5 Changes I Made to My Portfolio (Mid Year Review 2024) | Top 5 Changes I Made to My Portfolio

Summary

In this video, the speaker discusses strategic stock transactions in their portfolio, focusing on buying more of NRG due to its significant growth and high billionaire interest in energy stocks. They sold Caterpillar, replacing it with KKR for diversification, and swapped Ulta for Deck due to Ulta's underperformance and Deck's promising outlook. The speaker also shares lessons learned from value investing and the importance of following personal investment processes. Other stocks like Marriott and Palo Alto Networks were sold to consolidate the portfolio and reallocate funds to better-performing stocks, emphasizing the need for portfolio management and strategic decision-making.

Takeaways

• 📈 The speaker has made changes to their stock portfolio, buying and selling stocks based on market performance and personal strategy.
• 🛒 They purchased more shares of NRG, a stock that has seen significant growth over the past 6 months and year, with interest in doing more covered calls with the company.
• 🚜 Sold Caterpillar, which had good performance but was replaced with KKR, an asset manager, as part of a diversification strategy and due to long-standing interest in KKR.
• 👟 Bought Deckers Outdoors, known as Deck, replacing Ulta which did not perform well, reflecting a shift from a value investment that didn't pan out to a growing company.
• 💄 Expressed dissatisfaction with Ulta's performance, citing personal errors in selling timing and acknowledging a struggle with value investing strategies.
• 🔄 TransDigm (TDG) was acquired, replacing Marriott, as part of an effort to maximize gains and maintain a manageable portfolio size.
• 🏨 Sold Palo Alto Networks, taking profits due to perceived slowing growth, aiming to reallocate funds to other areas of the portfolio.
• 👧 Made changes in the speaker's daughter's portfolio, swapping Lululemon for Chipotle and Ulta for Netflix, based on recent market trends and personal preferences.
• 📊 Highlighted the importance of reviewing investment notes and being consistent with one's own investment process rather than trying to emulate others.
• 📈 Mentioned the recent stock splits of Chipotle and other companies, indicating a belief in the potential positive impact of such actions on stock performance.
• 📚 Offered to do a deep dive on the energy sector and why billionaires are investing in it, showing an openness to explore and share knowledge on specific market trends.

Q & A

What significant action did the speaker take regarding their stock portfolio?

The speaker bought and sold stocks in their portfolio, specifically adding more shares to NRG, selling Caterpillar and Ulta, and replacing them with KKR, Deck, and Netflix.

Why did the speaker decide to buy more shares of NRG?

The speaker decided to buy more shares of NRG because the stock has performed well, being up 52% in the last 6 months and 110% over the last year, and they want to do more covered calls with the company.

What was the speaker's reason for selling Caterpillar stock?

The speaker sold Caterpillar stock and replaced it with KKR because they have been interested in KKR for a while and believe it could perform better, despite Caterpillar's recent gains.

What mistake did the speaker acknowledge making with Ulta stock?

The speaker acknowledged being too patient with Ulta stock, holding onto it longer than they should have, expecting a recovery that never came, which resulted in a loss.

Why did the speaker choose to replace Ulta with Deck?

The speaker chose to replace Ulta with Deck because Deck has shown strong performance, being up 45% in the last 6 months and 84% over the last year, and they wanted to diversify their portfolio.

What was the speaker's strategy for managing the number of stocks in their portfolio?

The speaker's strategy is to keep the number of stocks between 10 to 12 to maintain manageability and ensure they can research and stay informed about each company.

Why did the speaker decide to sell Palo Alto Networks stock?

The speaker decided to sell Palo Alto Networks stock because they believe it is slowing down and they want to take their profits and invest in other companies that are performing well.

What was the speaker's reasoning for the stock split prediction of Chipotle?

The speaker had predicted the stock split of Chipotle based on their analysis and had mentioned it in a previous video, which turned out to be correct.

How did the speaker's daughter's portfolio changes reflect the speaker's investment philosophy?

The changes in the daughter's portfolio, such as selling Lululemon and Ulta and buying Chipotle and Netflix, reflect the speaker's philosophy of diversification and investing in companies that have shown recent strong performance.

What is the importance of reviewing investment notes according to the speaker?

Reviewing investment notes is important for the speaker as it helps them to reflect on their investment process, identify areas of strength and weakness, and make more informed decisions in the future.

What did the speaker learn about their investment style from the experience with Ulta?

The speaker learned that they are not particularly good at value investing, despite following the principles from books and doing their homework, and that they should stick to their own investment process.

Outlines

00:00

📈 Stock Portfolio Adjustments and Sector Insights

The speaker discusses their recent stock transactions, highlighting the purchase of more NRG shares due to its significant increase in value and the interest of billionaires in energy stocks. They express willingness to delve deeper into this sector if prompted by viewers. The speaker also details the sale of Caterpillar shares, which have performed well, and their replacement with KKR, an asset manager, reflecting a strategic move to diversify beyond tech stocks. The summary includes the rationale behind these moves, emphasizing the importance of diversification and the speaker's personal investment strategy.

05:02

📉 Reflecting on Investment Decisions and Portfolio Rebalancing

In this paragraph, the speaker reflects on their investment choices, particularly the sale of Ulta and Marriott stocks, which did not meet expectations, and the purchase of TransDigm Group and the sale of Palo Alto Networks. The speaker admits to being better at following their own investment process rather than strictly adhering to value investing principles. They also mention the desire to keep their portfolio manageable by maintaining between 10 to 12 stocks, which involves selling off some stocks that are slowing down or not fitting the portfolio strategy. Additionally, the speaker discusses making changes in their daughter's portfolio, including the switch from Lululemon to Chipotle and from Ulta to Netflix, based on recent performance and future potential.

Keywords

💡Portfolio

A portfolio in the context of the video refers to a collection of financial assets such as stocks, bonds, and other securities held by an individual or entity. The video's theme revolves around the speaker's personal portfolio management, discussing the buying and selling of stocks within this portfolio to optimize performance and diversification.

💡NRG

NRG is the ticker symbol for a specific energy stock that the speaker discusses in the video. The term is used to highlight a successful investment, as the stock has seen significant growth over the past 6 months and year. The speaker's decision to buy more shares of NRG is tied to their strategy of increasing covered calls with this company.

💡Caterpillar

Caterpillar, often abbreviated as 'CAT', is a stock that the speaker decides to sell in their portfolio. Despite its performance increase over the past year, the speaker chooses to replace it with KKR, an asset manager, to diversify their investments and follow a different investment strategy.

💡KKR

KKR is an asset management firm that the speaker decides to invest in as a replacement for Caterpillar. The decision is based on the speaker's long-term interest in the company and their desire to diversify their portfolio beyond tech stocks.

💡Value Investing

Value investing is an investment strategy that the speaker mentions they are not particularly adept at, despite having studied and applied its principles. In the context of the video, the speaker reflects on their experience with Ulta, a stock that did not perform as expected, illustrating the challenges of value investing.

💡ULTA

ULTA is a stock that the speaker decides to sell due to its poor performance over the past year, reflecting on the difficulties of value investing and the importance of selling at the right time to avoid losses.

💡Deckers Outdoors

Deckers Outdoors, represented by the ticker symbol 'DECK', is a company that the speaker chooses to invest in, replacing Ulta in their portfolio. The decision is based on DECK's strong performance over the past 6 months and year, indicating a promising investment opportunity.

💡TransDigm Group

TransDigm Group, with the ticker symbol 'TDG', is a stock that the speaker decides to replace in their portfolio. Despite its positive performance, the speaker opts to sell it and invest in another company, aiming to make more significant gains and maintain a manageable number of stocks in their portfolio.

💡Palantir Technologies

Palantir Technologies, referred to by its ticker symbol 'PLTR', is a stock that the speaker decides to sell entirely. The speaker believes the company is slowing down and decides to take profits and reallocate the funds to other investments, demonstrating a strategy of profit-taking and portfolio rebalancing.

💡Diversification

Diversification is a key concept in the video, as the speaker discusses the importance of having a varied portfolio to spread risk and maximize potential gains. The speaker's actions, such as replacing Caterpillar with KKR and DECK with TransDigm, reflect an effort to maintain a diverse range of investments.

💡Stock Split

A stock split is a corporate action in which a company increases the number of its outstanding shares by issuing more shares to current shareholders. The speaker mentions Chipotle and Walmart as companies that have recently undergone stock splits, suggesting that such events can be positive for investors and the company's stock price.

Highlights

The speaker begins buying and selling stocks in their portfolio twice a year, with today being one of those days.

NRG Energy stock has performed well, with a 52% increase in the last 6 months and 110% over the last year, prompting the speaker to buy more shares.

Billionaires are also investing heavily in energy stocks, suggesting a potential deep dive into this sector.

Caterpillar stock was sold, despite a 133% increase in the last 6 months and 36% over the last year, to be replaced by KKR, an asset manager.

KKR has been on the speaker's watch list for years, with a 28% increase in the last 6 months and 90% over the last year.

The speaker emphasizes the importance of diversification in their portfolio, balancing tech stocks with investments in other sectors.

Deckers Outdoors Corp (DECK) was bought, replacing Ulta Beauty, which did not perform well for the speaker.

DECK has seen a 45% increase in the last 6 months and 84% over the last year.

The speaker regrets not selling Ulta Beauty sooner, acknowledging greed and a lack of adherence to their own investment process.

TransDigm Group (TDG) was bought, replacing Marriott International, which has seen a modest 7% increase in the last 6 months and 31% over the last year.

TDG has performed well with a 28% increase in the last 6 months and 50% over the last year.

Palantir Technologies (PLTR) is being sold due to slowing growth, despite a 14% increase in the last 6 months and 32% over the last year.

The speaker aims to keep their portfolio manageable, preferring to have 10-12 stocks rather than 18-19.

Lululemon was sold from the speaker's daughter's portfolio, replaced with Chipotle, which has seen a 37% increase in the last 6 months and 46% over the last year.

Netflix was also added to the daughter's portfolio, with a 36-38% increase in the last 6 months and 53% over the last year.

The speaker reflects on their investment process, acknowledging that they are not great at value investing despite following the teachings of experts.

The speaker predicts potential stock splits for certain companies, having previously correctly predicted splits for Chipotle and others.

Transcripts

there are only two times per year where

I start to buy and sell stocks in my

portfolio today was that day so what did

I buy what did I sell and why did I do

it let's go ahead and break it down so

here's everything that I bought and sold

and I'm going to give you a little bit

of a description as to why let's first

start off with

NRG I've talked about the stock before

the stock has done quite well and all I

did was buy more of NRG is up 52% in the

last 6 months and up 110% over last year

at the time that we are doing this video

billionaires have also been buying a lot

of energy stocks if you want me to do a

deep dive on what is going on in that

sector and why they are snapping up

shares of companies like NRG just let me

know in the comments cuz I am interested

in that topic as well but I just added

more shares there I want to do more

covered calls with this particular

company so I need to buy more shares

myself so that's all I did there

caterpillar though I let go of okay let

go of caterpillar but not for the

reasons that you think caterpillar is

fine it's actually up 133% in the last 6

months up 36% over the last year I only

made about 11% only 11% is fine it's

definitely good in a normal year I

replaced caterpillar with KKR KKR is an

asset manager think of it sort of like a

golden Sachs depending on who you ask um

so caterpillar gone KKR is in KKR is a

company I've had on my watch list I feel

like for like two or three years now

just finally pulled the trigger there

they're up 28% in the last 6 months and

up 90% over the last year really should

have done this a long time ago but you

know had to finally make that move I

just feel like I could have done a bit

better there though caterpillar does pay

a solid dividend I do want to keep in

mind this all in the public portfolios

are everybody can see all these moves

and see what I own but I always want to

try and be a little Diversified because

I already own a bunch of tech stocks

already okay so I can always just get

more Tech right but I want to try and

stay Diversified so wanted to do

something you know in energy wanted to

do something in finance and you know

kind of be off the beaten path while

also still owning apple and alphabet and

all those companies next year is deck uh

deck is the ticker symbol but deck are

Outdoors we talked about this company

told yall about it last week okay I

broadcast this one but it is up 45% in

the last 6 months and up 84% over the

last year I replaced it uh or I picked

this one up and kicked out Ulta Ulta did

not do well for me it did not work Ulta

did not work and I'm I'm a little mad at

it so Ulta was down 21% over the last 6

months and down 18% over the last year

two things wrong with Ulta for me okay

really three things when I think about

it uh number one Rong with Ulta it was

up for a little bit I should have sold

it when I was up I got a little greedy

um I need to check the data to see

exactly how long I had it I feel like

I've had it for a year and a half now um

but I bought Ulta Ulta had earnings

shortly after it Tanked

started to come up I should have sold it

like right at that six-month Mark I

didn't I told myself hey it's a value

company the numbers were good and they

were just continue holding it thinking

it was going to you know be positive and

I was going to take whatever gain that I

was going to get that gain never came so

should have sold it the minute I could

have I did not I was a little too

patient the stock never really recovered

that's number one number two I just

think again this goes back to process

just yesterday

just yesterday we talked about the three

most important things when it comes to

investing last week we talked about the

importance like the the two or three

tiny habits it comes uh tiny habits you

need to know when it comes to investing

I talked about going back and reviewing

your notes when it comes to investing

and trading the notes here tell me okay

after just reviewing my notes and

reviewing and reviewing I am not great

at Value

investing okay I read the book

y'all saw me read the book okay took

notes read the book went back read the

chapters I've done all the homework I'm

just not great at it and the interesting

thing is when I go back and I'm staring

at my notes here right and I look at and

I still have the spreadsheet on what I

did when I looked at Ulta and what the

homework was for Ulta and all the stuff

I notated and all that kind of stuff and

we were right you know quot un quot um

but it just didn't work and not every

time I do it but most of the times I I

follow the value investing things in

that book and what I follow just doesn't

work for me and when I follow my own

process my Miss is Caterpillar so I miss

with caterpillar made 11% that was my

Miss and I miss with this and lose 20

something per. so that's not to say that

I'm better than Warren Buffett or

anything like that it's not it's just to

say I should follow my I should be me

and try not to be somebody else is what

that really means uh because I miss with

with uh Intel okay so that's not to say

that I don't miss because I do but going

back to that consistency piece if I miss

I want to miss the way I want to which

is going to be that 11% more often than

not um so B didn't work for me that's

not the only time I've tried value

investing with this exact same process

and this tends to to be the result with

Ulta and Ulta like companies so didn't

work for me next here is trans dium

tdg um I picked up this one and is up

28% in the last 6 months up 50% over the

last year I am replacing it which means

I am

selling uh Marriott Marriott is up 7%

over the last 6 months and up 31% over

last year Marriott is Fond nothing wrong

with Marriott we did talk about Marriott

said Hilton was better from a stock

perspective um but I just think I want

to make a little more okay don't want to

be greedy I want to make a little more

so selling one picking up the other so

we're just doing a flip-flop here in

this particular case um next here I'm

selling po Alto networks selling pal

outto networks um just selling getting

rid of it all together is up 14% the

last 6 months up 32% over the last year

I think pal Alo networks is fine I do

think it slowing down a bit not saying

it's falling off but I am taking my

profits and I'm going going somewhere

else there's two reasons why I'm doing

this number one because it is slowing

down again I'm not saying this fall off

the map I'm not saying it's crashing

okay I'm not saying that but um similar

to like a what was that Hershey that we

talked about not too long ago like it

was great then took our gains gone

somewhere else I'm I'm kind of doing

that now where you know only at 14% I

say that in air quotes because it is

still pretty good but I'm going and

taking my gains and going somewhere else

other reason why too is

because as I'm buying and selling and

doing all the stuff in my public

portfolio I don't want to have 18 or 19

stocks okay I want to keep it between

like 10 to 12 cuz it's you know I have

to research all these companies know

what's going on with all these companies

and having

15 20 that's that's too many right I

want to keep it relatively small keep it

manageable and know exactly what is

going on so I want to trim things down I

have too many right so selling that all

together taking that money and just

redistributing it selling it and then

just investing in everything else and

just pushing those dollars upward is

going to be helpful also having more

money in those other companies that are

doing well is going to help the entire

portfolio across the board so that is a

thought process there um two other

smaller moves this is in my daughter's

portfolio everybody else in the family

kept all the stocks everybody else was

fine um she had Lululemon we had talked

about Lululemon in the previous video

this week down 41% in the last six

months down 20% of last year she you

know was born in the pandemic stock was

doing well we got rid of it gave her

Chipotle instead yall know how I feel

about Chipotle I own Chipotle uh

Chipotle is up 37% in the last 6 months

up 46% of last year we talked about them

doing their stock split and how good

that could be for the company and how

well the company was doing uh and then

Netflix uh she had Ulta as well so we're

taking out Ulta for her or did take out

Ulta for her and picked up Netflix again

Netflix up 36 38% in the last 6 months

up 40 I'm sorry up 53% over the last

year now when it comes to Chipotle again

they were one of the few companies I was

going to say one of the few one of the

many companies that did a stock split

here pretty recently including Walmart

now I was one of the few people maybe

one of the only people call what you

want but one of the few people um that

did predict that they were going to do a

stock split and in that original video

that wasn't the only company that I said

hey they might do a stock split actually

did it land research Corp with another

company that I said in that video that

happened to do a stock split as well so

I did a follow-up video about some

additional companies that could announce

a stock split here pretty soon if you

want to know what companies might be

next in terms of stock splits you want

to check out this video right here