October 2022 - No more green
As my portfolio continues to take a beating from the macro environment, I have once again decided to consolidate my bets and double down on some of my highest convictions. This meant the department of one of my most discussed stocks in these monthly updates.
Changes to my portfolio this month
Selling out of Nvidia (NVDA) allowed me to average down on two key positions in my growth portfolio. This is a direct consequence of my portfolio suffering through these times. Unlike last month, however, I did not take a loss on this position.
Growth Portfolio
Overview
Unlabeled on the chart: Alphabet (1.4%), Adobe (0.7%) and Coinbase (0.1%).
Moves
On October 12th I increased my position in Unity (U) at a price of $30.06 per share, lowering my average to $59.78.
On October 21st I sold my entire holdings of Nvidia at a price of $123.16 per share, netting a return of 15.40%.
On the same day. one-half of these funds went into further increasing my position in Unity at a price of $28.40, lowering my average to $54.81.
Again on October 21st, the other half of the Nvidia sale went into increasing my stake in Taiwan Semiconductor Manufacturing Company (TSM) at a price of $63.42 lowering my average to $91.50.
Performance
While my Growth Portfolio continued to shred another 10.48% of its total value throughout October, the general market performed well, leading to massive underperformance.
Dividend Portfolio
Overview
Unlabeled on the chart: Orion Office REIT (0.2%).
Moves
A small automatic buy order of the Danish Invest Denmark Index ETF went through on the 8th - Which I aim to continue doing every month this year.
Performance
My Dividend Portfolio increased 7.74% in October, right in line with the general market and making up for last month’s sudden and unique drop.
Dividend overview
| Name (Ticker) | Received | Amount (USD) |
| Broadcom (AVGO) | Oct 5th | $20.35 |
| Realty Income (O) | Oct 17th | $13.84 |
| Taiwan Semiconductor Manufacturing Company (TSM) | Oct 17th | $35.30 |
| Orion Office REIT (ONL) | Oct 18th | $0.50 |
| Federal Realty Income Trust (FRT) | Oct 18th | $21.68 |
| Comparison YoY | $73.45 (Oct 2021) | $91.67 (+$18.22) |
Dividends received before taxes. Comparison to the same month a year prior.
Commentary & Review
October was a rough month for me, seeing my overall holdings continue to drop while the overall market recovered nicely. Much of the downturn can be attributed to Tesla (TSLA) which dropped significantly from the beginning of the month to the end. Despite delivering what in my eyes a fantastic earnings report (and call!) the stock also reacted negatively to these. Vehicle deliveries came in a little below expectations, whereas productions came in above. According to the company, this can be attributed to a change in strategy. With scale, Tesla no longer sees a benefit to rushing deliveries by quarter end for an arbitrary win, as shipping rates have now started to have a significant impact on margins. The new strategy is to avoid delivery hikes and ease the curve. I certainly do not mind. Tesla continues to execute well and the 50% YoY growth story remains. Many other positives surrounded the company this month, although none were able to drive the stock upward in October. Among the most interesting were the S&P upgrading Tesla’s credit rating to investment grade (BB+) on improving production and Musk officially confirming a delivery date for the Tesla Semi. Tesla now trades at P/E of 66.
This month also brought clarification to a topic I raised in last month’s update. Ironically, and as predicted, TSMC ended up rejecting Apple’s rejection of price increases. This solidifies TSMC’s position for me as one of the single most powerful companies in the world. Not even Apple (AAPL) can negotiate favorable terms in a time of struggle. This in combination with TSMC delivering another incredible earnings report, made me reflect on my portfolio and motivated the move, selling out of Nvidia in favor of doubling down on this holding. TSMC beat on revenue, guidance, and operating margin, while gross margin disappointed slightly.
I want to make clear that I have not lost faith in Nvidia’s future. I have merely decided to consolidate my semiconductor bets in trying times. I decided to my favorite and go with it. When I bought shares of both companies in 2020, I saw Nvidia jump significantly in a very short amount of time, doubling my investment. In hindsight I should have sold then, or when my number one reason for entering the stock was wiped away. But in owning the stock I came to understand the company more deeply and it became a much more difficult
decision. Ultimately the decision came down to what fit my portfolio better: TSMC is much more in line with the overall strategy I have now, which is owning healthy operations providing a steady stream of income to me through dividends. But I have little doubt Nvidia will continue to do well in the future.
My other big tech holdings like Microsoft (MSFT), Alphabet (GOOGL), and Amazon (AMZN) all took big hits following earnings. Amazon in particular dropped widely after hours, falling nearly to 2018 levels, closing in on my original entry price 4 years ago. I questioned this reaction as I did not see anything in the report out of the ordinary. Cloud growth missed expectations by 2%, which obviously is negative, but considering Amazon is still growing AWS at the pace that it is, with the market share it commands, I remain impressed. Since then, the stock has recovered slightly. In short, Amazon lowered guidance for the next quarter, Microsoft shared insight into just how slow device sales are going right now and Google makes a little less money from advertising. All short-term and fully expected results in the current environment, in my opinion.
Finally, we arrive at Unity where I continued to average down. As the stock dipped below $30 again, I made my first purchase of the month and as nothing changed, I bought again with what I had left over from the Nvidia sale, which thankfully netted me a nice sum of money. I am now happy with the size of my position (at this point in time) and will put future purchases on hold. Unity makes up more than 5% of my Growth Portfolio now, despite having dropped significantly. I want it to be a significantly sized position for me in a few years - and I largely expect that to happen through stock appreciation - not further purchases.
Dividends
Despite only having increased my stake in TSMC this month it still tops the list in terms of total payout for the month of October. My Growth Portfolio is still so relatively large in comparison to my dedicated Dividend Portfolio that even smaller positions win out in terms of size. TSMC’s yield is now above 3% as their share price has dropped and as they continue to pay out whatever they do not reinvest into R&D. With my increased stake in the company, October of next year should get me to the $100+ mark I aim for in terms of monthly dividends received.
Research & Goals
Most of my time this month has been dedicated to staying on top of Q3 earnings. Despite markets reacting negatively to all my major tech holdings, I find myself quite happy with the results. The long-term mission of each of my holdings remains intact.
Also this month, I have followed the final chapter in the Elon Musk/Twitter saga with excitement as his doings continue to have an outsized effect on my portfolio. I am happy to see most of the Twitter uncertainty now lifted. Much criticism still surrounds the deal and Musk’s plans with it going forward. I find his open approach to feature development exciting and shared my two cents last night in this Twitter thread:
As I decided to favor my investment in TSMC over that of Nvidia, some time was also spent assuring up-to-date knowledge on the Taiwan geopolitical situation. My thoughts remain the same: Despite growing aggression in China, Taiwan remains well protected by its significance to the world (thanks to TSMC) and the practical impossibility of an invasion without the destruction of this most valuable asset.
Watch List
Growth Portfolio
| Name (Ticker) | Conviction (Rank) |
| Embracer (EMBRAC B) | 1 --- |
| Sea (SE) | 2 --- |
| Meta (META) | 3 --- |
| Shopify (SHOP) | 4 --- |
| Palantir (PLTR) | 5 --- |
| MercadoLibre (MELI) | Contender |
Dividend Portfolio
| Name (Ticker) | Conviction (Rank) |
| Bank of Nova Scotia (BNS) | 1 --- |
| Costco (COST) | 2 --- |
| Elkem (ELK.OL) | 3 --- |
| JP Morgan (JPM) | 4 --- |
| Coca-Cola (KO) | 5 ↑ |
| Lockheed Martin (LMT) | Contender |
There have been no changes to my Watch Lists this month outside of Coca-Cola (KO) joining the list for the first time, in place of Digital Realty (DLR).
Goals
I have no plans to open new positions in my Growth Portfolio.
I do not plan on selling out of any more positions this year. (whoops)
In my 2021 year in review, I stated that I aim for a 35% return in 2022. I continue to strive toward this goal although I have accepted its unlikeliness. Currently, I am down 26.96%.
Over the long term, my goal is to slowly shift towards more stable positions and dividends on my journey toward financial freedom.
Disclaimer: I am not a financial advisor, the opinions expressed in this article are entirely my own – always invest at your own risk.
