Techinvestment.com invests in technology companies in Australia and USA. 🇦🇺 🇺🇸
Over the past 20+ years our portfolio has included listed stocks and unlisted/alternative investments
Our main focus is listed stocks which provide:
We do follow developments in artificial intelligence. For example, recognising that AI will require quantum computing power, we've recently bought into IonQ, whose trapped ion quantum computers are being used by
Our current preference for investment in USA takes into account issues such as market size and policy issues in areas of economic, monetary, government fiscal (incl taxation) and debt directions that impact on the business environment and exchange rates.
Right now these drivers continue to favour our current investment preference for large innovative technology companies creating and addressing global markets.
On a global basis, Australian companies are too small. For example, Australia's biggest company,BHP's market cap on 24 Nov 2023 was USD 157.7 billion (AUD 239.3 billion), while the market cap of Apple, our largest company, was around 19 times that size: USD 2,954.6 billion. Apple addresses a diversified global consumer market.
We do, however, invest in REA.AX for half-yearly franked AUD dividends to cover our operating expenses.
📈 NASDAQ/NYSE/ASX listed stocks as at 8 Dec 2023
📈 NASDAQ/NYSE portfolio indices in USD and AUD currencies [28 Dec 2012 = 1.00]
📈 NASDAQ/NYSE portfolio stock growth (%) from initial investment to 8 Dec 2023
VMware has now been sold to Broadcom (NASDAQ:AVGO), closing its last day of trading on 30 Oct 2023 at USD146.62. 50% of the value of stock will be returned to VMW shareholders as cash, and the remaining 50% will be in the form of AVGO shares (0.252 AVGO shares for 1 VMW share). AVGO closed at USD 841.25. We did not elect to receive AVGO shares, and will receive USD 142.50 cash for all of our VMW shares (we bought them at USD91.80) plus a special dividend made up of taxable income (16.19/share) and untaxed capital return (10.62/share). VMW stopped trading on 22 Nov 2023. Press release
📈 NASDAQ/NYSE portfolio stock growth (%) from record high close to latest close: 8 Dec 2023
Our original portfolio included ANZ Bank and many Australian technology stocks (some great, some not). However we sold all ASX-listed stocks except for REA Group and AfterPay which was acquired by Square (Block) in early 2022, and the exchanged shares commenced trading on the NYSE as SQ. We see REA as a sound performance stock that pays franked dividends, and wouldn't be surprised (but would be disappointed) to see it acquired too.
"One of the inane things taught in modern university education is that a vast diversification is absolutely mandatory in investing in common stocks. That is an insane idea. It's not that easy to have a vast plethora of good opportunities that are easily identified. And if you've only got three, I'd rather it be my best ideas instead of my worst." Charlie Munger, Berkshire Hathaway 6 May 2023
Berkshire Hathaway began buying Apple in 2016, and in May 2023 owned 5.8% of the company. At the end of 2022, Berkshire Hathaway's top 30 common stock investments had a market value of about USD 294.807bn (share price: USD 473,000), of which Apple represented about 40% of the value of that portfolio. As at 28 Aug 2023 Berkshire Hathaway's share price was USD 539,605.
TechInvestment began buying Apple in 2010. Having grown 1,067.9% since then to a market capitalization of USD 3.044 trillion, Apple now represents 78.1% of our portfolio.
The massive rally in Apple's shares is forcing some fund managers to revisit a thorny dilemma: they may not own enough of the stock. Apple’s share price has soared 49% so far this year, ballooning its weight in stock indexes to record levels and pushing its market capitalization over $3 trillion. The company’s weighting in the S&P 500 has swelled to 7.6%, the biggest of any one stock in the history of the benchmark index, according to S&P Dow Jones Indices. Reuters 3 Jul 2023
Whilst many portfolio managers seek diversification through investment in indexes and/or different products (eg stocks, property, treasuries), we find diversification and higher performance in the global nature, agility and evolution of our technology companies, and the implied FX in our portfolio. We only have 10 companies (2 of which are "bookmarks"), and therefore we can afford the time to keep across their strategies, markets, products and performance. We're looking forward to investing in new generation (AI) companies.
Although we like to hold our stocks, we can't do much about takeovers, such as:
Long term/strategic perspective
Our strategy may be loosely described as value investment. We buy stocks for long term growth, holding them through short-medium term downturns. Therefore we focus more on understanding what we invest in (the companies, their products, their markets, general economic and other drivers) than mathematical portfolio construction (the subject of our founder's MBA project). We conduct our own research and invest directly, rather than invest in index funds.
"The value of a company is a function of the quality of the products and services that it has created and will create. And so if it's a company that has a lot of exciting products that you think are awesome then it's probably a company to invest in. So when I like the products and services of a company and I like where they're going and the management seems sensible, then buying and holding that stock is probably the right move." Elon Musk July 2023
"In a casino the longer you play the worse you do - the stock market is like the opposite of a casino which is the longer you play the more likely you are to succeed." Elon Musk July 2023
As of 20 Dec 2022 there were only 4 trillion dollar companies listed on NASDAQ and we still have them in our portfolio. However as at 8 Dec 2023 only 3 of our investments remain in that group: Apple, Amazon and Google. Facebook had been in the group, but lost so much value when it became Meta: at its last close price of USD 332.75, it has a market capitalization of USD 0.855 trillion.
Portfolio companies that have achieved and maintained USD trillion status (our AAA companies) include:
Apple [AAPL] Our longest-held NASDAQ stock is Apple, which we bought at an average of USD 16.76 (adjusted for share splits) from 21 Oct 2010. This was shortly after the release of the iPhone 4 by Steve Jobs on 8 Jun 2010. It was our first NASDAQ investment. As a result of the iPhone's success, and the success of subsequently released products, Apple has since become the world's most valuable (by market capitalization) company. On 3 Jan 2022 it became the first company to achieve a USD 3 trillion market valuation, up 5,800% since listing on NASDAQ on 12 Dec 1980. With a share price of USD 195.71 (adjusted for 2 share splits: 7:1 and 4:1) Apple is valued at around USD 3.044 trillion, and pays quarterly dividends.
Alphabet [GOOG/L] Google was our second NASDAQ investment. Google later restructured itself with three classes of shares and renamed itself Alphabet. We hold Class A (GOOGL) and Class C (GOOG) shares. Because these two classes closely track each other we only mention GOOGL in our weekly reports. Alphabet achieved USD 2 trillion status (briefly) on 8 Nov 2021. GOOGL and GOOG market caps are currently reported to be USD 1.690 trillion, and USD 1.710 trillion. Alphabet's 20:1 stock split occurred on 18 Jul 2022.
Amazon [AMZN] After buying Amazon at USD 190.90 on 20 Jan 2011, we added to it through 4 years of low growth. Amazon's value significantly increased when analysts and investors appreciated the value of AWS. On 9 Mar 2022 Amazon's board approved a 20:1 share split plus a USD10 billion share buyback. The stock split was effective from commencement of trade on 6 Jun 2022. Amazon's last closing price (adjusted for the 20:1 split) was USD 147.42 and its market capitalization is currently USD 1.523 trillion.
Temporary exclusion: Meta [META]
On 12 Sep 2012 we bought Facebook at USD 20.75 (just over half its USD 38.00 IPO price = market capitalization of USD 104 billion in May 2012). On 28 Jun 2021 Facebook achieved trillion dollar status with a share price of USD 355.64. However with a share price of USD 332.75 Meta's latest market capitalization has fallen to USD 0.855 trillion.
/ The wild ride of the AUD/USD since the AUD was floated in Dec 1983 [History]
In 2010 the AUD was valued above parity with the USD. We concluded that this was unlikely to be sustained in the long term, and this influenced our decision to invest in NASDAQ stocks at that time. Over the next 8 years the AUD fell from USD 1.080 on 2 Mar 2012 to a low of USD 0.574 on 20 Mar 2020, substantially boosting the AUD value of our NASDAQ and NYSE stocks. The AUD has risen against the USD since then, but even at USD 0.658 today (8 Dec 2023), it remains a long way below parity.
Our most recent uses of AI (ChatGPT) are in identification and evaluation of alternative business and investment strategies.