End of quarter update

With some delay, I'm posting my holdings for end of Q3'17.

There were not many changes, namely:

• Doubling the position in Apple to ~6% of portfolio
• Reducing Michael Kors by about 80% to 1%
• Increasing IBM, LUK and FB
• Decreasing GILD, SRC and FFH

For Apple, I simply realized that I underestimated the strength of the business and realized profits too quickly. I used a modest correction to almost reestablish the share count I have had at the recent ~$90 bottom. I wish I just did buy and hold.

The investment thesis for KORS was always based on it being undervalued and shareholder friendly (read: buybacks). I became less enthusiastic about the latter as they tamed buybacks and announced Jimmy Choo acquisition. I locked a very modest gain on KORS and I wouldn't mind selling it off completely as it appreciates just a bit more to hit my sell orders. The value story is much less clear for me these days.

Other trades were small and rather opportunistic:

- catching a bit more FB when it slid under $150 at the beginning of Q3 (I wish I placed bigger orders)

- bought some IBM <$150 and LUK @~$23

- taking profits in GILD, SRC and FFH as they rose (but on FFH I missed the jump)

In general, I did not see much of a change in the underlying value of the businesses I own, except for the general, steady rise. Alphabet and Berkshire are still great businesses with bright future.

I see VRX even slightly more optimistically then a quarter ago, with their turnaround plan clearly working. The market does not really agree, pushing it from $17+ to $13+ these days. I noticeably increased the share count and total investment. I'm a little bit in the green overall, but I still see this company's equity as being worth a few times more within 3-5 years. Time will tell how they will do.

I'm more optimistic on GM's prospects for commercial deployment of self-driving cars - I see it happening sooner than I thought before - perhaps as soon as 2018 or 2019. Unfortunately I did not act on that, and I'm sitting on less shares then before, as my layered orders executed.

As before, my EOQ allocation follows: