Portfolio Review - December 2023
Portfolio performance at the end of Q4
Welcome back to the Wolf of Harcourt Street Newsletter.
Every month, I'll provide you with an update on my portfolio, including all of the transactions, the current allocation, and my buy list. In addition, I'll share a recap of the articles you may have missed from the previous month.
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First off, Happy New Year to you all. You'll notice that there has not been any newsletter over the past couple of weeks as I took some complete time off and have been on vacation. After some downtime, I am refreshed and energized again to attack 2024 in search of outsized returns. But first, let's take a look at December and how the portfolio performed in Q4.
I sold my full position in Cloudflare (NET) and Shopify (SHOP) as part of my 2023 tax planning strategy. The recent sales of Fiverr (FVRR) and DocuSign (DOCU) resulted in capital gains losses. Selling Cloudflare and Shopify allowed me to realize capital gains, offsetting these losses and avoiding taxes. Additionally, I believe both Cloudflare and Shopify might be somewhat overvalued. For instance, Cloudflare trades at a price-to-sales ratio of 23. If either experiences a decline in 2024, I will reconsider entering the positions.
I added to my positions in the following:
Just as management continued to buy back its own shares as part of the EUR 400 million buy back program, I have been following suit and adding to my position. At the start of December, it was still possible to purchase Evolution for less than 18 times forward earnings, despite the stock appreciating nicely in December.
The full Evolution investment thesis is linked below for anyone that missed it.
I didn’t open any new positions during the month.
Portseido is the tool that I have been using to track my portfolio for a number of years. I really like the charts that it produces and how it tracks performance. They also added a feature to automatically track dividends too. To top it off, it is effortless to update for new transactions. The team have kindly given me an affiliate link so if you would like to sign up you can click here.
Q4: 17.8% vs S&P 11.4%
YTD: +34.3% vs S&P +24.1%
Trade Republic is the name of the investment broker that I use. The platforms combination of low fees, accessibility, fractional share options, and regulatory backing make it a reliable choice.
From 1 October, Trade Republic will double its interest on uninvested cash from 2% to 4% per annum, paid monthly. This is one of the most competitive rates on the market for European investors.
Stocks that are on my radar to add this month:
Auto Partner (APR.WA) - APR is a new position in my portfolio and I took the initial starter position when the stock pulled back to the 50-day moving average before it reported Q3 earnings. After hitting a new ATH in December, the stock has pulled back to the 50 day moving average. After raising some cash as part of tax harvesting, I expect to increase my position in January.
In Case You Missed It
Some of the articles you might have missed during the past month:
Q4 was a great quarter for the portfolio in terms of performance. I finished the year outperforming the S&P by 10%, which obviously makes me really happy.
One consequence of this outperformance is that many of my positions have seen significant gains, and I haven't identified as many obvious opportunities. Consequently, I've maintained a cash position of 3.6% heading into 2024. The number of portfolio holdings is down to 18, the lowest in many years. I am happy with the level of concentration, but it also gives me the flexibility to add new positions in 2024 if opportunities arise similar to Adyen in 2023.
After its parabolic run, doubling off the lows, Adyen is now my second-largest position. MercadoLibre remains my largest holding by a considerable margin, with the stock returning +86% in 2023. These two positions have been significant drivers of my outperformance in 2023.
A comprehensive 2023 year-in-review will be released later in January, covering topics including key learnings.
Here's to a profitable 2024 for all subscribers!
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Wolf of Harcourt Street