Seven new holdings in unique buying opportunity
A number of unfortunate records have been set since February 19, with the fastest stock market fall ever in the US. The S&P 500 fell 34 percent in 33 days.
The United States has beaten its previous record for the number of new unemployed in a week. Last week, 6.6 million Americans became unemployed, which is about ten times more than in the worst week of the financial crisis. March 2019 was also Carnegie Global’s worst month ever, down 22.3 percent.
That said, there is hope that this will not be a long crisis. As the spread of Covid-19 slows, economic activity should increase again. It may not return immediately, but given the efforts being made by governments and central banks to support businesses and those in need, the long-term consequences of the pandemic can hopefully be limited.
One positive consequence of the large share price falls is that several companies that we have followed, some for several years, have now become cheap enough for us to invest in. In fact, we have never been as active as in the past month.
We have invested in seven (!) new companies. All except one have recurring revenues because they sell subscription services. Broadridge has almost a monopoly on everything that has to do with information and voting at shareholder meetings. Progressive is a leading American insurer. Salesforce is a global leader in CRM systems.
Hikari Tsushin sells various types of subscriptions, such as mobile phone subscriptions and water dispensers, to companies and private individuals in Japan. Wix is the global leader in online tools and services for building websites. Paychex is the US leader in HR and payroll systems. Finally, we made a small investment in Disney, which everyone knows.
We also sold two major holdings: MTY Food Group and Markel. MTY was sold as we believe its underlying business has changed permanently for the worse. We sold Markel because we found better companies that have fallen even more in price.