Q4 ‘21 Review and Top 10 Holdings
Portfolio review and current behavioural focus
Performance
The performance of the portfolio has been just less than flat. The performance over the previous year (and essentially the same as YTD) has been good around 47%. For clarity, the way my brokerage accounts this performance isn’t quite true performance as I’ve contributed funds worth a couple of percentage points so feel free to discount 2 or 3% of performance.
For benchmark purposes, the S&P 500 and the Nasdaq has returned about 25% and 19% over the past one year period.
Performance for the quarter, and year to date has been relatively good but I don’t put much stock into that. This quarter has been painful for some investors. My portfolio was spared from too much of a drawdown and has held up for the most part. I’ll draw very little from this yet as it’s too short term. That being said, I do like to see that what I own is potentially more resilient through some rough times as I think survival is key to long term success.
Holdings
One of my goals over the past few quarters has been to focus on understanding businesses better, including what I already own, as opposed to only focusing on finding new ideas. I still take time to search for new ideas but I really want to be able to hold on to what I own for the long term and there will be plenty of time in the future to own new businesses. The other point here is that keeping track of of price is easy, keeping track of how the business is actually performing, without allowing price to dictate a narrative, is more time consuming but ever so important.
I really want to have low activity in my portfolio. For me, this exercise keeps me focused on that as opposed to over-analyzing quarterly returns as I suspect there is no significant insights for a time period this short. I’m generally happy with my ability to trade very little the past few months. In no particular order here is the current top 10 holdings:
Constellation Software
Berkshire Hathaway (reduced)
Topicus (added)
Alimentation Couche-tard
Altria
British American Tobacco
Dentalcorp
Patrick Industries
Copart
Vitalhub (added)
The only significant move I made this quarter was to sell a portion of the Berkshire position and add to the Topicus and Vitalhub position. Topicus remains a strong high quality business with great long term growth prospects compared to something like Berkshire. Vitalhub appears to be executing as they continue to announce new contracts and customers.
Still Fishing
While I’m quite happy with the portfolio as it stands, it is still fun, and I think worthwhile, to study other new prospects. I’ve tried to look more in the small and micro cap space for overlooked or under-followed names that large funds can’t buy due to liquidity and size issues. Leatt, Wecommerce Holdings and SDI Group PLC are a few that I’m watching and studying closely.
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