Portfolio update - Q1 2023
This is your first portfolio update, summarising the recent moves I've made. I'll endeavour to put these out promptly following any changes, and this one covers the two purchases I made today.
In addition to these portfolio updates, I'm going to try and put out more frequent but shorter updates on my holdings. An upcoming example will be takeaways from the Ecora Resources AGM I'll be attending next week in person, and the Warner Bros Discover AGM I hope to attend virtually. More generally, these are likely to coincide with earnings releases or other significant events.
Today I added to a couple of positions, namely FSTA and TBLD, with the latter now being my largest position by a wide margin.
The higher level of concentration in tinyBuild is a function of my increased conviction in the investment. They say you don't truly know a company until you own it, and I've certainly found this to be true here. In the time since opening my initial position, my confidence in the quality of the business has grown, and along with it, the perceived asymmetry between the upside and downside scenarios. With regard to the latter, I see the company as being particularly resilient to any general economic downturn - a possibility looking increasingly likely.
Business resilience is also a key motivation for adding to Fuller's, as the company has a proven track record of sailing through economic downturns by dint of its premium positioning. Provided we don't have any more mandated lockdowns, I expect the company to weather any storms without issue.
If we do head into a recession, it's quite possible that both companies will see a boost to their share price once the market realises the underlying businesses have been relatively unaffected. This therefore seems an opportune moment to add to these positions.
My conviction in my other holdings remains fully intact. I'm confident they will all be able to ride out any turbulence as they are well managed, resilient businesses with strong balance sheets and plenty of liquidity. However, I do see their earnings taking a hit during a cyclical downturn, likely, in turn, to depress their share prices further, and so, despite them all being very attractively valued right now, I'm going to hold off making incremental purchases in favour of the aforementioned duo.
