Portfolio Update #1

20th September 2024

We’ve just reached 250 subscribers! A big thank you to everyone supporting our mission to provide high-quality, noise-free investment insights.

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Performance

We want to remind you each update, although we are updating you on our performance every two weeks, we do not get excited or upset about short-term fluctuations. Our focus remains on long-term value creation. Please remember this especially when looking at your own portfolio and making investment decisions.

Over the past two weeks, our portfolio has seen a modest increase, with the overall return rising by 1.3% in September, up from -2.8% reported in the last update. This positive shift represents a 4.1% improvement in our September performance, bringing our year-to-date return to 15.8%. This turnaround in September's performance is a good reminder that short-term fluctuations can be significant, but our focus remains on long-term value creation.

The primary driver of this performance was our position in PayPal Holdings PYPL 0.00%↑, which saw a significant increase in total return from 8.13% to 22.33%. Other notable contributors include Meta Platforms META 0.00%↑ , which continued its strong performance with an increase from 417.80% to 462.61%, and Alphabet GOOGL 0.00%↑ , which improved from 68.86% to 76.51%. We also saw substantial improvements in RCI Hospitality Holdings RICK 0.00%↑ , which reduced its negative return from -11.98% to -2.19%, and Nu Holdings NU 0.00%↑ , which increased from 87.29% to 99.27%. These positive movements across multiple holdings have contributed to the overall improvement in our portfolio's performance. Nintendo (NTDOY), Evolution AB (EVVTY) and BAE Systems (BA.L) remained relatively flat over the period.

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The News

As always, we are hesitant to provide macro commentary as it would likely just be noise, and frankly, we're tired of hearing about it ourselves. Instead, we'll focus on company-specific news that may impact our holdings.

• PayPal's Expanding Partnerships:

  • Amazon Partnership: PayPal has partnered with Amazon to integrate PayPal as a payment option for Amazon's Buy with Prime feature. This integration is expected to expand PayPal's reach and potentially boost transaction volumes.

  • Shopify Integration: Separately, PayPal has also announced a partnership with Shopify to power a portion of Shopify Payments in the United States. This integration will allow Shopify merchants to offer PayPal as a payment option at checkout through Shopify Payments, aiming to help increase conversions and reduce cart abandonment. The integration is set to begin rolling out to select Shopify merchants in the U.S. starting in Q3 2024.

• Nintendo's Legal Action: Nintendo, along with The Pokémon Company, has filed a patent infringement lawsuit against Pocketpair, Inc., the developer of the game Palworld. The lawsuit, filed in the Tokyo District Court on September 18, 2024, seeks an injunction against infringement and compensation for damages, alleging that Palworld infringes multiple patent rights.

• Google's Legal Challenges: Alphabet's Google is facing multiple antitrust lawsuits across different jurisdictions. In a recent development, the company is urging a London tribunal to dismiss a mass lawsuit valued at up to £7 billion ($9.3 billion). This lawsuit accuses Google of abusing its dominance in the online search market, potentially increasing costs for businesses which are then passed on to consumers.

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Trades

There have been no changes to the portfolio in the last two weeks.

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Statement of Assets

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Breakdown:

PayPal Holdings, Inc. (PYPL)

• Share of Portfolio: 21.49%

• Purchase Price: $63.05

• Total Return: 22.33%

Investment Thesis:

[FREE] PayPal (PYPL) Equity Research Report

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Cash

• Share of Portfolio: 20.62%

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Nintendo Co., Ltd. (NTDOY)

• Share of Portfolio: 16.08%

• Purchase Price: $12.41

• Total Return: 7.97%

Investment Thesis:

[FREE] Nintendo (NTDOY) Equity Research Report

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Meta Platforms, Inc. (META)

• Share of Portfolio: 10.67%

• Purchase Price: $98.91

• Total Return: 462.70%

Investment Thesis: Coming soon…

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Evolution AB (EVVTY)

• Share of Portfolio: 10.05%

• Purchase Price: $102.31

• Total Return: -3.14%

Investment Thesis:

[FREE] Evolution AB (EVO.ST) Equity Research Report

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Alphabet Inc. (GOOGL)

• Share of Portfolio: 7.35%

• Purchase Price: $91.32

• Total Return: $76.75

Investment Thesis: Coming soon…

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BAE Systems plc (BA.L)

• Share of Portfolio: 5.56%

• Purchase Price: £12.70

• Total Return: 4.62%

Investment Thesis: Coming this weekend!

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RCI Hospitality Holdings, Inc. (RICK)

• Share of Portfolio: 4.14%

• Purchase Price: $47.42

• Total Return: -2.19%

Investment Thesis: Coming soon…

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Nu Holdings Ltd. (NU)

• Share of Portfolio: 4.03%

• Purchase Price: $7.38

• Total Return: 99.27%

Investment Thesis:

[FREE] Nu Holdings (NU) Equity Research Report

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We hope you found this valuable. Thank you once again for your continued support—we’re excited to bring you more updates soon!

The S.C. Team

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Disclaimer: The content provided in this newsletter is for informational purposes only and does not constitute financial, investment, or other professional advice. The opinions expressed here are those of the author and do not necessarily reflect the views of Schwar Capital. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The author may or may not hold positions in the stocks or other financial instruments mentioned. Always do your own research or consult with a qualified financial advisor before making any investment decisions.