tag:blogger.com,1999:blog-21548322293216093372024-03-13T07:38:19.615-07:00An Eighth Wonder Investing JourneyUnknownnoreply@blogger.comBlogger28125tag:blogger.com,1999:blog-2154832229321609337.post-52324612547122066972016-01-28T11:39:00.001-08:002016-01-28T13:19:50.899-08:00Status JanuaryHave been a while since I last wrote, and I am sorry for that. Comes from the reason that I got a new position at my work and it has been a lot of new stuff to learn and really go into depth on some things which I have just touched in the past. <div><br></div><div>I guess it haven't passed anyone but the year has started shaky in a very volatile market (<i>yes, I love it)</i>. </div><div>I had the opportunity to increase my share in some of my beloved companies, stated below:</div><div><br></div><div>-Protector Forsikring (2 times)</div><div>-Handelsbanken</div><div>-Avanza Zero</div><div>-Hennes & Mauritz</div><div><br></div><div>Protector released Q4 numbers last week and they are as always delivering, expecting a GWP growth on 22% during 2016.</div><div><br></div><div>Hennes & Mauritz announced Q4 numbers today and met analyst expectations on everything except the dividend increase from 9,75 SEK to 10 SEK. The stock fell -5% today after the announcement, which I think is an overreaction as always from Mr. Market. -maybe I buy some more in the upcoming weeks.</div><div><br></div><div>The savings is going on as normal transferred 25 000 SEK (2,75K €) on the 25th to my savings account.</div><div><br></div><div>Besides this I am working on a new report on a company which I hope will be published this weekend.</div><div><br></div><div>Stay tuned,</div><div>EWI</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-11515062515655333642016-01-04T10:08:00.001-08:002016-01-04T10:09:51.880-08:00First working day of 2016There was the first day of 2016 over when the markets had open, and the long waited market correction is here. Can't say something else than that I love it, I am actually way more happy when the market goes down then the other way around.<div><br></div><div>I bought some Hennes & Mauritz after Deutsche Banks announcement of their lower target price, came in close to ATL today at H&M. Will be a good position to have for 10+ years.</div><div>I also got some Swedish index funds (Avanza Zero), which will be a good balance to my stock portfolio.</div><div><br></div><div>Chipotle is still falling, -6% at the moment. Would love to get some more, but the portfolio is to heavy weighted at Chipotle, so can't. </div><div><br></div><div>Besides the stock market it was the first day at work after the vacation, and it went good. Lunch box of course and no spending at all. Perfect start at work for 2016.</div><div><br></div><div>Now will I make spaghetti bolognse to a total cost at 8,6 SEK (approximately 1 USD) per meal. Loving it!</div><div><br></div><div>Hope you had a great day!</div><div><br></div><div>Best regards,</div><div>EWI</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-37746937907031622462016-01-03T11:53:00.000-08:002016-01-03T11:55:02.937-08:00Watchlist 2016<br />
Thought it could be nice to share some part of my tracking list of stocks I am following. I will not reveal the whole part at once and will start with 15 stocks per month to keep the interest for the blog higher.<br />
<div>
<br /></div>
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Important to highlight here is that the "Buy price" is not a deep analysis of the company, its a value I get when inserting the stock into a formula and rounded to the closest integer. As soon as the stock starting to trade close to my buy price I will go further with more complete analysis of the stock before the purchase. This means in other words that I could buy the stock for a higher price than my buy price in the watchlist and not buy even if the price is below my target. </div>
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Below could you see 15 stocks of my watchlist<br />
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<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 591px;">
<colgroup><col style="mso-width-alt: 8009; mso-width-source: userset; width: 164pt;" width="219"></col>
<col style="mso-width-alt: 3181; mso-width-source: userset; width: 65pt;" width="87"></col>
<col style="mso-width-alt: 2706; mso-width-source: userset; width: 56pt;" width="74"></col>
<col style="mso-width-alt: 3035; mso-width-source: userset; width: 62pt;" width="83"></col>
<col span="2" style="width: 48pt;" width="64"></col>
</colgroup><tbody>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt; width: 164pt;" width="219">Name</td>
<td style="width: 65pt;" width="87">Price ATM</td>
<td style="width: 56pt;" width="74"></td>
<td style="width: 62pt;" width="83"> Buy price</td>
<td style="width: 48pt;" width="64"></td>
<td style="width: 48pt;" width="64">% Target</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">AIG (AIG:US)</td>
<td class="xl65">61.97</td>
<td>USD</td>
<td align="right">50</td>
<td>USD</td>
<td align="right">1.2394</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Betsson (BETSB:SS)</td>
<td class="xl65">155.5</td>
<td>SEK</td>
<td align="right">110</td>
<td>SEK</td>
<td align="right">1.413636</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Chubb (CB:US)</td>
<td class="xl65">132.64</td>
<td>USD</td>
<td align="right">100</td>
<td>USD</td>
<td align="right">1.3264</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Chipotle Mexican Grill (CMG:US)</td>
<td class="xl65">479.85</td>
<td>USD</td>
<td align="right">550</td>
<td>USD</td>
<td align="right">0.872455</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Gjensidige Forsikring (GJF:NO)</td>
<td class="xl65">142.1</td>
<td>USD</td>
<td align="right">110</td>
<td>USD</td>
<td align="right">1.291818</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Hennes & Mauritz (HMB:SS)</td>
<td class="xl65">302.1</td>
<td>SEK</td>
<td align="right">295</td>
<td>SEK</td>
<td align="right">1.024068</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Coca-Cola (KO:US)</td>
<td class="xl65">42.96</td>
<td>USD</td>
<td align="right">37</td>
<td>USD</td>
<td align="right">1.161081</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">MasterCard (MA:US)</td>
<td class="xl65">97.36</td>
<td>USD</td>
<td align="right">91</td>
<td>USD</td>
<td align="right">1.06989</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Nike (NKE:US)</td>
<td class="xl65">62.5</td>
<td>USD</td>
<td align="right">57</td>
<td>USD</td>
<td align="right">1.096491</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Protector Forsikring (PROTCT:NO)</td>
<td class="xl65">73.5</td>
<td>NOK</td>
<td align="right">55</td>
<td>NOK</td>
<td align="right">1.336364</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Starbucks (SBUX:US)</td>
<td class="xl65">60.03</td>
<td>USD</td>
<td align="right">55</td>
<td>USD</td>
<td align="right">1.091455</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Handelsbanken (SHBB:SS)</td>
<td class="xl65">116.3</td>
<td>SEK</td>
<td align="right">100</td>
<td>SEK</td>
<td align="right">1.163</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Travelers Cos (TRV:US)</td>
<td class="xl65">112.86</td>
<td>USD</td>
<td align="right">100</td>
<td>USD</td>
<td align="right">1.1286</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Visa (V:US)</td>
<td class="xl65">77.55</td>
<td>USD</td>
<td align="right">70</td>
<td>USD</td>
<td align="right">1.107857</td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td height="20" style="height: 15.0pt;">Walmart (WMT:US)</td>
<td class="xl65">61.3</td>
<td>USD</td>
<td align="right">51</td>
<td>USD</td>
<td align="right">1.201961</td>
</tr>
</tbody></table>
<br />
As you could see is a lot of stocks not below my buy price. The reason for this is probably because the stock market at the moment has a pretty high valuation compared to historic prices and that the interest rates are low. Which makes the cash available to flood to the stock market for a chance of higher returns.<br />
<br />
Only Chipotle (CMG:US) are below my buy price and I have been buying on the way down a lot and the company as a position are now the biggest in my portfolio. Chipotle is trading this low due to a E.Coli and a Norovirus outbreak in November 2015 which lead to pressure on the shares.<br />
I am confident that the company will overcome this over the upcoming two years and Chipotle will come back as the baby it was for Wall Street. In the past restaurant chains had similiar bigger outbreaks and I do not see this outbreak as a threat to Chipotle's future. More regarding the outbreaks and comparison to peers in the industry could be read <a href="http://www.fool.com/investing/general/2015/12/22/contrarians-corner-chipotle-mexican-grills-shares.aspx" target="_blank">here</a>* from Alex Dumortier at the Motley fool.<br />
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My last purchase was Hennes & Mauritz at 296 SEK per share, which is a good company with a solid dividend and should be part of all long term investors portfolio.<br />
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I wish you all the best for 2016!<br />
<br />
Best regards,<br />
EWI<br />
<br />
<br />
<i style="background-color: white; color: #111111; font-family: Cambria; font-size: 14.3px; font-weight: bold; line-height: 20.02px;"><span style="font-size: xx-small;">This should not be taken as a financial or any kind of advice and all the numbers on this blog could be incorrectly. I am not taking any responsibility for individuals using this information and all individuals using this information is using it on their own risk. </span></i><br />
*<span style="color: #111111; font-family: Cambria;"><span style="font-size: xx-small; line-height: 20.02px;"><b><i>http://www.fool.com/investing/general/2015/12/22/contrarians-corner-chipotle-mexican-grills-shares.aspx</i></b></span></span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-62147802513455086342015-12-29T06:39:00.000-08:002015-12-29T06:39:18.721-08:00Savings guide for 2016<br />
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<a href="http://4.bp.blogspot.com/-3fYTykIprzg/VoKa3SUZ6dI/AAAAAAAAAN8/VhzFIXLK12U/s1600/investment%2B1.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="211" src="http://4.bp.blogspot.com/-3fYTykIprzg/VoKa3SUZ6dI/AAAAAAAAAN8/VhzFIXLK12U/s320/investment%2B1.JPG" width="320" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
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Thought it could be a good idea to share some savings tips for 2016, which every person that is aiming for financial independence should live by in the coming year.<br />
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<i>-Although I need to admit I am not following all of them, but have as a goal to adopt as many as possible during 2016. I will also try to do a follow up within 6 months, to see how much these things saved for me.</i><br />
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<b>Here comes Eighth Wonder Investing savings guide for how <u>you</u> should save as much money as possible during 2016:</b><br />
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1. Always pay your bills in time, and with in time I mean the exact date the when the receiver should have the money. Always store your money until the last day on a saving account with as high yield as possible.<br />
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2.Use the car as little as possible, walk, bicycle or ride the bus as much as possible. Preferably do not even own a car, one of the things that are draining a lot of cash.<br />
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3.Clear the garage and wardrobes and sell. If you haven't used it in the last 6 months, you probably don't need it or will never use it again. Sell, sell, sell!<br />
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4.If you really need a car, get one which is a couple of years old. The depreciation of the price is the largest in the beginning and it could loose as much as half it's value the first 2 years. After following tips number 2, the newer car with more energy efficiency will never make up the cost for the depreciation.<br />
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5. If you're buying clothes, always buy clothes with quality and with timeless design. Fashion trends is for people who is weak and never will be able to spend time on their yacht, cigar in their mouth and enjoying financial independence.<br />
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<i>-Trust me, 95% of the time I am the best dressed man in the room and I am surely not the guy who spend the most on clothes.</i><br />
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6. Always buy food on a full stomach and buy in bulk.<br />
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7. Be as unfaithful as possible to all companies you have contracts with, electricity, banks, insurance etc. Always check best price and play them out on each other.<br />
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8. Going on vacation? Rent out your place on Airbnb.<br />
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9.You think you could live smaller? Rent out a room to a person, could gain you a lot of money and a new friend in life.<br />
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10. Visit a lot of physical stores, try a lot of clothes and sizes and always check prices online. Before making the purchase never forget to check the second hand market. If you don't like second hand, a lot of products are brand new and with full warranty.<br />
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11. Stop with tobacco and alcohol completely, will save you money and health.<br />
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12. Start to exercise, will make you more healthier (sick days costs a lot of missed income), same shape (yes, you could use the clothes you bought in your 20s) and you will look better. <br />
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13. Switch jobs, could boost your salary and you will meet a lot of new friends.<br />
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14. Do not eat pre-made food from the factories, make the food yourself instead. Both healthier and cheaper.<br />
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15.Never have anything electric on standby and try to connect as much as possible to power strips which should be switch off during night.<br />
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16.Have the right air pressure in the wheels on the car, often you could have a bit more then the recommendations from the car companies. This will lead to less fuel consumption.<br />
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17.Stop eating snacks and all the "snacking". Costs you a lot of money and you don't need the nutrition from it. Check below how much your body needs in terms of nutrition, goal weight etc. and balance it:<br />
<a href="http://www.active.com/fitness/calculators/nutrition" target="_blank">http://www.active.com/fitness/calculators/nutrition</a><br />
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18. Always bring food boxes to work. Will save you time and money.<br />
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19. Use a credit card as much as possible, pay in time and use the free interest period. This will give you reward points which you could use on more fun stuff.<br />
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20. Take care of your teeth and do practical dental care at home. Reducing the cost for professional dental care.<br />
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21. Cancel all the amusement contracts you have, Spotify, Netflix, Pandora etc. spend time with family and friends instead. <br />
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22. The last but as important as the first, track all your purchases and look over them after every month, to see where you could save extra money.<br />
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<i style="background-color: white; color: #111111; font-family: Cambria; font-size: 14.3px; font-weight: bold; line-height: 20.02px;"><span style="font-size: xx-small;">This should not be taken as a financial or any kind of advise and all the numbers on this blog could be incorrectly. I am not taking any responsibility for individuals using this information or any damage coming from it.</span></i>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-84235560985534785362015-12-28T08:09:00.001-08:002015-12-28T08:10:54.914-08:00Vardia Insurance Group - Update and PNL forecast Q4<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-ogGsJCX76u0/VoFeiQ5N5sI/AAAAAAAAANk/oP2ODg1qCys/s1600/Vardia.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="76" src="http://3.bp.blogspot.com/-ogGsJCX76u0/VoFeiQ5N5sI/AAAAAAAAANk/oP2ODg1qCys/s320/Vardia.JPG" width="320" /></a></div>
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As I told you in my last post, I'm back with an investment in Vardia Insurance Group. This time smaller then last time though (10 000 shares). </div>
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<i><br /></i></div>
<div>
<i>So why didn't I stick with my investment in Vardia and sold it when the accounting problems were announced and why did I go into it again?</i></div>
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The question is from my perspective simple to answer; When the accounting problems were announced all information I based my former investment in Vardia on were wiped out, since I couldn't trust the information the company had been giving to the market. In other words, no body which invested in Vardia during the time when the accounting problems were announced until last week when Price Waterhouse Coopers (PWC) did their external diligence on Vardia's bookings knew if they could trust the information from the company and were just gambling. Exactly the same way as going to the Casino and bet on black or red on the roulette table.<br />
-This is the only reason why I didn't keep my shares in Vardia and sold them just after the announcement.<br />
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Now on the other hand, PWC made the diligence and no discrepancies were found, the information Vardia has communicated is solid and the case is from my perspective better than ever at this valuations. </div>
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We have seen some positive revaluation of the stock since the PWC announcement were made, around 15% in the time of writing (1.65 NOK per share). I would have expect some more revaluation upwards after the announcement, probably that will come as soon as Pareto Securities (PAS) stops the heavily selling in the stock. Although I'm happy as long the price stays low since its a good opportunity to buy more shares. </div>
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<br /></div>
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Vardia's GWP would at the moment be around 1550M NOK and at a valuation at 1.65 NOK per share we are talking about a GWP ratio on 0.44 x GWP which is an absurdly low valuation and is probably lower then what the liquidation value would be in a worst case scenario. This statement is also backed by what Vardia's peers has been acquired for in the past, how much the customer base has been worth (Aktia 0.61 x GWP, Moderna Försökringar 1.0 x GWP, NEMI Forsikring 1.0 x GWP). </div>
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<b><br /></b>
<b>PNL Forecast Q4 </b></div>
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If we were looking at the past quarter for Vardia (Q3), the numbers were not perfect, there were somethings which could have been better. Total loss for Q3 were -56M NOK (Q2: -43M NOK) but were impacted by some factors. New management, whichs normally takes non-recurring costs to get clean sheets the first quarter (Q3: -27.5M NOK). The claims ratio were high 97% due to some larger claims which were utilized during the quarter. The operational costs reductions from the new organizational structure were only in place since the 10th August, only the last half got the positive cost impact from the new structure.<br />
If we now look at the forecast for Q4, I expect we will see around the same cost reductions as we have seen from Q2 to Q3 (if you exclude the non-recurring costs) which is a 33% cost reduction. Together with that cost reduction I also think we will have a better claims ratio then Q3 gave us (Q3: 97%), which I think will be around the trailing average the last 12 months, 81% claims ratio. When applying this together with my calculations we should end up with a forecasted loss on around 6-8M NOK and then in Q1 start to show profit. This loss is good and will keep Vardia above the solvency margin until they start to show profit.<br />
Maximum loss in Q4 without being in violations with the solvency requirements are -17M NOK, which is an important number to have in mind for the upcoming report. <br />
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As you probably could read, the case in Vardia is tempting and I would say the risk for loosing money at this valuation is small.<br />
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Happy new year!<br />
<br />
<i>-Eighth Wonder Investing</i><br />
<br />
Full disclosure: Long Vardia Insurance Group<br />
<i style="background-color: white; color: #111111; font-family: Cambria; font-size: 14.3px; font-weight: bold; line-height: 20.02px;"><span style="font-size: xx-small;"><br /></span></i>
<i style="background-color: white; color: #111111; font-family: Cambria; font-size: 14.3px; font-weight: bold; line-height: 20.02px;"><span style="font-size: xx-small;">This should not be taken as a financial or any kind of advise and all the numbers on this blog could be incorrectly. I am not taking any responsibility for individuals using this information.</span></i><br />
<br />
<br />
<br /></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-19138276304914548852015-12-22T07:11:00.001-08:002015-12-22T07:11:30.868-08:00Status update - Portfolio, Equities, Savings<p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Hi everyone,<o:p></o:p></span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Think it's time for a status update, regarding the portfolio, equities and savings.<o:p></o:p></span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">A lot of changes has been done in the portfolio, since the mess with the accounting </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">problems in Vardia. The portfolio has now got some structure and more longterm holdings,</span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">even if I am still building the portfolio at the moment. As I often say: "Rome wasnt built </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">in one day".</span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">The portfolio today consists of 5 equites and two index funds.<o:p></o:p></span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">The equities are as follow: Starbucks (SBUX), Mastercard (MA), </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Hennes & Maurits (HMB:Stockholm), Chipotle Mexican Grill (CMG), Vardia (VARDIA:Oslo).</span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Index funds: Avanza Zero and DNB Global Indeks.<o:p></o:p></span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">In short the portfolio has been declining since purchase date overall, Avanza zero which is a </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">swedish index fund have not been performing well and Chipotle Mexican Grill as well, due </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">to a E.Coli outbreak. Although it gives me great buying opportunities which is good, have </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">been buying Chipotle a lot over the last couple of weeks/months and have now stopped since </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">it taking up to much of my assets. Mastercard, Starbucks and Vardia are all performing.</span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">The next purschase will probably be Hennes & Mauritz, if the decline continues. Everything </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">below the stockprice 300 SEK for Hennes & Mauritz do I think is a good buying opportunity </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">for a long term investor.</span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Total value of the portfolio will be around 230 000 SEK by the end of this year. </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Saving rate for this year has been under all critism and need to be increased over the next </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">year. Target number for saving next year should be around 120 000 SEK, this should be a problem </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">since I increased my salary heavily in my new position in November 2015.</span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">In the upcoming weeks will I post some articles around the portfolio, equities holding at the moment, </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">goals for 2016 and a saving schedule for the new year.</span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Stay tuned!<o:p></o:p></span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Merry christmas and a happy new year all!<o:p></o:p></span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Best regards,<o:p></o:p></span></p><p class="MsoNormal" style="margin: 0in 0in 0.0001pt;"><span lang="EN-US" style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">EWI </span></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-65164162594011513642015-09-06T10:19:00.001-07:002015-12-22T06:17:50.752-08:00ETFs or Index Funds? Whats the Best?<br>
<b>Description ETFs and Index funds</b><br>
In the last years ETF:s has gained in popularity and become one decent alternative to the average investor. In the simplest terms, Exchange Traded Funds (ETFs) are funds that track indexes like the S&P 500, Dow Jones, OMXS30, etc. When the investor buy shares from an ETF, you're buying shares of a portfolio that tracks the return (<i>Yes, yield as well</i>) from that certain index fund that the ETF are replacating. ETFs are traded exactly like an equity investment, as stated you're buying shares in an portfolio.<br>
In other words index ETFs are not trying to beat the market, they're trying to be the market or the index.<br>
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Index funds on the other hand is passively managed mutual funds, made to mirror the performance of a market index (i.e <span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">S&P 500, Dow Jones, OMXS30), which in other words is almost the same. Index funds compared to actively managed mutual funds has two primary advantages:</span><br>
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<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">1. Lower management cost is the first one, which means the guys behind the fund takes less from you for the service of managing the fund. This is often around one-half to two-thirds less than actively managed mutual funds.</span><br>
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<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">2. On average the index fund has gained the investor more return than actively managed funds, in other words a lot of experts has a problem to outperform the market (index). Of course there are some actively managed funds that have generated significantly higher returns than index funds.</span><br>
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<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"><b>ETF versus Index funds</b></span><br>
<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">ETFs has some advantages which comes with the flexibility the investor has since they are traded as equity on the stock exchange, this means they could be bought and sold instantly, which means you could close the position any time. This compared to the index funds, when you get the end price of the day. The rules out from this is if you're an active investor the ETF will suit you better. Passive normal investors will on the other hand love the index funds for their simplicity, no need for brokerage account.</span><br>
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<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Dividends are often payed out on index </span>ETFs, which is the opposite compared to a normal index fund where they keep the dividends within the fund. This has both advantage and disadvantage. For a long-term investor I would say that keeping the dividends within the funds is better (<i>You dont need to pay comission when you need to re-invest the dividend again</i>).<br>
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</div><div><br></div><div><i>Whats the best is hard to answer and I will say as so the journalist says; it depends.</i></div><div><i><br></i></div><div>Hope you enjoyed the text and it was meaningful.</div><div><br></div><div>Best regards,</div><div>Eighth wonder investing</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-86619231578808566902015-08-29T03:23:00.002-07:002015-08-29T03:23:32.508-07:00Building blocks in my portfolio strategy<br />
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<a href="http://4.bp.blogspot.com/-Hgbai-65Hrc/VeGHipBXZoI/AAAAAAAAAM4/jyF2yI2NcaY/s1600/roman%2Bfoundations.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="150" src="http://4.bp.blogspot.com/-Hgbai-65Hrc/VeGHipBXZoI/AAAAAAAAAM4/jyF2yI2NcaY/s200/roman%2Bfoundations.JPG" width="200" /></a></div>
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As I told you in the last post that I have been working on a new strategy, which will be a mix between stocks and index funds. This post will be dedicated to describe the portfolio and the reason why I believe this is the best way to go.<br />
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From my experience in Vardia I reliazed the importance of diversification; the portfolio down 25% in one day is pretty bad when believing in value investment and that day got me to re-consider my diversification strategy and in the end my whole portfolio strategy. </div>
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If you don't have a clear strategy for diversification and hiding behind Warren buffets strategy that is that if you know your companies you don't need to have to many in the portfolio (good article why Warren Buffet doesnt diversify <a href="http://www.fool.com/investing/general/2014/07/20/why-warren-buffett-doesnt-diversify-too-much.aspx" target="_blank">here</a>). I truly recommend you to re-consider your exposure to a few assets and think about all factors that could impact returns, everything from fraud to hackers gather all their data (think about Ashley Madison).</div>
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The new portfolio strategy will be built like this (percentage);</div>
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Stocks: 35%</div>
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Swedish index funds: 35%</div>
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Global index funds: 15%</div>
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U.S. index funds: 15%</div>
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This setup will be the building blocks in my portfolio, there will in most cases also be around 5% cash for unexpected opportunities. This 5% cash will be smaller as the portfolio grows and when it gets bigger there will be more monthly purchases. Why did I go for this strategy? Time.. Since I started to work I didn't reliaze how much time I spend on the work and how tired I am when I come home. In other words, I don't really believe I have the time to have 100% stocks in my portfolio, just because there's not enough time to analyse them and find the risks involved with them, therefore the diversification.</div>
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At the moment I'm 50% invested, and this will be the case for a while, since I believe we have pretty high valuations on the markets. This will change as soon as the market conditions are better, i got some this week; MasterCard (MA), Starbucks (SBUX) and DNB Global Indeks fund.</div>
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<i>Now I'm off to a pool party, take care!</i></div>
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Eighth wonder investing</div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-42779007905992411332015-08-24T13:24:00.000-07:002015-08-24T13:24:05.339-07:00What did go wrong in Vardia and The portfolio statusVardia Insurance has been on my mind for a long time, lost 50K SEK (approx. 5400 euros) in one day.<br />
Rough day? <i>Yes, was a used Rolex Submariner which went away over a night..</i><br />
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Mad?<i> No, could only blame myself..</i></div>
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Before writing what did go wrong maybe it's better to say how the days went when Vardia went through Armageddon and until now.</div>
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26th February 2015, Vardia is trade stopped from request from the company and postponing the announcement of the fourth quarter earnings.</div>
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26th Feb - 4th March, a lot of speculations is going around on blogs, newspapers, forum etc. I have a really bad feeling but couldn't imagine what were to come.</div>
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3rd March 2015, due to an accounting principle which has to do with booking of sales costs makes Vardia show a loss at 219 million NOK (approx. 25 million EUR). The stock is dropping 50 percent in the opening. </div>
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4th March, I'm liquidating my whole portfolio, including Vardia and is back to zero from my gains in Protector. </div>
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4th March - until June 2015, my trust for the stock market is zero, lost money on Tesco on accounting principles and now this in Vardia. Have still saved a lot of money during the months, but mentally I'm not ready to go into the stock market again. </div>
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Thinking about other investments, properties etc. but know that the stock market is where you should be to make the real money with as little risk as possible.</div>
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Deciding to take some vacation from work and really rest, get my mind together and continue the thinking. Going to Hawaii for two weeks on my saved money, to start over when I come back with a new strategy (will come back to that in a later post, but shortly a mix of index funds with stocks). </div>
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<b>Over to what really went wrong in Vardia and in my analysis;</b></div>
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As stated above, Vardias accountants had a different view on how to accrual costs, sales costs. Accordingly to Vardia they were not allowed to do accrual the sales costs anymore and had to back-calculate everything and take it as a cost, 219 million NOK was gone over a night. </div>
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They launched a new shares issue on 275 million NOK and with an interim loan to meet the solvency requirements in Norway. This together with massive cost reductions would make them profitable..<i>Already here I knew these money will not be enough to make them profitable. Cost reductions take at least 3-6 months before you see any impact, it's not like you stop paying your employees the next day.</i></div>
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Last thing I read was that they will now do a management buy out (MBO) of the sales organization to bridge until they are profitable for 30 million NOK (?). Maybe that will be enough, didn't pay that much attention but it seems it's only good for management and not for the shareholders. </div>
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What did go wrong in my analysis? Mostly a lack of time and limited knowledge in insurance accounting. In other words, I could only blame myself..</div>
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Portfolio status today;</div>
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50 000 SEK (buy price) in Avanza Zero (bought the last month)</div>
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10 000 SEK (buy price) in DNB global index</div>
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6282 SEK per share (buy price) - 3 shares of Chipotle Mexican Grill (CMG)</div>
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745 SEK per share (buy price) - 16 shares of MasterCard (MA)</div>
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430 SEK per share (buy price) - 36 shares of Starbucks (SBUX)</div>
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Hopefully I will be posting some more now, when I'm back on my trip to financial independence! </div>
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Will update the portfolio and trades and also get back with a post on my new strategy.</div>
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Best regards,<br />
EWI<br />
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<i><span style="font-size: x-small;">This should not be taken as advise as always and all the numbers on this blog could be wrong and I am not taking responsibility for anyone who uses this information.</span></i></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-7772882760657461002015-02-26T12:20:00.000-08:002015-02-26T12:20:14.568-08:00Vardia Insurance Cooking The Books?<b>Vardia Insurance were </b>expected to announce their Q4 today, but instead they gave the market the message that the financials for Q4 will be announced tomorrow. On the top of this they also halted the trading in the stock until the release of the results.<br />
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<b>Vardia's comment today</b> were this:</div>
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<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><i>The postponement is due to new information received from
the Company's auditor regarding accounting principles.
Vardia has after consultation with Oslo Børs decided to
suspend the trading of the stock until the results are
published.</i></span></div>
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<b>In addition to</b> the comment Aleksander Nordahl IR-responsible at Vardia stated during the day that this were the case, with the vague explanation:</div>
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<i>We have received new information from the accountants and has in discussions with Oslo stock exchange suspended the trading in the stock.</i></div>
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<b>So what could</b> all this mean? It's at least not positive for The reputation thats for sure. Experience say me that is use to be bad when stocks getting halted due to accounting troubles, but who knows (<i>still hasn't forgot the cold shower from Tesco</i>). </div>
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I have actually been speculating the whole day on what a valid reason could be for the postponement and the halted trading and came up with these four options which I see are the most likely ones:</div>
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<li>Formalia. Could be some sort of error in the way of presenting the numbers which led to no signature from the accounting firm which validates it. Things that speaks for this is that the message came as a lightning from the sky and that they only postponed it one day. I am still concluding that this is the dream scenario and consider this the most unlikely one.</li>
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<li>Tax issues. Speaking for it; have been on the wall before. Still doesn't see this scenario is very likely either, one day postponing is way to less for a tax problem. Worst case scenario there will be a new issue of the stock.</li>
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<li>Assets. The assets are not what they should be. Could be due to different things, most likely some issue regarding the acquisitions Vardia made in the past. Worst case scenario huge new issue which fails and bankruptcy. </li>
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<li>Income/Costs/Reserves. Miscalculus in some way of the cost of goods sold, revenues or that the reservations for the Insurance business has been to low. Worst case scenario here will be a new issue of the stock. This option is the most likely from my point of view.</li>
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<b>On the other</b> hand we still have the sales (which should be correct) and the GWP which is backing up the case.<br />
Whatever happens tomorrow the stock will most likely open down and that could open opportunities for more purchases. Tomorrow will be an interesting day!</div>
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Remember that this is only speculations and hopefully transparent facts will be announced tomorrow.<br />
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Best regards,<br />
Eighth Wonder Investing<br />
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<i>Full disclosure: I am heavily invested in Vardia Insurance Group with 3200 shares.</i><br />
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-16519001463851978722015-02-24T12:15:00.003-08:002015-02-24T12:16:19.182-08:00Thoughts About Settling DownToday I asked myself that question, <i>what would I really do with more money or if I were financial independent?</i>. The question is really hard to get and very vague.<br />
The definition I have for <b>more money</b> are financial independence. <br />
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Let's start with financial independence, which differs a lot between people. <i>When are you really financial independent? </i>For me personally is that question impossible to answer because it depends on so many factors, as everything else in this world..<br />
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<a href="http://en.wikipedia.org/wiki/Financial_independence">Wikipedia</a> is stating that financial independence is a state a human has when he or she has sufficient wealth to live, without having to work actively for basic necessities. Often financial independent peoples assets generate more income then their expenses.<br />
Another definition comes from a survey done 2013 by <a href="http://www.4-traders.com/CAPITAL-ONE-FINANCIAL-COR-12144/news/Capital-One-Financial-Corp--More-Americans-Thinking-About-Money-Than-Gridlock-Traffic-This-Fourth-17054317/">Capital One 360</a>. The survey states that 44% of U.S adults said financial freedom meant not having any debt, 26% said it meant having enough saved for emergencies and 10% defined it as being able to retiring early.<br />
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From my point of view neither Wikipedia nor Capital One 360 has right here, just because of the simple reason that it depends so much external factors that its so hard to answer this question, especially for me at an age of 25.<br />
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Let's bring up a scenario.<br />
I guess a lot of people like me wants to live in a nice neighborhood, fancy car and friends with the same mindset around you. In other words this neighborhood will be wealthy and to a certain extent contagious. <i>Why? </i><br />
People with high incomes consumes a lot, which enriches corporate to small medium business and those companies will start to demand manpower. These things is pushing salaries north and then the snowball is rolling with the society as a winner and me as financial independent as a loser?<br />
<br />
I dont know but its a good thing to think about, should you choose to settle down in a more "expensive" neighborhood or in a cheaper region like Asia for example.<br />
I will definitely put that up on my to-do-list, what is actually financial independence for me.<br />
<br />
Besides the philosophical thinking I am working on a general analysis of the fast food industry, which will probably be done and posted in the upcoming weeks. <br />
<br />
<br />
Best regards,<br />
<br />
Eighth Wonder Investing<br />
<br />
<br />
<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-46240722735640535622015-02-15T13:37:00.004-08:002015-02-15T13:37:52.077-08:00Marvelous Company, Marvelous Numbers - Protector Q4 2015<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-DRCnssM262c/VOEN0H--A3I/AAAAAAAAAK0/lQRtdHVibrI/s1600/protector-forsikring.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-DRCnssM262c/VOEN0H--A3I/AAAAAAAAAK0/lQRtdHVibrI/s1600/protector-forsikring.jpg" /></a></div>
<br />
<br />
As probably no one has missed by now in the blog world, Protector's Q4 report was astonishing and the stock market received it with open arms. Protector is now up 10.11% since the announcement of the report.<br />
The best announcements in the report from my side were that Sweden and Denmark are now showing profit and that is under <b>extreme</b> growth. Sweden is growing GWP by 121%, Denmark with 89% and Protector overall with 28% to 2375M NOK (1861).<br />
<br />
Here are some more candy from the report,<br />
<ul>
<li>Protector forecast higher profit 2015 and with 18% growth.</li>
<li>Protector increases the dividend from 1.75 NOK to 2 NOK. 14.28% increase!</li>
<li>Combined net ratio down to 84.5% from 86.7% last year.</li>
<li>Investment portfolio know has a value of 4 958M NOK up from 3 999M NOK last year.</li>
<li>Profit per share grew from 3.47 NOK to 4.63 NOK.</li>
</ul>
<div>
New target price for Protector are 68 NOK, this comes from that I think they will make around 5.785 NOK per share. Which means a profit growth on 25% and a future P/E 11.75, should be doable for the great company Protector!</div>
<div>
<br /></div>
<div>
<br /></div>
<div>
Besides Protector's marvelous announcements I have increased my share in Vardia Insurance at the price 27.9 NOK with 1400 shares. Total numbers of shares in Vardia are now 3200 shares and a total market value of 102 486 SEK. I will continue to grow my shares in Vardia since that it the most udnervalued company at the moment.</div>
<div>
<br /></div>
<div>
<br /></div>
<div>
Best regards,</div>
<div>
Eighth Wonder Investing</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-61462932441616349052015-02-10T13:22:00.001-08:002015-02-10T13:39:04.624-08:00Vardia Insurance - January SalesVardia Insurance continue and continue to deliver good growth and over my forecast sales also the month of January.<br />
As I said in on of my previous posts: <a href="http://eighthwonderinvesting.blogspot.com.es/">What Could We Expect From Vardia In Sales 2015</a> my forecast were 89.3M NOK and sales came in today at 92.6M NOK compared to 79.5M NOK last year. <i>Which is completly magnificent!</i><br />
<br />
The first month of sales could also be a good guidance for the next month sales if we just apply it on the assumed working days there will be in February 2015, which is 18 days.<br />
18 days gives us a sales forecast on 119M NOK for February, which sounds a bit high for me but I am confident that Vardia will make over 110M NOK in February, which will be a new record in sales for a month.<br />
<br />
Except the sales figures CEO Ivar S. Williksen also said today that Denmark's sales figures are growing as expected and that they also have increased significantly the commercial business in Sweden, and along with our in-house sales forces of agents and brokers they have the goal to be the best selling Nordic insurance in 2015. <i>Impressive!!</i><br />
<br />
On top of the sales figures Vardia has also got a really interesting customer, the Swedish Police Association which has over 20 000 members and are now leaving Moderna Forsakringar for Vardia Insurance Group. <i>more info could be find here: <a href="http://www.allians.com/polisforbundet">new alliance for Vardia</a> (only swedish).</i><br />
<i><br /></i>
I am actually surprised that the share price weren't heading north today after this numbers, but I guess as long as DNB Markets are pouring insane amounts of Vardia shares on the market I do think it will be hard for the share price to get higher. Although nothing to complain about since I could be in need of some more Vardia shares at this price.<br />
<br />
As said before 2015 will be the year for Vardia Insurance group!<br />
<br />
Best regards,<br />
<br />
Eighth Wonder Investing<br />
<br />
<br />
<br />
<i style="background-color: white; color: #111111; font-family: Cambria; font-size: 14.3000001907349px; font-weight: bold; line-height: 20.0200004577637px;">Note: I will increase my share in Vardia in the upcoming days, weeks, months, years.</i><br />
<div>
<i style="background-color: white; color: #111111; font-family: Cambria; font-size: 14.3000001907349px; font-weight: bold; line-height: 20.0200004577637px;">Full disclosure: Long Vardia Insurance Group (VARDIA)</i><br />
<i style="background-color: white; color: #111111; font-family: Cambria; font-size: 14.3000001907349px; font-weight: bold; line-height: 20.0200004577637px;">Disclaimer: All text on this blog is not any form of investment advice, this is only for personal use.</i><br />
<br /></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-81891686858067339462015-02-03T14:23:00.000-08:002015-02-03T14:24:35.378-08:00Summary of January<span style="font-family: Cambria, serif; font-size: 10.5pt;">Time for the summary of the first month in 2015. </span><br />
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;">Must say that it has been a great month, a lot of
action, but great.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;">Let's start with the first thing, I actually sold (<i>it
doesn’t happen often</i>) Tesco this month. I
haven’t been very impressed about how they have been performing over the time I
owned the stock, declining sales almost quarter after quarter and accounting troubles
etc. After the last increase of the share price I decided that it’s time for me
and Tesco to say good bye to each other for this time at a share price in SEK
after costs of 85.490 SEK (TSCDY, OTC).<o:p></o:p></span><br />
<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;">In other words the portfolio at the moment are only
consisting of 3 companies, Protector Forsikring, Vardia Insurance and Hennes
& Mauritz. I must admit that for me a portfolio consisting only of 3 companies are way to focused. The target is to own a portfolio consisting of 5-8 companies, but as you probably noticed its hard to find wonderful companies at a fair price when S&P 500 are doing new highs every week.</span><br />
<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;">Next buy will be Vardia Insurance if their sales numbers for January are in line with my forecast.</span></div>
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<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-7i3naZFdmJw/VNFGFjes-uI/AAAAAAAAAKg/eV5yvyxlj40/s1600/asset%2Ballocation%2BJanuary%2B2015.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-7i3naZFdmJw/VNFGFjes-uI/AAAAAAAAAKg/eV5yvyxlj40/s1600/asset%2Ballocation%2BJanuary%2B2015.jpg" height="240" width="400" /></a></div>
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<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;"><br /></span></div>
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<br /></div>
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<b><span style="font-size: large;">Achievements January 2015</span></b></div>
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</div>
<ul>
<li><span style="font-family: Cambria, serif; font-size: 10.5pt;">The portfolio had a great performance the last month and are up to today had an increase of 12.12% this year with a total value at 239 703 SEK (approx. 26 330 EUR). </span></li>
<li><span style="font-family: Cambria, serif; font-size: 10.5pt;">In terms of savings was 12 000 SEK transferred to the
portfolio for future stock purchases.</span></li>
<li><span style="font-family: Cambria, serif; font-size: 10.5pt;">New ATH (all time high) for the portfolio.</span></li>
<li><span style="font-family: Cambria, serif; font-size: 10.5pt;">Amortized my student debt with the total amount of 1893
SEK, not much but still in line with the goals.</span></li>
</ul>
<br />
<div class="MsoNormal">
<b><span style="font-size: large;">Improvements for February</span></b></div>
<div class="MsoNormal">
</div>
<ul>
<li>Save more money, still wasting money on things I don't need.</li>
<li>Do more analysis of companies.</li>
</ul>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US" style="font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US;">Transactions updated with the sell of Tesco.<o:p></o:p></span></div>
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<b><span lang="EN-US" style="color: #111111; font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: SV;">Transactions:<o:p></o:p></span></b></div>
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<b><span lang="EN-US" style="color: #111111; font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: SV;">2015/01/27 – SELL Tesco – 487
share +41 638 SEK<o:p></o:p></span></b></div>
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<b><span lang="EN-US" style="color: #111111; font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: SV;">2014/12/30 - Dividend Tesco
+165.3 SEK</span></b></div>
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<b><span lang="EN-US" style="color: #111111; font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: SV;">2014/12/17 - BUY Vardia
Insurance Group - 1000 shares - 26 911 SEK<br />
2014/12/17 - BUY Protector Forsikring - 720 shares - 24 820 SEK<br />
2014/12/16 - Dividend MCD +521.34 SEK<br />
2014/12/09 - SELL MCD +54 810 SEK<br />
2014/10/08 - BUY Vardia Insurance Group - 800 shares - 23 647 SEK<br />
2014/07/16 - Dividend Tesco +1728.49 SEK<br />
2014/07/08 - BUY Protector -720 shares -30 983 SEK<br />
2014/06/17 - Dividend MCD +430.4 SEK<br />
2014/05/17 - Dividend H&M +1662.5 SEK<br />
2014/03/19 - Dividend MCD +411.12 SEK<br />
2013/12/17 - Dividend MCD +425.57 SEK<br />
2013/01/07 - Dividend Tesco +712.98 SEK<br />
2012/05/10 - Dividend H&M +1662.5 SEK<br />
2011/12/12 - BUY H&M - 175 shares - 37 376.6 SEK<o:p></o:p></span></b></div>
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<b><span lang="EN-US" style="color: #111111; font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: SV;"><br /></span></b></div>
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<b><span lang="EN-US" style="color: #111111; font-family: "Cambria","serif"; font-size: 10.5pt; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: SV;"><br /></span></b></div>
<div class="MsoNormal" style="background: white; line-height: 15.0pt;">
<span style="color: #111111; font-family: Cambria, serif;"><span style="font-size: 14px;">Best regards,</span></span></div>
<div class="MsoNormal" style="background: white; line-height: 15.0pt;">
Eighth Wonder Investing</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-58871513267054054812015-01-26T13:33:00.001-08:002015-01-26T13:33:27.369-08:00What Could We Expect From Vardia in Sales 2015?In recent time have I seen several discussions regarding Vardia sales numbers on different blogs and almost fierce comments from some readers in the commentfields. Therefore I want to highlight this post to really focus on the Sales and try to give a fair estimate on where we would end up after 2015.<br />
<div>
<br /></div>
<div>
Before we start I want to highlight the big <b><u>Q</u></b> everyone has:</div>
<div>
<br /></div>
<div>
<b>Q:</b> What if the big insurance companies just lower the price and compete Vardia out of the market?</div>
<div>
<b>A:</b> Vardia's business model is to provide low risk customers with insurance products. Since low risk customer will do less insurance claims then high risk customers, Vardia could offer the product to a lower price. In other words Vardia says that, why should you share a risk with high risk customers when you are a low risk customer?</div>
<div>
<br /></div>
<div>
This is the main reason why Vardia will be a winner in the end, and this business model is not done by the big insurance companies today. Of course to this you could add several things in Vardias advantage like more efficient IT, lean organisation etc. but it's still the core business model that will make Vardia successful. </div>
<div>
<br /></div>
<div>
<b><span style="font-size: large;">Now over to the numbers,</span></b></div>
<div>
To make this forecast as correct as possible I will investigate how 2014 sales number were per annual, monthly and daily basis. Then adjust a modest annual sales growth on below market expectations on 15% (For Vardia this is modest). </div>
<div>
<i><br /></i></div>
<div>
<i><br /></i></div>
<div>
<i><b><span style="font-size: large;">How was sales on annual and monthly basis 2014?</span></b></i></div>
<div>
<i><br /></i></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-2OZRvSuByS0/VMVn8CsFnKI/AAAAAAAAAKA/V0KZ88orT7c/s1600/Sales%2BVardia%2B2014.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-2OZRvSuByS0/VMVn8CsFnKI/AAAAAAAAAKA/V0KZ88orT7c/s1600/Sales%2BVardia%2B2014.jpg" /></a></div>
<div>
<i><br /></i></div>
<div>
<i><br /></i></div>
<div>
-Total sales of 1044.3 million NOK 2014.</div>
<div>
<i>-</i>Average per month 87 million NOK.</div>
<div>
<br /></div>
<div>
<i><b><span style="font-size: large;">How was sales on daily basis 2014 and how will it be 2015?</span></b></i></div>
<div>
<br /></div>
<div>
Public holidays 2014 which fell on a weekday (Could have 1 day wrong here on some country) :</div>
<div>
Denmark: 11 days</div>
<div>
Sweden; 15 days</div>
<div>
Norway: 12 days<br />
<br />
We take an average here and say 13 days in general.</div>
<div>
<br /></div>
<div>
Weekends (Saturday and Sunday) 2014: 104 days</div>
<div>
<br /></div>
<div>
Holiday (I assume everyone has 5 weeks); 35 days</div>
<div>
<br /></div>
<div>
Number of days per year: 365 days<br />
<br />
<i>How many effective working days do we end up with per year now?</i><br />
<br />
<div style="text-align: center;">
365 - 13 - 104 - 35 = 188 days</div>
</div>
<div>
<br />
If we assume 15% sales growth next year we end up at 1200.6 million NOK, divide that per effective working day, we have sales per day at: 6.38 million NOK.<br />
<br />
<br /></div>
<div>
<span style="font-size: large;"><b><i>How will sales be per month 2015?</i></b></span><br />
After analyzing local holidays and normal vacation patterns I did this assumptions for effective working days per month for 2015:<br />
<br />
January: 14 Days<br />
February: 18 Days</div>
<div>
March: 18 Days</div>
<div>
April: 17 Days<br />
May: 17 Days<br />
June: 12 Days<br />
July: 9 Days<br />
August: 13 Days<br />
September: 19 Days<br />
October: 19 Days<br />
November: 19 Days<br />
December: 14 Days</div>
<div>
<i><br /></i>
If we now apply the assumed average sales per day on effective working days for 2015 we end up with a sales per month like this:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-bQiLEztViBM/VMavU3g3BnI/AAAAAAAAAKQ/_XG_H1TCPEM/s1600/Sales%2Bforecast%2BVardia%2B2015.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-bQiLEztViBM/VMavU3g3BnI/AAAAAAAAAKQ/_XG_H1TCPEM/s1600/Sales%2Bforecast%2BVardia%2B2015.jpg" /></a></div>
<br />
<br />
So next year, annual sales forecast on 1200.5 million NOK and GWP forecast on 56-60 NOK per share. 2015 will be a great year for Vardia Insurance!!<br />
<br /></div>
<div>
Sincerely,<br />
Eighth Wonder Investing<br />
<br />
<i><br /></i></div>
<div>
<i>Note: Vardia offer products to everyone, but high risk customers gets a high premium.</i><br />
<i>Full disclosure: Long Vardia Insurance Group (VARDIA)</i><br />
<i>Disclaimer: All text on this blog is not a form of investment advice, this is only for personal use and I disclaim myself for misspelling or wrong calculus.</i></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-23543920744326287142015-01-20T12:05:00.003-08:002015-01-20T12:23:38.899-08:00Protector Forsikrings Forecast and Announcement January 20th 2015Brief notes about the announcement from Protector today.<br />
<br />
Protector (PROTCT) today announced their own forecast and a significant volume increase for year 2015.<br />
Their CEO Sverre Bjerkeli said this today about 2015:<br />
<br />
<i>"The Company experiences strong growth in January and expects Gross Written Premiums (GWP) to increase to 18% (15% measured in local currencies) over full year 2015. Norwegian business areas will contribute with single-digit growth, while Sweden / Denmark will grow approximately 50% in aggregate. Gross and net written premiums are expected to experience identical growth rates. </i><br />
<br />
This text is really a statement that Protector Forsikring has just started, 18% (!) growth is magnificent and really show how much hidden value there is in this insurance company. A wonderful company like this should be traded at higher price, that's it. <i>Mr. Market wake up!!</i><br />
<br />
Looking forward for the 2014 annual report 12th February.<br />
<br />
Other highlights in the announcement were:<br />
<ul>
<li>Strong premium growth in Q4, up 19% since last Q4. Gross premiums written amounted 282 million NOK.</li>
<li>Net GWP Q4 was 250 million NOK, up 24% since last Q4.</li>
<li>GWP 2014 were 2.375 million NOK, up 28% since last year.</li>
</ul>
<div>
<br /></div>
Over and out,<br />
EWI<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-68344239412914240742015-01-19T13:54:00.000-08:002015-01-19T13:54:08.016-08:00Portfolio and Transactions - New page on the blog<div>
Decided that its time to be more transparent in my portfolio and to track the transactions, just because of two reasons, first that it will be a nice thing for me to have during this journey and secondly that I hope it will inspire someone to start the same adventure as I will do.<br />
<br />
Below you could see how the report will look like, <i>yes I know very simple. </i>The report will be updated monthly with the consisting portfolio and the done transactions during the period.<br />
<br />
Best Regards,<br />
Eighth Wonder Investing<br />
<b><br /></b>
<b><br /></b>
<b>Latest update: 18012015</b></div>
<div>
<br /></div>
I am at the moment invested in 4 companies. My portfolio and the changes will be updated once a month. All values in the portfolio summary will be denoted in SEK, total value of portfolio and changes will be denoted in SEK and EUR.<br />
<div>
<br /></div>
<div>
<b>Portfolio today:</b></div>
<div>
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-lWAbLf5i-Ik/VLvgkxAyH0I/AAAAAAAAAJw/dUHCU71lDwc/s1600/portfolio%2B18012015.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-lWAbLf5i-Ik/VLvgkxAyH0I/AAAAAAAAAJw/dUHCU71lDwc/s1600/portfolio%2B18012015.JPG" /></a></div>
<div>
<br /></div>
<div>
<b><br /></b></div>
<div>
<b>Transactions:</b></div>
<div>
2014/12/30 - Dividend Tesco +165.3 SEK</div>
<div>
2014/12/17 - BUY Vardia Insurance Group - 1000 shares - 26 911 SEK<br />
2014/12/17 - BUY Protector Forsikring - 720 shares - 24 820 SEK<br />
2014/12/16 - Dividend MCD +521.34 SEK<br />
2014/12/09 - SELL MCD +54 810 SEK<br />
2014/10/08 - BUY Vardia Insurance Group - 800 shares - 23 647 SEK<br />
2014/07/16 - Dividend Tesco +1728.49 SEK<br />
2014/07/08 - BUY Protector -720 shares -30 983 SEK<br />
2014/06/17 - Dividend MCD +430.4 SEK<br />
2014/05/17 - Dividend H&M +1662.5 SEK<br />
2014/03/19 - Dividend MCD +411.12 SEK<br />
2013/12/17 - Dividend MCD +425.57 SEK<br />
2013/01/07 - Dividend Tesco +712.98 SEK<br />
2012/05/10 - Dividend H&M +1662.5 SEK<br />
2011/12/12 - BUY H&M - 175 shares - 37 376.6 SEK</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-35599450436941324452015-01-12T13:06:00.001-08:002015-02-10T12:25:17.281-08:00Vardia Insurance - December Sales Finally the sales for Vardia Insurance arrived, lets have a look at them.<br />
<br />
As expected the total sales were lower in December than in November, 79M NOK versus 105M NOK, due to the Christmas holiday. 79M NOK is an OK number but not more than that would I say, my forecast were slightly higher as could be seen here:<a href="http://eighthwonderinvesting.blogspot.com.es/2015/01/bi-weekly-roundup-and-forecast-december.html">December Sales Forecast</a><br />
<br />
Let's do the calculation to see how the sales actually were adjusted to working days.<br />
I assume Vardia's employees only are on duty working days, which is 5 days a week. As far as I could find none of the countries Vardia is operating in had local holidays in November, which is Norway, Sweden and Denmark.<br />
<br />
Let's start,<br />
<br />
<b><u><span style="color: orange;">November</span></u></b><br />
20 full working days. Which is below average, normal month has 21 working days.<br />
<br />
<b><u><span style="color: orange;">December</span></u></b><br />
If we consider local holidays in December we sum up to 18 full working days. Local holidays for all the countries are as you probably know, Christmas Eve, Christmas day, Boxing day, New Years Eve. In other words, but how people are actually only taking the local holidays off during Christmas?<br />
<br />
<i>Not so many people I would say.. </i>So<i> </i>the real question we should ask us are if sales people at Vardia took additional vacation during Christmas? <i>Most likely</i>..<i> </i><br />
<br />
For me this question is impossible to answer, but I could assume from my experience from family and friends that a normal person has around 6 days vacation during Christmas which means that December had 15 full working days. As I said above November consisted on 20 full working days and the outcome of November were 105M NOK in sales.<br />
December consisted of 75% of the working days of November (15/20). If we after that multiply that 75% with the sales of November to see the sales numbers of November applied on the same working days as December, we get:<br />
<br />
<div style="text-align: center;">
105M NOK x 75% = 78.75M NOK</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Assume then a modest growth on 1%:</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: center;">
78.75M x 101% = 79.53M NOK</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
In other words we missed target with approximately 800K NOK which is almost nothing but its not a magnificent month for Vardia. Although my view on Vardia is still the same, the company should at least be valued as 1.0 x GWP, which should be around 36 NOK per share now. On the other hand as longer the price stays low as more shares I could come over.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Important to highlight is that 1.0 x GWP are a very modest valuation and with the sales growth we seen in the last year for Vardia an even higher valuation wouldnt have surprised me at all. </div>
<br />
Sincerely,<br />
<br />
Eighth Wonder Investing<br />
<br />Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-2154832229321609337.post-15202278046956709972015-01-11T07:29:00.001-08:002015-01-12T09:12:49.896-08:00Bi-weekly Roundup and Forecast December Sales VardiaIts time to start with Bi-weekly roundups to keep track on my last two weeks and see that I am on the right track to make my goals for 2015. This post will also include some thought for the sales figures that Vardia Insurance is announcing tomorrow.<br />
<div>
<br /></div>
<div>
Lets start with the financials for the first 11 days of this year.</div>
<div>
The salary for December was really good due to a bonus, ended up at a salary income at 3215 euros. It has been some bad consumption during these days, would like to highlight some of them.</div>
<div>
<ul>
<li>Bought designer plates and forks for 750 SEK (approx. 78 euros).</li>
<li>113 Euros are spent on alcoholic beverages.</li>
<li>48 Euros spent on taxi trips.</li>
</ul>
<div>
As you see always room for improvment, on the other hand if you deduct these expenses the month has been really good I must say, at the moment 2169 Euros are left when all invoices are paid. The forecast is to have 2000 euros left when the new salary are dropping in on the account the 28th January.</div>
</div>
<div>
<br /></div>
<div>
The portfolio is up 2.08% for 2015 which is great but I would have preferred to see falling share prices instead. Just by the simple reason that I know I will be a net buyer of stocks in at least 7-8 years from now on. The portfolio still consists of the same companies, allocation in brackets. </div>
<div>
<ul>
<li>Hennes & Mauritz (28.1%)</li>
<li>Protector Forsikring (29.3 %)</li>
<li>Vardia Insurance (24.5%)</li>
<li>Tesco (18.01%)</li>
</ul>
</div>
<div>
The company which will get my next purchase is Vardia Insurance. Vardia is the stock with the best intrinsic value. Target price is 1.0 x GWP (Gross written premiums) are now at the moment around 35 NOK, and forecast for 2015 are 50-55 NOK in GWP. Will continue to buy the stocks until we have a valuation on 1.0 x GWP and if nothing happens in terms of falling sales for example.</div>
<div>
<br /></div>
<h4>
<span style="color: orange;">Forcast December Sales Vardia</span></h4>
<div>
I assume 16 full working days in December (normal month consists of 21 days). Which is 23% less working days from a normal month. I apply a growth on 1% and then deduct the loss in working days, after the calculus we assume that the sales will be around 80.295 million NOK in December, will be really interesting to see were we end up tomorrow.</div>
<div>
<br /></div>
<div>
Over and out,</div>
<div>
EWI </div>
<div>
<br /></div>
<div>
</div>
<div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-51111274373997250272014-12-27T01:50:00.000-08:002014-12-27T01:50:23.086-08:00The Goals for 2015Since I just started this blog and haven't had any real goals for 2014, except some saving goals. I am now thinking that it could be a good strategy to set up goals for 2015.<br />
<br />
Although I had problems with how to define the goals and make them relevant and attainable I luckily found this magnificent and interesting blog post from Dividend Mantra: <a href="http://www.dividendmantra.com/2014/12/the-importance-of-being-smart-with-your-goals/">"The Importance of Being Smart With your Goals"</a>. Which made me understand how I will set up and define my goals for 2015.<br />
<br />
The S-M-A-R-T goals methodology was first published in a paper from November 1981 <i>Theres a smart way to write managements goals and objectives. </i>written by George T. Doran. There are a few different versions of the S-M-A-R-T criteria but I will apply the ones that George T. Doran came up with the year 1981.<br />
<br />
<span style="color: orange; font-size: x-large;">S</span>pecific - There should be a goal that is specific and narrowed down. Not a general goal that are vague and could be hard to measure in the end.<br />
<br />
<span style="color: orange; font-size: x-large;">M</span>easureable, In other words the goal should easily be measured in some way. It should be quantifable.<br />
<br />
<span style="color: orange; font-size: x-large;">A</span>chievable. The goal should be reachable, in other words physical possible to reach.<br />
<br />
<span style="color: orange; font-size: x-large;">R</span>elevant. It should be relevant to your journey, if its not your end goal will say.<br />
<br />
<span style="color: orange; font-size: x-large;">T</span>imeline. The goal should have a specific deadline when it should be accomplished.<br />
<br />
<br />
So now over to how <b>my goals</b> will be for year 2015.<br />
<br />
<ul>
<li>Save 100 000 SEK from my salary (Approx. 10 000 EUR).</li>
<li>Start to follow a monthly budget. I have done this 2014 but not as strictly as I want.</li>
<li>Reach 300 000 SEK in savings (Approx. 30 000 EUR).</li>
<li>Pay off 12 000 SEK on my student loan (Approx. 1200 EUR). </li>
</ul>
<br />
Due to make it as simple and specific as possible will I only have four goals for 2015. I will follow up my goals on a monthly basis to keep track of them and to see that I am on the right journey to financial independence. <i>Why so often</i>, comes from that I realized from 2014 that I need to be much more strict with my goals to not loose focus.<br />
As you could see have I not chosen any goals linked to the valuation of my stocks, this comes from the reason that I believe I cannot predict and affect the share price over one year, all my investments are at least based on a time horizon on 3 years. I could even say that it will be hard to predict a share price after only 3 years, but I know for fact that in some future the real value of my company will be shown in the share price. In other words a goal linked to the share price wouldn't have followed all the S-M-A-R-T criterias.<br />
<br />
Over and out,<br />
<br />
EWI<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-8504162929897448812014-12-23T08:00:00.000-08:002014-12-23T08:52:42.499-08:00McDonald´s (MCD)Here´s the analysis of the McDonalds stock I promised to publish. I owned the stock for a certain time but sold it due to the last sales numbers. I still believe in McDonalds but I think my money could find more attractive assets then McDonalds now. I got out from McDonalds with an 4.7% profit from the improved SEK/USD currency.<br>
<div>
<br></div>
<h3>
<span style="color: orange;"><u>Introduction - McDonald´s Corporation</u></span></h3>
<div>
McDonalds is the largest fast-food restaurant in the world serving more than 68 million customers daily in 119 countries over 35 000 restaurants. McDonalds restaurants are operated in three different ways, either as an franchisee, affiliate or by the corporation itself. </div>
<div>
The core products in McDonalds portfolio are hamburgers, chicken, fries, soft drinks, milkshakes, breakfast and desserts. In the last year they have also added some new products to expand its menu to changing consumer tastes, which includes, salads, fish, wraps, smoothies, fruit and seasoned fries.</div>
<div>
One of the best things with McDonalds product portfolio are that you know what you get, no matter where in the world you are.<br>
<h3>
<span style="color: orange;"><u>Customers, industry and route-to-market</u></span></h3>
</div>
<div>
McDonalds operations are divided geographically between four different divisions, Europe, US, APMEA and other countries and corporate. Europe is their biggest market with 39% of the revenue, US are the second one which contributes with 31% to the revenue and APMEA stands for 23% of the revenue and other countries and corporate stands for 5% (numbers from 2013).</div>
<div>
<br>
<h4>
<span style="color: orange;">Industry</span></h4>
</div>
<div>
Accordingly to re-search from IBISworld has the global fast food market been growing in the last five years, which is impressive when thinking about the fact that people are moving away from unhealthy fast food and the financial crisis. At 2013 the fast food industry had a global market size on 477.1 billion USD and is expected to have a size of 618 billion USD by 2019, an impressive growth on 29.5% from todays numbers.<br>
There have been some challenges for the fast food industry in the last years, which has been pressuring profit margins. The total market as a whole has proven that its possible to withstand these challenges, though some players have done better than others. The biggest challenge has been and are the more and more focus on high quality food. In general the fast food today is pre-made and then heated when served to the customer, also much of the food is high in fat and has been shown to increase BMI and therefore cause weight gain. The response from this from the industry has been to adding quality and healthy options to the menu, and have had some measure of success, but still the bad reputation hangs over the fast food restaurants.<br>
<br>
<i><span style="color: orange;"><b>How are the prices on the ingredients for the fast food industry?</b></span> </i>The most important commodities for the fast food industry are, corn, wheat, potatoes and beef. The table below explains the 5 year increase or decrease in prices.<br>
<br>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-Jwk3V-qS1b0/VHtQ17AntyI/AAAAAAAAAJM/F5fOLsRW4eA/s1600/fast%2Bfood%2Bcommodoties.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-Jwk3V-qS1b0/VHtQ17AntyI/AAAAAAAAAJM/F5fOLsRW4eA/s1600/fast%2Bfood%2Bcommodoties.JPG" height="86" width="400"></a></div>
<br>
As could be seen in the table has the most ingredients has becoming more expensive in the last 5 years, and within an industry that competition is high, we could expect low profit margins, often south of 10%.<br>
McDonalds profit margin for the last quarter was 15.29% with an average on the last 5 years of 19.76%. To show you some benchmarks numbers Starbucks has a profit margin on 14.06%, Dunkins Brands Group 28.39% and Chipotle 12.06%. The most important number for me here is the difference between the profit margin McDonalds has today and what the average has been over the last 5 years. <i>Why? </i>Because I expect McDonalds to get back to their normal profit margin in a certain future.<br>
<br>
<i><span style="color: orange;"><b>Industry recession proof?</b></span></i><br>
<div style="background-color: white; box-sizing: content-box; color: #6a6a6a; font-family: Roboto, sans-serif; line-height: 20px; margin-bottom: 10px;">
<span style="color: black; font-family: 'Times New Roman'; line-height: normal;">In the past the fast food industry has in general been recession proof, and indeed the industry did not suffer nearly as much as other consumer sectors in the 2009 financial crisis. In fact, McDonalds had an increase in visitors to there restaurants as people during the recession tends to choose cheaper food options over traditional restaurants. On the other hand the recession hurt spending, and consumers overall purchased less per visit.</span></div>
</div>
<div>
<br></div>
<div>
<h4>
<span style="color: orange;">Valuation</span></h4>
</div>
<div>
Mcdonalds are at the moment trading at a price of 96.31 USD and to 18.95 times 2014 expected earnings, S&P 500 are right now trading at a P/E of 20.21. That McDonalds are trading at a discount compared to the P/E of S&P 500 which seems attractive to me. From my point of view McDonalds should at least be trading in line with the S&P 500 due to their friendly shareholder management, recession proof, history of strong growth and one of the best brands in the world. I think the company seems to be under valued and should be trading around 115 USD per share at least, <i>Why McDonalds should be traded at a higher price?</i><br>
<br>
Heres why:<br>
-Shareholders will see double digit growth, both from organic and innovation/expansion.<br>
-Re-purchases of shares will do great for the share price.<br>
-Friendly dividend policy.<br>
-Upward revision of McDonalds P/E metric.</div>
<div>
<br></div>
<div>
<h4>
<span style="color: orange;">Conclusion</span></h4>
</div>
<div>
McDonalds is a wonderful company that are under high pressure at the moment from a lot of external factors, but after the last sales numbers I still sold my shares. I sold my shares due to the fact I dont know really when this ship will be turned around, McDonalds has been dead money for around 10 years now and I dont know if it will take another 10 years until we will see things start to happen with the share price. If the share price goes down to under 85 USD I will get back my position in McDonalds, but at the price its traded at now (94 USD), I see more potential in other industries/ companies. </div>
<div>
<br></div>
<div>
To end this, McDonalds will be on my watch list and I am confident that if you are buying now it will still be a good investment in 7 years a head, but as soon as I dont see organic growth, a more modern menu or Mc Cafe start pay off I will place my money in other sectors. </div>
<div>
<br></div>
<div>
Merry Christmas and Best wishes with your investments for 2015!</div>
<div>
<br></div>
<div>
Sincerely,</div>
<div>
<br></div>
<div>
Eighth Wonder Investing</div>
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<br></div>
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<br></div>
<div>
<br></div>
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<br></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-31216135164096988802014-12-22T00:51:00.001-08:002014-12-22T00:52:39.091-08:00November Sales Vardia Insurance Group and the portfolio<h4>
<span style="color: orange;">Sales Vardia - November</span></h4>
<br />
Vardia is still going strong, even if its under my forecast. Sales figures from November are up 67% to 104.7 million NOK compared to 62.8 million NOK last year in November. At the moment we have 3 months in a row that Vardia deliver over 100 million NOK in sales, which is impressive.<br />
<br />
My forecast for this month were 115-120 million NOK in sales.<br />
The things that are affecting the numbers and are a bit concerning:<br />
<br />
<br />
<ul>
<li>Denmark are still not up to speed, only contributed with 4.8 million NOK. I expected Denmark to contribute with around 15-20 million.</li>
<li>Second month in a row with declining sales, could be due to local holidays & number of days in the month. Important to look after this in the upcoming months.</li>
<li>Sales from Norway dropped an certain amount this month compared to the next. Dont really now why, could be seasonal patterns. Important to look after in the upcoming months.</li>
</ul>
<div>
<br /></div>
<div>
Still my forecast on Vardia is positive, I think a share price at the moment should be around 40 NOK and in the future should be valued after 1.0 x GWP. I expect the GWP for 2015 to be around 55-60 NOK, which should imply the same share price. Last week I doubled up my position in Vardia.</div>
<div>
<br /></div>
<h4>
<span style="color: orange;">Portfolio today:</span></h4>
<div>
Hennes & Mauritz - 28.11% of the portfolio - Bought at 213.58 SEK</div>
<div>
Protector Forsikring -28.8% of the portfolio - Bought at 38.75 SEK</div>
<div>
Vardia Insurance - 24.9% of the portfolio - Bought at 28.09 SEK</div>
<div>
Tesco (TSCDY) -16.22% of the portfolio - Bought at 102.75 SEK </div>
<div>
Cash - 1.8 % of the portfolio - Will try to grow this to be around 10-15% of the portfolio.</div>
<div>
<br /></div>
<div>
As you see I have sold McDonalds after their last sales numbers. I received 4.7% profit due to the currency. I will present an analysis on McDonalds as I promised you guys (its almost done).</div>
<div>
<br /></div>
<div>
Merry Christmas and Happy New Years!</div>
<div>
<br /></div>
<div>
/EWI</div>
<div>
<br /></div>
Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-2154832229321609337.post-45698748827134481602014-11-16T06:34:00.003-08:002014-11-16T06:36:21.917-08:00October sales Vardia Insurance Group <div class="separator" style="clear: both; text-align: center;">
<br /></div>
Vardia Insurance Group presented strong sales figures for October this week, 11th November. The total new sales in Sweden, Norway and Denmark in October were 106.4 million NOK (66.4 million NOK) which is an increase of 60.2% from October 2013. Norway contributed with 59.4 million NOK, Sweden with 43.3 million NOK and Denmark with 3.6 million NOK.<br />
<br />
For me personally it's a bit under my estimation since I expected total sales for fiscal year 2014 to be 1112 million NOK. I really thought sales for October should have been around 113-117 million NOK with Denmark contributing with atleast 9-10 million NOK to the sales. It's no panic yet about the numbers for my forecast, but it would have been nice to be on the right side. To get my sales forecast of 1112 million NOK Vardia has to close business of 252 million NOK in the two upcoming months, which I think could be hard because of christmas holidays.<br />
<br />
Since Denmark was a disappointment I really hope they are steeping up now for the last two months of the year. If they do I am sure Vardia will show profit for at least some month this year and the concern about the cash problem will go away and we could see a more normal valuation for Vardia.<br />
<br />
Here are the actual sales for 2014 up to October (rounded),<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-V_zZiTH9UY4/VGi0t7TzTwI/AAAAAAAAAI0/Pxl8ezcUx84/s1600/actual%2Bsales%2BOCT%2BVardia.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-V_zZiTH9UY4/VGi0t7TzTwI/AAAAAAAAAI0/Pxl8ezcUx84/s1600/actual%2Bsales%2BOCT%2BVardia.JPG" /></a></div>
<br />
I also bought some more companies, Mc Donalds (MCD) and Protector Forsikring (PROTCT). Mc Donalds for a price of 95.3 USD per share and Protector for a price of 36.2 NOK per share. More info and analysis will come in the upcoming weeks.<br />
<br />
<br />
Over and out,<br />
<br />
EWIUnknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-28016502797370153872014-11-11T13:38:00.002-08:002014-11-11T13:44:46.552-08:00Documentaries for the general knowledge about investing and economySince I am a big fan of documentaries, economy and investing, I have seen the most investing and economy documentaries which are out there and I thought it could be a great idea to share my top list of the ones I seen. I don't have the time to write a small summary about everyone today and rate them, I will do it subsequently with around 4-5 per week. All of them could be seen under the tab "Documentaries" and of course ranked by rating. Hope you have the same taste as I have, the first four could be seen below.<br />
<br />
<h3>
<span style="color: orange;">Quants: Alchemists of Wall Street</span></h3>
<b>Rating:<span style="color: orange;"> 9/10</span></b><br />
A documentary about the quants on Wall Street which are creating the complex products which are used in the financial world today. The documentary are showing how the world has becoming increasingly dependent on mathematical models trying to predict the future and quantify risk. I must say that the documentary are one of the best I have seen and especially if you believe in quantitative analysis of companies. Highly recommended.<br />
<h3>
<div style="font-size: medium;">
<div style="font-weight: normal;">
<br /></div>
</div>
</h3>
<h3>
<span style="color: orange;">Inside job</span></h3>
<div>
<b>Rating:<span style="color: orange;"> 8/10</span></b></div>
<div>
One of the best documentaries reflecting the 2008 financial crisis. The movie is directed by Charles Ferguson and he described the movie during as being about <i>"the systemic corruption of the United States by the financial services industry and the consequences of that systemic corruption". </i>The film is narrated by Matt Damon, which has a harmonic voice and really get you interested and excited about the worlds economy. </div>
<div>
The plot is divded into five parts which all of them is describing the financial crisis in chronological order, with the start how we got there and where we are now (2010).<br />
<br />
From my point of view this is really the best documentary about the financial crisis and is a must for all people that some kind of interests about economy.I give Inside Job a rating on 8 out of 10 from me.</div>
<div>
<br />
<h3>
</h3>
</div>
<h3>
<span style="color: orange;">The Tax Free Tour</span></h3>
<div>
<b>Rating: <span style="color: orange;">7/10</span></b></div>
<div>
Documentary about how multinational enterprises are paying taxes (or not paying taxes) really good and with a lot of insight in different tax havens and the tax setup the big companies has today, also a bit humoristic at some parts. The same director as the Quants: Alchemists of Wall Street, Marije Meerman.</div>
<div>
<br /></div>
<div>
<i>Where do multinationals pay taxes and how much? Gaining insight from international tax experts, Backlight director Marije Meerman, takes a look at tax havens, the people who live there and the routes along which tax is avoided globally.</i></div>
<div>
<i>Those routes go by resounding names like "Cayman Special", "Double Irish and Dutch Sandwich". A financial world operates in the shadows surrounded by a high level of secrecy. A place where sizable capital streams travel the world at the speed of light and avoid paying tax.</i></div>
<div>
<i>The Tax Free Tour is an economic thriller mapping the systemic risk for governments and citizens alike. Is this the price we have to pay for globalized capitalism?</i></div>
<div>
<br />
<br /></div>
<div>
<h3>
<span style="color: orange;">The World's Greatest Money Maker: Warren Buffett</span></h3>
<b>Rating: <span style="color: orange;">6/10</span></b><br />
As Warren Buffett were one of the ones who got me interesting in investing and how you think as a value investor I must say I were a bit disappointed on this documentary. On the other hand it could have with the reason that I read all books there is about Warren Buffett before I saw the documentary. That's why I am only giving this one a six out of ten, but I still think as a value investor you should have seen this. General knowledge for an investor.<br />
<br />
Over and out,<br />
<br />
EWI</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2154832229321609337.post-4174796289902669602014-10-31T09:55:00.001-07:002014-11-18T13:54:31.368-08:00Vardia Insurance Group<h3>
<b><span style="color: orange;">Vardia Insurance Group - The journey starts</span></b></h3>
<div>
I am sorry for the low activity on the blog, last week have been really rough at work and I promise it will be better in the future. Finally this week my journey to financial independence starts with my first invested money in an insurance company, <i>exciting</i>. Vardia Insurance Group is my first inwestment and it happened on the 16th Oktober 2014 to a price of 24.6 NOK (2.492 EUR). It have been a bumpy ride so far, down to 22.5 NOK directly after I bought it and now its up to 27.8 NOK. An massive development on 13%, but in matter of fact the ups and downs now doesn't matter for me the importance is where we are in 4-7 years.<br />
<br /></div>
<div>
This post will consist of my first analysis of Vardia Insurance Group and also the points that made me buy Vardia Insurance Group.</div>
<div>
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<b><span style="color: orange;"><u>Introduction - Vardia Insurance Group (VARDIA)</u></span></b><br />
Vardia Insurance is a Norwegian insurance company which operates in three countries, Norway, Sweden and Denmark, headquartered in Oslo, Norway. The stock is trading on the Oslo Stock Exchange under the ticker OSE:VARDIA. Main products for Vardia are to insure causalty and property for private customers and small medium enterprises. Vardia distributes its products mainly through sales centers, which is spread around the countries they are operating in. At the moment Vardia has over 440 employees and has more than 100 000 customers. Fiscal year 2013 had the Vardia revenues on 720 million NOK and gross premium income on 520 million NOK, which was a 330% growth from the previous year. The company has never been showing profit and has until now been financed by issuing new shares. Vardia went public in the beginning of 2014 and that was the time they made their last and biggest new share issuing, which gave the company 175 million NOK. The management has communicated that this will probably be the last time investors has to put in money, because from Q4 2014 the cash-flow will be positive (This will also me make or break for my investment, not a month in Q4 with positive .<br />
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<span style="color: orange;"><b><u>Customers, industry and route to market</u></b></span><br />
Vardia customers are spread geographically with Norway on 49%, Sweden on 49% and Denmark on 2%. Denmark has just started and September 2014 was their first real fair month in terms of business, thats the reason why Denmark has such low percentage of the customers. These numbers also goes with the premium income with Norway and Sweden is shared equally and Denmark stands for a small portion.<br />
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<b><span style="color: orange;">How does the insurance market in general do in Sweden, Norway and Denmark?</span></b><br />
I could start to say that the nordic insurance market are a profitable industry, which means that the industry as an whole has an combined ratio below 100%. <i>Combined ratio in short, combined ratio are the amount of premium collected from the insurers minus the claims paid out to insurers. A combined ratio above 100% may nevertheless say that the company are loosing money because it could still remain profitable due the return on the assets (investments). </i>At the moment the combined ratio for Sweden, Norway and Denmark are approximately on 90%, which is a really good number. During the 1990:s the combined ratios for the Nordic countries were much higher, Sweden for example had a number over 100% until 2003. As you probably understand is the Nordic insurance industry in a really good time, and I can't see anything that would change this during the next 3-5 years.<br />
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Market share, both Sweden and Norway has almost an oligopoly on their insurance market with four big players dominating the market. In Sweden the big players are, Länsförsäkringar,IF, Trygg Hansa and Folksam, these companies stand approximately for 80% of the market. In Norway the four biggest players has 75% of the market, IF, Gjensidige, Sparebank1 and Tryg. The difference between the Swedish and the Norwegian market are actually only one thing and thats the growth. Norway has at the moment an higher growth then Sweden (the Swedish market are very stable), approximately 6-8% annually, versus the Swedish on 3-4% (estimations on the biggest companies, couldn't find any data). The problem or opportunity to have an industry that is growing a lot is that you will have a lot of new companies enter the market, (<i>could be both good and bad), </i>and this is also what is happening on the Norwegian market, a lot of new small insurance companies are starting to enter the market.<br />
In Denmark we have a different market, the four biggest companies are only having 60% of the market, Tryg, Topdanmark, Codan and Alm. Brand. The Danish insurance industry is having a growth on around 1-3% which should be seen as low, on average the danish market has an combined ratio are below 100%.<br />
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Which market that will be best for Vardia is hard to say, but I think Denmark should have the highest potential, because of all the small players. Always harder to break an "Oligopol" than a normal market.. On the other hand Sweden and Norway are the ones performing right now, so we will see what the future looks like.</div>
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<span style="-webkit-text-size-adjust: auto; color: orange;"><b>Route to market</b></span></div>
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<span style="-webkit-text-size-adjust: auto;">Vardias route to market is mostly direct to the private sector and SMB <i>(small medium businesses)</i> customers under the name Vardia, but they also have business through re-sellers and partners which sell Vardias insurance products under their own name (and re-selling). </span><br />
<span style="-webkit-text-size-adjust: auto;">A small part of the sales are over the internet, dont remember the number exactly but I read it some weeks ago and it was around 1-2%.</span><br />
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<span style="color: orange;"><b><u>Management</u></b></span><br />
Vardias management should be seen as strong, everyone has an great experience from the insurance industry and haven't been involved in any scandals (at least cant I find it). At the moment the management in Vardia owns 28% of the company, which should be seen as big stake and also the commitment from the management to the shareholders.<br />
CEO Ivar S Williksen has over 25 years of experience from the industry and from different management positions at other companies, mostly from Gjensidige were he worked for 13 years. I am confident on the management part.<br />
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<span style="color: orange;"><b><u>Numbers and forecasts</u></b></span><br />
Now over to the most interesting part, the numbers. Will start with the sales,<br />
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<span style="color: orange;"><b>Sales</b></span><br />
Since Vardia still not are making any profit on the bottom line because of their aggressive expansion, for me as an investor one of the key metrics are the sales history and an estimation about how I think the sales will develop over the upcoming 7 years.<br />
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<a href="http://1.bp.blogspot.com/-YO_kEskKoxs/VFFmjMrzznI/AAAAAAAAAHQ/Xp2dMF47gmw/s1600/Sales%2BVardia.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-YO_kEskKoxs/VFFmjMrzznI/AAAAAAAAAHQ/Xp2dMF47gmw/s1600/Sales%2BVardia.JPG" height="238" width="400" /></a></div>
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<i> So how has the sales been the last 15 months?</i> Very very good! Since July last year the sales has almost jumped up 3 times, which is insane for me. The best part of the story is that Denmark is not up and running yet, which I think has the same potential as Norway, which means we will still have an increase in sales for a long time ahead. I do not think Vardia will be able to keep up this sales growth although but I think we could expect annual growth of approximately 30-40%.<br />
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Lets play with the sales numbers in Excel for my investment horizon of 7 years. I assume and am confident that Denmark will be up and running for 100% within 11 months and that Sweden and Norway will be growing in a more moderate speed (20%, haha). With these conservative estimations I will use an sales growth annually for the upcoming 7 years on 30%. Let also assume this year ends at 1112 million NOK and by 2021 should the sales be around 7000 Million NOK, which could be seen below.<br />
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<a href="http://3.bp.blogspot.com/-TS2pNagfSEo/VFFtCzADWdI/AAAAAAAAAHg/Foo4bbW_WAU/s1600/Estimation%2Bsales%2Bvardia.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-TS2pNagfSEo/VFFtCzADWdI/AAAAAAAAAHg/Foo4bbW_WAU/s1600/Estimation%2Bsales%2Bvardia.JPG" height="238" width="400" /></a></div>
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But how much will turn up on the last row? If we take a conservative number and say that we will have a gross written premium percentage on 85% (GWP), which means GWP in total will be around 5930 million NOK 2021. Now is it pretty easy to estimate a value on the company with just apply the market valuations we have today in the nordic insurance industry. The valuation in the industry now is spread between 1.7 - 3.1 x GWP is equal to the enterprise value, if we apply this on Vardia for my estimation on the GWP for the year 2021 we will end up at a value between 10 081 - 18 384 million NOK. If we take the most conservative valuation 10 081 million NOK Vardia will have a share price on 312 NOK /share (number of shares: 32 241 988), this is an return on 1168% from my purchase price. I think this numbers really show the potential for Vardia in the upcoming years, even when I deduct my margin safety on 30%, which I have for high risk companies, Vardia is still heavily under priced. The only thing that actually could make me sell this company are that its not showing profit and positive cash flow before end of february 2015. Will be really interesting to follow this young insurance company. Below a box with key metrics from the valuation.<br />
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Take care and have a nice evening, </div>
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