ATG Investment Fund: The Initial 7…

throwing dart

 

The ATG Investment team has finally gotten off its ass and opened its joint  investment fund.  On a monthly basis we will update the positions and share true performance of the fund in the “Current Portfolio” tab of this blog.  On April 17 we established initial positions in 7 different securities and allocated a total of 25% of the available capital to these stocks.  Over the next several months we intend to slowly build up the investment fund to approx. 80% invested in the market with 20% in cash as a buffer.  The investment allocations of each security are reflective of our perception of current price- for example, WWAV has a smaller allocation than ESV currently due to the recent run up in its price before we established an initial position.  If pricing dynamics change 30-60 days from now, we will adjust the allocation to try and take advantage of pricing and build a more favorable basis in any given security.   We plan to limit the total number of different investments at any given time to around 10.  Our logic is that its enough to provide meaningful diversification but not too many to lose focus or dilute the ATG team’s best overall ideas.

Without further adieu, below is the initial ATG portfolio:

 

ATG Portfolio- 4-20-14

 

OZM (Och-Ziff), ESV (Ensco), CLNY (Colony Financial), WWAV (White Wave Foods), and PFF (iShares Preferred Shares ETF) have all been discussed in prior ATG posts.  GOOGL (Google Class A) was a bit of an impulse, last minute add to the portfolio in light of their recent modest price drop.  Any portfolio should have some high quality tech exposure, and GOOGL is probably the most reasonably priced of the high growth names at 17x 2015 forward earnings.

VNM (Market Vectors Vietnam) is an ETF that tracks the Vietnamese stock market.   Both Maverick and moMANon have had the opportunity to visit the country before and are in agreement that this is our favorite emerging markets bet right now (and favorite southeast Asian cuisine option).  I’m sure an ATG post is forthcoming laying out our argument for the opportunity.

Overall we’re trying to build a portfolio that balances attractive yield (PFF, ESV, OZM, CLNY) with higher growth/ beta securities (VNM, WWAV, GOOGL) in hopes of beating the S&P 500 and earning positive returns even if the market ends down for the year.   We are also trying to stay true to the original ATG principal that any security we pick is one that we’d be comfortable holding for several years to ride out any wild, unpredictable  market moves.

 

As always, we welcome any feedback or thoughts as we build up the portfolio and share the performance publicly.  To avoid any misunderstanding from potential readers, I want to make it clear that the ATG Fund represents only a portion of the ATG team’s respective personal investment strategies.  Any responsible personal investment strategy should have diversification among various investment classes (stocks bonds, real estate, etc) and have a meaningful percentage of diversified index/ mutual fund holdings in addition to any individual securities.  For any readers who’d like to talk more about an overall investment strategy, write us a message and we’ll be happy to share our thoughts.

 

 

 

 

 

 

 

 

 

 

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2 thoughts on “ATG Investment Fund: The Initial 7…

  1. Curious if you are worried about being over exposed to “financial” companies with OZM CLNY and a majority of PFF’s holdings being financial stocks. They do appear to operate in different industries but was curious they highly correlated in terms of stock price movements. Looking at buying some PFF myself but wanted to get some additional feedback on it before buying. On a side note treasury markets have historically been the most volatile in May, which could make for a very interesting month holding PFF as well.

    http://www.zerohedge.com/news/2014-04-27/bofa-warns-treasury-regime-change-coming

    Thanks for any info!

    • Thanks for the good comment John. I agree the initial allocation is tilted a bit towards the financial side of things. It will probably balance out as it build fuller positions and fill out the 10 stock portfolio, but for now I like that sector. Also, they tend not to be highly correlated with each other. PFF moves with rates but volatility has been really low lately; OZM is a more opportunistic play that seems more sensitive to their own fund management and company developments than the market; CLNY is anchored to real estate and the most sensitive of the bunch to interest rates given its status as an MREIT and commercial lending platform. Good note on historical May treasury rate volatility- I’m hoping for a quiet Spring with more focus on corporate earnings than macro events. One last note on volatility- given how low the VIX has gotten recently, I think buying some volatility as a hedge could be a smart idea right now.

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