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The amazing performance continues.

1 year return: 56% (more than 3x the index)
2 year return: 36% annualized (also more than 3x index)

Still holding long. It's the largest position in my low dividend/growth portfolio and if it grows much larger I will sell some to rebalance to equal weights.
 

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The amazing performance continues.

1 year return: 56% (more than 3x the index)
2 year return: 36% annualized (also more than 3x index)

Still holding long. It's the largest position in my low dividend/growth portfolio and if it grows much larger I will sell some to rebalance to equal weights.
I worry about BAM (no fundamental reason) now. I fear that management will lose discipline, that they aren't making as good deals as in the past and that their deals are immensely complex that it's easy to hide something. Also, it's $95 B market cap is huge in Canada. It is accelerating towards that of RY, which has $150 B market cap and I fear that they will suffer the curse of the TSX (https://www.macleans.ca/economy/economicanalysis/on-the-toronto-stock-exchange-its-not-always-great-being-number-one/)

Maybe this time it will be different?

Disclosure: I have a huge positions in BIP and medium positions in BAM, BEP and BPY.
 

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I worry about BAM (no fundamental reason) now. I fear that management will lose discipline, that they aren't making as good deals as in the past and that their deals are immensely complex that it's easy to hide something. Also, it's $95 B market cap is huge in Canada. It is accelerating towards that of RY, which has $150 B market cap and I fear that they will suffer the curse of the TSX (https://www.macleans.ca/economy/economicanalysis/on-the-toronto-stock-exchange-its-not-always-great-being-number-one/)

Maybe this time it will be different?

Disclosure: I have a huge positions in BIP and medium positions in BAM, BEP and BPY.

What management, nobody knows.
https://www.ft.com/content/595a77d0-3867-11ea-a6d3-9a26f8c3cba4


As much as they're a black box and nobody knows what they're really doing.
The various companies in the web all show excellent performance.
 

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I own a couple of the subs like BEP. I fear they are getting wildly overvalued now. Should relatively low return utility businesses double in a year? It feels like a melt-up of all the BAM stuff. These are long life, relatively low return businesses that are behaving like growth stocks.
 

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I own a couple of the subs like BEP. I fear they are getting wildly overvalued now. Should relatively low return utility businesses double in a year? It feels like a melt-up of all the BAM stuff. These are long life, relatively low return businesses that are behaving like growth stocks.
Could it be some kind of mania for the Bep, Bippy, Bam?

I'll probably lighten up mid year at my next portfolio review.
 

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BAM is pretty expensive. BPY.UN might be the cheapest of the subsidiaries and the only real value aspect. The rest is high growth and high multiples.
 

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I have some of BAM's split preferreds as well as now, some perpetual pfds. I am more concerned about the split pfds, even although they have comparatively good downside protection.

It is a diversified company, but I wonder how they will perform in the current and coming global financial recession. How bad this will be is anyone's guess. Here is one attempt: Four scenarios for the global economy after Covid-19

Brookfield posted this in March: https://bam.brookfield.com/~/media/Files/B/Brookfield-BAM-IR-V2/documents/ Update_for_Brookfield_Shareholders_3-23-2020.pdf
 

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I think BAM is a quality company but still expensive. It has fallen in line with the index so I don't see any additional upside or reason to buy it beyond that.

BPY.UN, however, one of their big subsidiaries, is down nearly 60%. They have tons of office space in big cities not collecting rent. Yield of 17% almost certain to be cut back. But, in my opinion, a good long term buy here.
 

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The amazing performance continues.
What do you think about this article from FT? Doesn't instill too much confidence.

I don't own BAM, but I do own preferreds.

If you Google heading below, it should bring up article. Otherwise you would have to subscribe.
"Brookfield’s leveraged complexity should be unravelled"

Some snippits:

As we gradually emerge from the shutdowns, quarantines and mourning, we will need to deal as quickly as possible with a financial system that will not be capable of delivering the income streams it has promised or, in its present form, efficiently allocating capital across the global economy. The public shock will turn to anger at failed promises of wealth, or even functionality.
MLPs and Reits, their pass-through cousins in the property and data centre trades, pay dividends to investors that are less than the cash flows they receive from operations. For example, Magellan Midstream, an energy MLP, last year paid out only about 71 per cent of its cash flows as dividends. Digital Realty, a data centre Reit, paid out about 73 per cent of its cash flow in dividends. BIP, in contrast, appears to be paying out more in management fees to BAM, dividends to its unit holders, and “incentive distributions” to BAM and its senior management, than it receives as dollars paid in to BIP’s holding company as dividends from its operating subsidiaries. The difference between cash dividends from operating subsidiaries coming in and fees, incentive payments, and dividends going out appears to be covered by capital markets activity at the holding company level, ie. BIP’s net issuance of equity, debt and preferred shares.
In the near future it may be even more difficult to raise or maintain the flow of cash dividends from BIP subsidiaries, such as rail and pipelines in the US or toll roads in Brazil to the BIP holding company, BAM and their outside partners.
Reminds me of the income trust days!
 

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Definitely some concerns about BAM but Mr. Market appears to have taken care of the portfolio weighting for me. I'm now slightly underweight BAM.A in my growth portfolio so I'm not too concerned, I will leave it alone until the next scheduled portfolio review.
 

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I'm actually more interested in BAM now, if you've been waiting for a chance for good management to reallocate capital and take care of market inefficiencies now is the time.
Things are in chaos, good time to make buys.

I'm not sure toll roads or office space will be as valuable. Lots of companies will see work at home as a big cost save.
That being said, there are a lot of things that fall apart in distance offices, particularly relationships and corporate cohesion.
 

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I haven't seen either cost savings or things falling apart matter for the "encourage or discourage" remote work discussion. It's usually been around who can be trusted to work effectively so no measurement is required and that there isn't a good measurement for the much larger pool of those that can't be trusted.


Guess who fits into each bucket ...

Cheers
 

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I find working in the office to be much more effective. One benefit of working at home is it being easier to focus. Collaboration is harder. No amount of collaboration tools can really replace whiteboarding a problem in the same room.
 

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I recently reviewed my individual stock portfolio, and decided to keep BAM.A (did not sell any).

For a while I actually thought my position was in the red, but I had not properly accounted for the stock split + cash payment. Looking at it again on the weekend, I saw that it's performed reasonably well since I purchased it.
 

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I wouldn't say I'm a long term holder, but I am committed to holding BAM at least for another year before reevaluating.
 
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