LONDON — In a month when the NASDAQ broke above 8,000 for the first time and Emerging Market jitters resurfaced in the wake of Turkey’s well documented difficulties, our portfolio posted extraordinary growth. Eight of its nine constituents rose in price, with the overall return for South Africans aided by a sharp decline in the Rand. The result was an improvement in the US Dollar value of the portfolio from $372,845 to $393,645; with a sharp increase in the Rand value from R4.9m to R5.4m. That has lifted the annualised return to 41%. The portfolio was established in December 2013 with seed capital of $200,000. – Alec Hogg
Highlights:
Apple – The house that Steve Jobs built grabbed the global spotlight in the past month by delivering a strong set of quarterly results that helped it to become the first public company to reach a market capitalisation of $1 trillion (one thousand billion or one million millions). The quarterlies were warmly welcomed by Wall Street with Apple’s share price rising 5%, its biggest one day increase in years. Over the month as a whole the price is up $20 a share, or over 10%. Part of the reason for the resurgence in investor enthusiasm is a cash pile that has grown to $243.7bn and which because of US tax changes, is now available after being repatriated to the home country. Of this cash mountain, $100bn has been earmarked for share repurchases. The Oracle of Omaha Warren Buffett was among those celebrating Apple’s latest milestone. Buffett having bought into the stock during the first quarter of 2016 when he acquired $1bn worth of Apple shares at $99 each. Since then, his enthusiasm for the business has grown, with Berkshire’s investments in the past two years now exceeding $30bn, including $2.5bn invested during the three months to end June 2018. Apple is easily the biggest single share investment by Buffett’s company, whose exposure now exceeds $50bn. At 5% of the issued equity, Berkshire is Apple’s second biggest shareholder behind the Vanguard ETF.
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Berkshire – Outside of its Apple gains, quarterly financial results released on August 4 gave the share price of Berkshire Hathaway itself a boost. Operating earnings jumped from $4.1bn to $6.9bn with the cash pile rising to a new high of $111bn, giving Warren Buffett and his two portfolio managers lots to play with. One of these lieutenants, Todd Coombs, stirred excitement in India after he invested around $280m of Berkshire’s money in acquiring 4% of ONE97 Communications, parent company of that country’s largest mobile payments business PayTM. Berkshire is in good company, joining investors which include Japan’s Softbank and China’s AliBaba.
