Focused Investing Perspectives #47

The retreat begins…

Boredom amidst turmoil.

Our news feeds remain chock full of turmoil. Tariffs. Wars. DOGE.

This feeds economic uncertainty. Employment. Production. Inflation. An entertaining quote from Barrons:

If the U.S. economy were a car, President Donald Trump would be driving, with Treasury Secretary Scott Bessent in the passenger seat helping to navigate. Federal Reserve chair Jerome Powell? He’d be in the back seat keeping conspicuously quiet, worried that Trump will begin yelling about how he’ll pull over and let Powell out if he starts talking about inflation again.

My concerns are about the longer-term, mostly unintended consequences of actions taken during the present turmoil. For an investor, there is no iron-clad defense. But basing your portfolio on quality companies doing essential things seems a good start.

And of course there are headlines every day about the market. Recent weeks have been a bit exciting, with the S&P 500 down about 10%. But over the past 6 months, the S&P 500 is down 2% on a total-return basis. Yawn.

The relevant indices for my areas of emphasis, energy (XLE) and REITs (VNQ), are up 8% and down 5%, respectively. Sigh.

Looking at selected individual REITs, a few are down or up 10%, but a lot are flat. The energy sector is more entertaining, with midstreams up quite a bit and smaller producers down modestly.

In such markets, my portfolio would be unlikely to move much and it did not. I’m within 1% of my All-Time-High, but flat over the past 6 months.

But more important is the size of my dividend income, from financially sound companies that can grow. It substantially exceeds the funds I would need for spending, were I to stop working.

A fraction of my portfolio is positioned to gain in various ways from anticipated changes in valuation. That quest generally leads to a few trades per month. And a lot of waiting.

Focused Investing News

Forthcoming:

Following my decision to revisit “Go-Fishing” stocks more slowly, my next focus will be EPR Properties (EPR). EPR has come up a lot, but given some of the increase back over the past couple weeks. I also am doing some thinking about different perspectives on discount rates, and will end up publishing something about that.

Personal News:

We are now 0.8 inches from the nice round number of 200 inches of snow for the season. It will be more rain (well, ice today) than snow from here out but fingers crossed.

On Monday we will be working on the menu for the wines of one of our favorite producers, Anne Charlotte, owner of Font du Loup winery. She makes wonderful Rhone wines and is very entertaining too.

Member News

Material since February 24 has included the following.

This past week:

• A perspectives article, to all subscribers.

• A deep look at Regency Centers, to paid subscribers with an extensive free preview.

• A Brief Note on Vicinity Centres, to all subscribers.

The previous week:

• A perspectives article, to all subscribers.

• A reconsideration of Armada Hoffler after their dividend cut, to all subscribers.

• A Brief Note on Slate Grocery REIT, to all subscribers.

• A Trade Alert to paid subscribers.

February 22 through March 14:

• Two of these perspectives articles, to all subscribers.

Items that went to paid members, often including a free preview of much of the article:

• My analysis of the new, post-merger Whitecap Resources.

• A deep dive on NNN REIT.

• A Brief Note providing an update on risk for Alexandria Real Estate, in response to macro events.

• A Brief Note on Western Midstream

• My analysis of the Orion dividend cut.

• Four recent Trade Alerts in total.

• My February Monthly Update

• Paid members have access to the Focused Investing chat.

A note on my approach to restricting access: Anything providing details of my trades and portfolio is restricted to paid subscribers, as is anything I consider to be immediately actionable. Most articles with information it seems members may act on usually have a preview section followed by a paid section where the real meat is.

The Google Sheets (for annual members):

• The main attraction on the Google sheet is full disclosure of my live, real-time portfolio. If you are an annual paid member and do not have access, please contact me.

• I have rolled out my new portfolio organization, replacing the old one. It has a “Go-Fishing” bucket and a separate “Quality Gains” bucket, with the latter seeking to hold quality companies for income or growth, but having moderate risk.

• There are in addition a REIT assessment sheet and a Midstreams assessment sheet, each a tab. And if you scroll down on the portfolio tab, you can see some tickers I track and some playing with possible portfolios.

Also:

• Paid members can also post items of interest on the Focused Investing chat, which I do often. Check it out and post your own items, please. Comments and questions are always welcome.

• There is a search function on the Focused Investing home page, to help look for past articles.

• It can be challenging to search the chat (for paid members only) on mobile devices. To do so, you have to get into the chat so my picture is on the top left, and then punch my nose with your finger (ouch?). You will see a display with a search emoji.

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