can ever get Brexit resolved. That of course, might be a big if.
20. Finance of America (RPLA) My new value SPAC that goes public on April 1st of 2021. I believe it has a lot of hidden value in the stock which hopefully will be realized upon going public or over its first couple of earnings reports. The goal is to make some nice quick profits in the name and then transfer back into companies like JPMorgan again.
Sold: Sold my stock in JPMorgan (JPM) and BlackRock (BLK) as I took a big position in Finance of America as a value SPAC that I hope to trade out of in the near future after it goes public or after its first earnings report or two.
The Consumer Discretionary Sector (Aim = 6% of my Stock holdings)
Stock | $30K | $300K | $3M |
$TSLA | $330 | $3,300 | $33,000 |
$TSCO | $520 | $5,200 | $52,000 |
$MELI | $290 | $2,900 | $29,000 |
$BABA | $450 | $4,500 | $45,000 |
% Portfolio | 6.5% |
21. Tesla (TSLA) continues to dominate the world of online retail, cloud, and virtually anything else it expands into like no other company in history. Is on my current never-sell list with a small celebration every time I can add another share.
22. Tractor Supply Company (TSCO) quietly continues to perform as one of the best companies in retail mostly immune to Amazon's dominance. Its acquisition of Petsense makes a lot of sense now, especially with the growth of everything pet in the wake of COVID-19.
23. MercadoLibre (MELI) is Latin America's Amazon. One of the best international stocks in my portfolio that I really should add more to on pullbacks.
24. Alibaba (BABA) A pillar of Chinese stocks so an obvious add here although it wasn't directly involved in the latest large market sell off. Also the reason I sold my Amazon stock.
Sold: Sold Amazon (AMZN) in order to get some exposure to China stocks including its Chinese counterpart Alibaba.
The Consumer Staples Sector (Aim = 6% of my Stock holdings)
Stock | $30K | $300K | $3M |
$PG | $500 | $5,000 | $50,000 |
$PEP | $440 | $4,400 | $44,000 |
$GIS | $390 | $3,900 | $39,000 |
% Portfolio | 5.5% |
25. Procter & Gamble (PG) is a legacy holding that sports a decent growing dividend along with many best in class brands like Olay, Head & Shoulders, Dawn, and Charmin. Always nice to have some stalwarts for the upcoming recessions and depressions.
26. PepsiCo (PEP) is a phenomenal drink company with brands like Pepsi-Cola, Gatorade, and Tropicana along with amazing growth in the snack category with Frito-Lay that, in my mind, sets it apart from competitors like Coke (KO).
27. General Mills (GIS) is a legacy holding for me with a great dividend that experienced a huge turnaround during COVID-19 with its brands, including its $8B acquisition of Blue Buffalo in 2018. Its former debt concerns have mostly evaporated as it has shored up its balance sheet and continues to benefit from the stay-at-home movement.
The Industrials Sector (Aim = 6% of my Stock holdings)
Stock | $30K | $300K | $3M |
$J | $870 | $8,700 | $87,000 |
$SPCE | $550 | $5,500 | $55,000 |
$AXON | $420 | $4,200 | $42,000 |
% Portfolio | 7.5% |
28. Jacobs Engineering (J) is a legacy holding I have loved for years. A long-time no-debt company that makes super-smart acquisitions now has low debt and has initiated a dividend which it should be able to grow nicely over the coming years. Its focus on carbon neutrality and diversity in its workforce makes it a prime target for the younger generation. It is currently my 10th largest holding in my retirement portfolio.
29. Virgin Galactic (SPCE) is one of the premier ways to play future commercial space flight. With its next test launch scheduled for May this is a wait and see stock at this time.
30. Axon (AXON) is the maker of Taser as well as the bodysuits, cameras, and cloud software for officers across the United States. Phenomenal gains in this stock recently as well to start 2021. So many great stocks, so little money :).
Sold: Sold my Global Ship Lease (GSL) as that trade played out for a small gain to invest back into beaten down tech names as well as Chinese stocks at the end of the month.
The Materials Sector (Aim = 6% of my Stock holdings)
Stock | $30K | $300K | $3M |
$CLF | $480 | $4,800 | $48,000 |
% Portfolio | 2.0% |
31. Cleveland-Cliffs (CLF) is an Iron Range stock that acquired AK Steel at the end of 2019 and, more recently, announced the acquisition of ArcelorMittal (NYSE:MT) in late 2020 in a deal valued at $3.3B. Cleveland-Cliffs is well on its way to becoming a fully integrated steelmaker with clout in the U.S. A bipartisan infrastructure bill later in the year could do wonders for the iron and steel markets, but that is all hypothetical at this point and time.
Sold: Sold my Barrick Gold (GOLD) stock as I am tired of taking the hits even with the phenomenal dividend. I'm looking to re-enter the stock in a couple months when hopefully the selling pressure eases.
The Energy Sector (Aim = 6% of my Stock holdings)
Stock | $30k | $300k | $3M |
$RDS/B | $180 | $1,800 | $18,000 |
$PBR | $360 | $3,600 | $36,000 |
$HAL | $340 | $3,400 | $34,000 |
% Portfolio | 3.6% |
32. Royal Dutch Shell (RDS.B) is a leader in the oil industry with a dividend that management is looking to grow quickly after it slashed it earlier in 2020 due to COVID-19 concerns.
33. Petrobras (PBR) is a Brazil-based oil play with lots of potential if it can get past its scandal-ridden past. Unfortunately, Brazil President Bolsonaro recently named General Joaquim Silva e Luna to replace current CEO Roberto Castello Branco resulting in a huge crisis of faith in the company in its latest scandal. Can only be uphill from here I keep telling myself.
34. Halliburton (HAL) is a U.S.-based oil service company that dominates services in the North American market.
The Utility Sector (Aim = 5% of my Stock holdings)
Stock | $30K | $300K | $3M |
$NEE | $490 | $4,900 | $49,000 |
% Portfolio | 2.0% |
35. NextEra Energy (NEE) is a top utility play with a tremendous dividend which are the main features I look for in the Utility sector. It got slashed with the move to add further risk to my portfolio.
Sold: Sold my Dominion (D) and Duke (DUK) stocks in a transfer from more defensive names to more growth orientated names like NextEra Energy (NEE) along with wanting to add to my tech names like Apple (AAPL) and Xilinx (XLNX).
The Real Estate Sector (Aim = 3% of my Stock holdings)
Stock | $30K | $300K | $3M |
$AMT | $730 | $7,300 | $73,000 |
% Portfolio | 3.0% |
36. American Tower (AMT) is a premier U.S. cell phone tower company aggressively expanding globally across a few more continents. 5G evolution could be a lucrative tailwind for years to come. Can't think of a reason to add another real estate play so I just plan to keep adding to this holding over time.
Bonds (2% of my Stock holdings)
This asset class is currently satisfied by my mutual fund holdings.
My top 10 Holdings and Percentage of my Portfolio
Stock | Sector | % Portfolio |
Bitcoin | Financials | 7.2% |
Disney | Communication Services | 5.9% |
Apple | Info Tech | 5.4% |
MiMedx | Health Care | 5.1% |
Arrowhead | Health Care | 4.5% |
Finance of America | Financials | 3.8% |
Jacobs Engineering | Industrials | 2.6% |
Xilinx | Info Tech | 2.6% |
QUALCOMM | Info Tech | 2.4% |
American Tower | REIT | 2.2% |
Total % of Portfolio | ~41.7% |
Staying diversified across all sectors of the economy while making larger bets on your favorite stocks is a great way not only to beat the market, but have fun doing it as well. Stocks are one of the best ways to build wealth for retirement, and everyone should have the opportunity to share in the success of the best companies the world has to offer. Best of luck on another productive and lucrative year in 2021.
This article was written by
Analyst’s Disclosure: I am/we are long GIS, PG, PEP, RDS.B, PBR, HAL, GBTC, HSBC, RPLA, MDXG, ARWR, PFE, MDT, MNKD, SMMT, LLY, J, SPCE, AXON, CLF, NEE, AAPL, QCOM, DELL, XLNX, RBLX, DIS, GOOGL, TME, WWE, BIDU, TSCO, TSLA, BABA, MELI, AMT. 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)
Insiders have sold millions and millions since January, sales literally every other day for 3 months. Relentless selling. It looks fishy, the stock is wildly overpriced and the chart screams head and shoulders.
Never trust a used car salesman.Good luck.