Initiated a small position in UTX

Following my previous article on United Technologies, the company has been on my radar for a while because I liked the history of this company in both expertise good stewardship from management and the future spin off in 2020, that should create further value for share holders.

UTX is now a new tier 2 holding ( around 2% of my portfolio)

utx logo


you can find all needed information about the company under the link beloW


United technologies info


Spring cleaning on my portfolio was due

When I decide to acquire shares in a company I am interested in I usually try to hold them for as long as possible because I am satisfied with the risk reward at the time of purchase. However sometimes the market gives you opportunities that changes the landscape of your investment thesis and you have to be ready to change or reshuffle your portfolio. That doesn’t mean you have to liquidate half of your portfolio and buy other companies, it means nothing it wrong with some spring cleaning :-).

So I decided to sell the following minor holdings in my portfolio to raise cash for some future targets.

positions sold :

CVS : I sold this position ( at a minor capital loss) because I was wrong about my investment thesis for this giant healthcare pharmacy name. I believed they would be able to keep growing their franchise & reward there shareholders with dividend raises and share buybacks, this has unfortunately been a 10 year treasury bill substitute for me and  I had to accept the inability of management to make meaningful decisions to spur capital gains.

WBA: Same logic for Walgreen boots alliance, a competitor that you find in many dividend ETF including VIG.


Both of those Pharmacy names have low profit margins and the mistake I have made is to believe that volume sales would compensate for it. No matter how big a company is it doesn’t automatically translate into strong economic moat


PFE: I sold Pfizer with a 40 % capital gain on the position & dividends I have received for the last 3 years now. I had to sale to raise cash for upcoming opportunities which I believe have better potential and stronger moat.

DIS: I sold my small stake I had in Disney, again not because I don’t like the brand name or management capacity to do fairly well but because I am targeting new opportunities that I believe will do better. I sold the position to a very small capital loss offset by the dividend I have received for the last few years.


What are my Targets now that I have raised cash ?

MMM: I have been looking forward to initiate a position in this company for some time now, I missed the last drop at around 180$/share but I am hoping to have the chance to initiate at around 185-190$ share. Sure there is going to be headwinds for this company because they do have a good portion of their sales outside the us but the product portfolio has always been in demand and I am confident I will do well in the long run.

MCO: Moody’s has been in my bucket list for a while now because companies need to have a credit rating it is just not optional. This is a growth stock and it has very little exposure to macro headwinds which is a + & it is in a duopoly position.


How to manage your portfolio exposure

There are a few good reasons why most professional well known portfolios do not go over 5% of exposure on any given stock. Algorithm and long term statistical data point to a specific way to preserve your capital and balance your risk reward variable.

Below are some of the rules that helped me generate around 20 % annual return for the last few years.

  1. Rule number one : do not have more than 5% exposure on any given stock.
  2.  Rule number two: do not have more than 20 % exposure on any given sector ( example Energy)
  3.  Rule number three: Do not fall in love with a growth stock. If this stock goes from 5% of your portfolio to 15 % in 2 years, be disciplined and sell some of it to put the exposure back to 5%. And proceed to buy another stock with the capital gain.
  4.  Rule number four: Embrace major pull backs, if one of your stock plunges 40 % in 8 weeks because of non sense short term fears, buy more of the stock. Chances are the stock will rebound and you will make more money over the long run.
  5.  You do not need to read to much specialized media, it will probably make you sell a stock at the wrong time and remember  those websites want to sell subscriptions and publicity ads. Concentrate on the balance sheets of the companies you are holding.

30 stocks is enough

Today I would like to give my opinion about the number of stocks that is needed to be well diversified in order to achieve a good long term total return and control the variance of your capital.

Let us take a few examples of well known portfolios.

  1. Vanguard Etf VIG : the top 10 holdings are vig etf

As you can see those major holdings are taking around 1/3 of the total portfolio.

vig 2

the next 20 names is adding another 35 % of the portfolio, so the first 30 names are really doing the heavy lifting. This Etf has 182 names but the remaining 150 holdings are in % very small and I really do not see how having that many holdings would make a big difference in terms of capital preservation and long term total return.


2) Let us take a look at Warren buffett holdings

warren buffett

His top 10 holdings are at 74.72 % of the total portfolio, now I am not at ease myself with that much concentration, but when you look at this investor track record in wealth creation we have to admit he knows what he is doing and he has proven so in a long period of time.


3) This one is from a friend I know who is also a very successful retired multimillionaire, who build over 30 years a very stable portfolio. 


charles 2

So to summarize 30 stocks is enough if you would like to build a successful well balance portfolio that will create wealth in the long run.


Mr Bogle Legacy

Dear Investors,

We recently lost one of the most prominent and well known investor of the 20th century. See below link for the summary of this visionary.


mr bogle

Mr Bogle legacy


Although I have not agreed with all his rational, most of his logic concerning passive investing through low cost ETF stands true over long periods of time just as basic mathematics will remain in place over centuries.


Blog at

Up ↑