Portfolio
Links to key posts are grouped by investment themes below. Not financial advice.
Commodities
Uranium is trading below its cost of production. This lesser known energy fuel with bad PR has massive upside, as evidenced by the prior cycle. The market is tiny and yet it’s responsible for 10% of electricity generation worldwide.
Copper is one of the best fundamental stories in commodities. There is just not enough supply to meet growing demand for the base metal. However, the leading copper miners generate tons of cash at the incentive price required to bring new production capabilities to the market.
Thermal coal is as important as it is hated. In a world of scarcity, it makes sense to own multiple sources of energy. With Glencore, investors are long reality but they are also long electrification.
JSW is the largest met coal producer in the EU. The stock trades for less than cash so this idea is best described as too cheap to ignore.
Gold is the ultimate portfolio diversifier because it’s outside of the financial system. Precious metals tend to do well when confidence in monetary authorities fades. Gold is under-owned and has been a frustrating trade for most investors.
Emerging markets
Poland, Mexico and Singapore offer investors key regional exposure to emerging markets. Their financial exchanges are investable and pay attractive dividend yields. Those businesses are monopolies and they are gushing free cash flows.
Brazil is a significant commodity producer. Its energy and material sector drive the country’s economy. The market is discounting much more political risk in Brazil than other places. National oil company Petrobras currently pays a 40% dividend yield.
Ashmore is a leading EM asset manager. The CEO is the company founder and owns 30% of the stock. The business is resilient, capital efficient and cashed up. Ashmore’s AUM are bound to increase when capital flows back to EM.
Human vices
Nintendo is the biggest value in gaming stocks and arguably the most undervalued brand in the world. The market does not appreciate the changes that have taken place since the Switch era started. Nintendo is now a superior business.
Cannabis stocks are a great speculation because of the federal legalization catalyst. Until marijuana becomes legal, the industry is starved of capital and retail investors have an edge. Plus, it’s a growth market and the opportunity is huge.
Playboy is just an embarrassing pick at this point. The share price has collapsed and management turned out to be untrustworthy. In January (2022), the thesis was: buy a fast growing business with a world-class brand at 2011 valuations.
Evolution is the leading B2B provider of online casino systems. The company is miles ahead of competition, the business is well-managed and has a lot of runway, especially in Asia and north America. Besides, the financials are extremely strong.