Thoughts About Settling Down

Today I asked myself that question, what would I really do with more money or if I were financial independent?. The question is really hard to get and very vague.
The definition I have for more money are financial independence.

Let's start with financial independence, which differs a lot between people. When are you really financial independent? For me personally is that question impossible to answer because it depends on so many factors, as everything else in this world..

Wikipedia 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.
Another definition comes from a survey done 2013 by Capital One 360. 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.

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.

Let's bring up a scenario.
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. Why? 
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?

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.
I will definitely put that up on my to-do-list, what is actually financial independence for me.

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.


Best regards,

Eighth Wonder Investing

Marvelous Company, Marvelous Numbers - Protector Q4 2015

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.
The best announcements in the report from my side were that Sweden and Denmark are now showing profit and that is under extreme growth. Sweden is growing GWP by 121%, Denmark with 89% and Protector overall with 28% to 2375M NOK (1861).

Here are some more candy from the report,

• Protector forecast higher profit 2015 and with 18% growth.
• Protector increases the dividend from 1.75 NOK to 2 NOK. 14.28% increase!
• Combined net ratio down to 84.5% from 86.7% last year.
• Investment portfolio know has a value of 4 958M NOK up from 3 999M NOK last year.
• Profit per share grew from 3.47 NOK to 4.63 NOK.

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!

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.

Best regards,

Eighth Wonder Investing

Vardia Insurance - January Sales

Vardia Insurance continue and continue to deliver good growth and over my forecast sales also the month of January.
As I said in on of my previous posts: What Could We Expect From Vardia In Sales 2015 my forecast were 89.3M NOK and sales came in today at 92.6M NOK compared to 79.5M NOK last year. Which is completly magnificent!

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.
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.

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. Impressive!!

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. more info could be find here: new alliance for Vardia (only swedish).

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.

As said before 2015 will be the year for Vardia Insurance group!

Best regards,

Eighth Wonder Investing



Note: I will increase my share in Vardia in the upcoming days, weeks, months, years.

Full disclosure: Long Vardia Insurance Group (VARDIA)
Disclaimer: All text on this blog is not any form of investment advice, this is only for personal use.

Summary of January

Time for the summary of the first month in 2015. 

Must say that it has been a great month, a lot of action, but great.

Let's start with the first thing, I actually sold (it doesn’t happen often) 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).

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.

Next buy will be Vardia Insurance if their sales numbers for January are in line with my forecast.

Achievements January 2015

• 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). 
• In terms of savings was 12 000 SEK transferred to the portfolio for future stock purchases.
• New ATH (all time high) for the portfolio.
• Amortized my student debt with the total amount of 1893 SEK, not much but still in line with the goals.

Improvements for February

• Save more money, still wasting money on things I don't need.
• Do more analysis of companies.

Transactions updated with the sell of Tesco.

Transactions:

2015/01/27 – SELL Tesco – 487 share +41 638 SEK

2014/12/30 - Dividend Tesco +165.3 SEK

2014/12/17 - BUY Vardia Insurance Group - 1000 shares - 26 911 SEK
2014/12/17 - BUY Protector Forsikring - 720 shares - 24 820 SEK
2014/12/16 - Dividend MCD +521.34 SEK
2014/12/09 - SELL MCD +54 810 SEK
2014/10/08 - BUY Vardia Insurance Group - 800 shares - 23 647 SEK
2014/07/16 - Dividend Tesco +1728.49 SEK
2014/07/08 - BUY Protector -720 shares -30 983 SEK
2014/06/17 - Dividend MCD +430.4 SEK
2014/05/17 - Dividend H&M +1662.5 SEK
2014/03/19 - Dividend MCD +411.12 SEK
2013/12/17 - Dividend MCD +425.57 SEK
2013/01/07 - Dividend Tesco +712.98 SEK
2012/05/10 - Dividend H&M +1662.5 SEK
2011/12/12 - BUY H&M - 175 shares - 37 376.6 SEK

Best regards,

Eighth Wonder Investing

What 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.

Before we start I want to highlight the big Q everyone has:

Q: What if the big insurance companies just lower the price and compete Vardia out of the market?

A: 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?

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. 

Now over to the numbers,

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). 

How was sales on annual and monthly basis 2014?

-Total sales of 1044.3 million NOK 2014.

-Average per month 87 million NOK.

How was sales on daily basis 2014 and how will it be 2015?

Public holidays 2014 which fell on a weekday (Could have 1 day wrong here on some country) :

Denmark: 11 days

Sweden; 15 days

Norway: 12 days

We take an average here and say 13 days in general.

Weekends (Saturday and Sunday) 2014: 104 days

Holiday (I assume everyone has 5 weeks); 35 days

Number of days per year:  365 days

How many effective working days do we end up with per year now?

365 - 13 - 104 - 35 = 188 days

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.

How will sales be per month 2015?
After analyzing local holidays and normal vacation patterns I did this assumptions for effective working days per month for 2015:

January: 14 Days
February: 18 Days

March: 18 Days

April: 17 Days
May: 17 Days
June: 12 Days
July: 9 Days
August: 13 Days
September: 19 Days
October: 19 Days
November: 19 Days
December: 14 Days

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:

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!!

Sincerely,
Eighth Wonder Investing

Note: Vardia offer products to everyone, but high risk customers gets a high premium.
Full disclosure: Long Vardia Insurance Group (VARDIA)
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.

Protector Forsikrings Forecast and Announcement January 20th 2015

Brief notes about the announcement from Protector today.

Protector (PROTCT) today announced their own forecast and a significant volume increase for year 2015.
Their CEO Sverre Bjerkeli said this today about 2015:

"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. 

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. Mr. Market wake up!!

Looking forward for the 2014 annual report 12th February.

Other highlights in the announcement were:

• Strong premium growth in Q4, up 19% since last Q4. Gross premiums written amounted 282 million NOK.
• Net GWP Q4 was 250 million NOK, up 24% since last Q4.
• GWP 2014 were 2.375 million NOK, up 28% since last year.

Over and out,
EWI

Portfolio and Transactions - New page on the blog

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.

Below you could see how the report will look like, yes I know very simple. The report will be updated monthly with the consisting portfolio and the done transactions during the period.

Best Regards,
Eighth Wonder Investing


Latest update: 18012015

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.

Portfolio today:

Transactions:

2014/12/30 - Dividend Tesco +165.3 SEK

2014/12/17 - BUY Vardia Insurance Group - 1000 shares - 26 911 SEK
2014/12/17 - BUY Protector Forsikring - 720 shares - 24 820 SEK
2014/12/16 - Dividend MCD +521.34 SEK
2014/12/09 - SELL MCD +54 810 SEK
2014/10/08 - BUY Vardia Insurance Group - 800 shares - 23 647 SEK
2014/07/16 - Dividend Tesco +1728.49 SEK
2014/07/08 - BUY Protector -720 shares -30 983 SEK
2014/06/17 - Dividend MCD +430.4 SEK
2014/05/17 - Dividend H&M +1662.5 SEK
2014/03/19 - Dividend MCD +411.12 SEK
2013/12/17 - Dividend MCD +425.57 SEK
2013/01/07 - Dividend Tesco +712.98 SEK
2012/05/10 - Dividend H&M +1662.5 SEK
2011/12/12 - BUY H&M - 175 shares - 37 376.6 SEK