Weekly Roundup 2019 CW 08

Swedish television (SVT) said it had uncovered documents linking Swedbank to a money laundering scandal involving Denmark’s Danske Bank. Swedbank shares, having recorded their biggest intraday fall since the financial crisis on Wednesday with an almost 14% drop. The shares were down a further 9.2% at 165.2 SEK at 1055 GMT on Thursday. Swedbank shares closed at 171.40 SEK on Friday.

SVT said $26 million of the suspicious funds that were linked to tax fraud uncovered in 2007 by Russian lawyer Sergei Magnitsky. Mr. Magnitsky died in Russian imprisonment in 2009 after he was detained on charges related to the fraud he uncovered. The funds transferred via companies suspected of money laundering in the Danske Bank scandal, SVT reported.

Berkshire Hathaway Inc released their annual letter. Conglomerate swung to a $25.4 billion loss in the fourth quarter due to an unexpected write-down at Kraft Heinz and unrealized investment losses. Mr. Buffett in his letter offered no hints about who will eventually succeed him as CEO. But he did offer praise for deputies Ajit Jain and Greg Abel. He says that decisions to elevate the two men last year into more prominent roles “were overdue.”

Mr. Buffett has traditionally encouraged shareholders to pay attention to Berkshire’s book value over its market value, but he said in the letter that market value is now the more relevant metric.

The U.S. markets held closed on Monday for the Presidents’ Day.

US Market Outlook

Markets edged higher this week as investors remain hopeful that an essential trade deal can be reached between the U.S. and China. However, while there are hopes that an agreement can reinvigorate global growth, we must weigh this against several U.S. economic reports that meaningfully missed expectations this week, including existing home sales and durable goods orders. That said, these reports are backward-looking, and a trade deal could very likely be the catalyst needed to get business investments going again to keep up with a resulting increase in global demand.

Treasury yields were relatively unchanged at around 2.65% while gold prices held above $1,300 per ounce. The dollar weakened slightly versus the euro while oil ended the week higher, with WTI prices hitting their highest level for 2019 as investors speculate that OPEC+ will successfully reduce the global supply gut and a U.S./China trade deal will help reinvigorate future demand expectations.

On Thursday, The Commerce Department reported that new orders for manufactured durable goods increased 1.2% in December to $254.4 billion, following a 1.0% advance in November (revised up from +0.7% previously reported).

Lastly, on Thursday, the National Association of Realtors (NAR) reported that existing home sales — completed transactions for single-family homes, townhomes, condominiums, and co-ops — dropped 1.2% in January to a seasonally adjusted annual rate of 4.94 million. With January’s reading, which was the lowest since November 2015 and far below expectations of a 0.2% advance to a 5 million unit adjusted sales rate, existing home sales are down 8.5% from the same time last.

The portfolio

Portfolio CW8 agains SIXRX
Portfolio in numbers

The Swedish krona weakened against the currencies in my portfolio giving a tailwind of 0.69%. I moved some liquidity from Avanza to Degiro in order to perform some of the trades.

I am 10.06% behind ATH from last year.

Transactions

I reentered NextEra Energy, Inc (NYSE:​NEE) which I wrongly exited a couple of weeks ago. NextEra generates more than 97% of its power from natural gas, nuclear, wind, and solar. In some senses, the valuation case for NextEra is relatively simple. Management projects that earnings per share will grow at 6% to 8% a year through at least 2021. The dividends per share are expected to increase 12% to 14% annually from a current base of $4.44 (for a yield of about 2.5%). If that happens, NextEra is very likely to be a market beater.

I exited the fund Fidelity Switzerland A-Dis-CHF and reallocated into two ETF´s reflecting the Swiss stock market. With this transaction, I am lowering the management charges from ≈2% to 0,2%-0.25%. In this trade, I opened positions in UBS ETF (CH) SMI® (CHF) A-dis and UBS ETF (CH) SMIM® (CHF) A-dis. The positions will together weight about 7% in the portfolio.

Finally, I added to ETFS Physical Silver (PHAG). After this trade, my silver positions is about 5.4% of the portfolio value.

After I performed these trades my cash position in SEK is lowered to 7.6%.

The depots in the portfolio

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