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BVVK InvestmentsYear report 2017BVVK Board of 2017/2018Gandharv Arora - ChairmanDiederik Koopman - Vice-ChairmanTiemen Straver - TreasurerJelle Kolkman - Coordinator of External AffairsMartijn de Wit - Strategy ManagerNiklas B?cking - Senior InvestorContentsWord of the chairmanStock of the yearDog of the yearCryptoFinancial ResultSwitching to DeGiroNew WebsiteWord of the Chairman:Dear Members,Thank you for the year we have had so far. It has been a slightly bumpy road with a few hiccups but I feel like we are slowly coming back on track by rebuilding the portfolio from scratch. Also the fact that we have rebuilt the website and linkedin page for you all, so that as this committee grows we can showcase the committees accomplishments in the future. All the effort that has been in by you has been greatly appreciated since this is a student committee we try to make every trade a learning experience. Which has proven to be a great way of thinking considering our last few buys. I really look forward to the next five to six months of this academic year, and continue to keep on building our new portfolio. Our performance in 2017 has been good, the value of our portfolio has grown by 3000 euros which is really good and inspiring for this committee as it shows us that we are growing and the research we put into our stock picking is working, so we should keep going and growing and hopefully reap the benefits in the future.Our future plans are to start workshops for our members so that you can apply that knowledge not only at BVVK Investments but also in your personal portfolios that you might hold or come to hold in the future. I want to finish off by saying thank you to all once again and look forward to the 5 to 6 months we have left for this academic year. Stock of the yearIPG PhotonicsA long time ago an old bvvk member pitched this stock and it has been in our portfolio ever since. One of the arguments for buying this stock were that lasers are cool. Nonetheless this stock had great fundamentals and a bright future ahead. IPG Photonics manufactures high-performance fiber lasers and amplifiers for use in a wide range of markets, such as materials processing, advanced technologies, telecommunications and medical applications.Founded in 1990, IPG Photonics pioneered the development and commercialization of optical fiber-based lasers, which are a relatively new generation of lasers that combine the advantages of semiconductor diodes with the high amplification and precise beam qualities of specialty optical fibers. Because these lasers deliver superior performance, reliability and usability at a lower total cost of ownership compared with conventional lasers, fiber lasers are displacing traditional lasers in many current applications and enabling new applications for lasers.The Company's vertically integrated manufacturing provides significant competitive advantages and enhances its ability to meet customer requirements, manage costs and improve performance. IPG Photonics is based in Oxford, Massachusetts with additional manufacturing facilities in Germany, Italy and Russia, and regional sales offices in Detroit, Silicon Valley, China, France, India, Japan, Korea, Singapore and the U.K.Holding this stock has paid of. For 2017 IPG gave a return of 90,93% which is a return to be proud of.Dog of the yearNokiaEvery Portfolio has its winners and losers. So after bragging about IPG Photonics we will also loose a word about the worst performing stock of our portfolio for the year 2017. Nokia has lost 14% in value since we bought it in February 2017 and is therefore the only losing stock in our portfolio for this year. Since we have sold our position in Nokia recently, we will now recollect the plot of this investment-story, explain our reasoning and say ‘adieu’ to this stock for now.Nokia - a master of transformationAfter the demise and subsequent sale of its mobile phone business in 2013/14, Nokia shifted its main operational focus to the manufacturing and sale of telecom network infrastructure. This bold move has probably saved Nokia from ending up in complete meaninglessness or even bankruptcy, and it has once again shown that the 150-year old company is a survival specialist.But of course not everything about this new business model is good and Nokia faces quite a few challenges in the network infrastructure industry. Despite being one of the few dominant players in the industry, competition is fierce, margins are small and demand is currently weak.To understand Nokia’s struggle, we have to take a look at its demand which comes mainly from the big telecom carriers and other communication service providers. Nokia faces very cyclical demand due to the ‘investment waves’ in the telecom sector, which happen every few years when a new network technology (like 3G, LTE, etc) is rolled out. Why buy Nokia in the first place?So basically, buying Nokia shares was a bet on its demand’s cyclicality. This cycle was supposed to go up in the form of the subsequent rollout of 5G - the next generation network infrastructure which will pave the way for megatrends like the IoT, autonomous driving etc. In short, 5G will be a network with higher speed, lower latency and a bunch of more complex innovations, that are right now in the stage of development. Was Nokia a flop then? Maybe. Since the stock price has declined 14% since our initial investment, one could argue that Nokia has flopped in the short run. We still believe that the eventual rollout of 5G, for which Nokia is one of the innovation leaders, will bring in some nice profits to Espoo, Finland. The only issue that we underestimated is the time horizon for this investment. It is well possible that the commercial adoption of 5G is still some 3-5 years away. Even though Nokia has a strong balance sheet and will probably withstand the weak demand until then, holding on to this stock might be a very bumpy ride for the foreseeable future. We believe that our funds can be allocated more effectively elsewhere in the meantime, which is why we decided to sell Nokia. However, holding Nokia and analysing its business environment gave us some great insights into cyclical stocks and still enriched our year in some way. We will definitely keep an eye on this one and are prepared to hop back on the train once future prospect lighten up.CryptoA revolution has started in recent years and we as the BVVK did not want to miss out on it. The revolution we are talking about is of course the crypto revolution. You can not turn on the news without hearing the word Bitcoin, Blockchain or Crypto. And even though most of us have no idea what to do with this new technology, it seems to be making people rich within a day. More and more cryptocurrencies are being created every day and the enthusiasm surrounding the space seems unstoppable. The power of the blockchain technology cannot be denied, but it is causing a lot of speculative behavior. Luckily for us we bought some Bitcoin and Ethereum in the beginning of the year just before the hype became mainstream and we made some nice returns. I even believe this is the highest relative return of the entire history of the BVVK. Something on the decision to sell our cryptos?Financial resultIn this section you can see our balance sheet and our profit/loss account. EUR/USD: 1,2006Above the balance sheet can be seen for the beginning of the year and for the end of the year. However, this is not the actual balance sheet, because we had some difficulties with switching our trading account. We will go into further detail about this in the next section.In the table below our financial result can be found. We had a phenomenal year with only two stocks giving a negative return, being Nokia and BMW. IPG is our best performing stock with a capital return of €850,41. Percentage wise our cryptocurrencies performed the best with a 411,43% and 195,80% gain on Bitcoin and Ethereum respectively. The return on Bitcoin Cash is infinite because we got those for free. On top of the capital returns we received a total of €195,32 in dividends & coupons. With relatively low costs of €348,60 we were able to make an amazing profit totalling €3460,04.Switching to DeGiroOne of the goals of 2017 was to switch our trading account from the ABN AMRO to DeGiro. As a result this would have a significant effect on our transaction costs, so we decided to pick up the work from the previous board and try to finish it. It did not go as smooth as we hoped. We first needed a new bank account, because our old account was linked to the old Chairman and we wanted the new account to be truly owned by the BVVK. We could finally arrange something with the ECU board and we received our own Rabobank account in name of the ECU. At this point we thought we were nearly done and already started cheering, however, we started cheering too soon. We opened an account at Degiro and sold all our assets on the ABN Amro and transferred the money to DeGiro which the intention of buying back everything as soon as possible. When we logged in to our new DeGiro account we received a notification that we needed to fill in a LEI number. Apparently this was because of a new law called MiFID II (Markets in Financial Instruments Directive) which just went into effect. To get this number we had to apply for it at the Chambers of Commerce, so we did this immediately. Sadly they told us it could take up to 4 weeks before we would get it. This caused us to make a drastic decision. Because we already liquidated all our assets(except the cryptocurrencies), and possibly could not buy back any stocks soon we decided to start 2018 with an entirely new portfolio. As a result of this issue our actual balance sheet looked like this on the 31th of december 2017: EUR/USD: 1,2006Position per personThe table below shows the position of all the active and passive members of the BVVK on 31th of december 2017.New WebsiteAs we started this year as your chieftains we wanted to professionalize the BvvK. Starting intern, but also extern. A website is to be seen as the business card of an organisation. And we have come a long way. We still have to dot a few more i’s and cross a few more t’s, but even now it is something to be proud off. Our plans consist of putting the weekly reports online, putting more pictures of the BvvK and her members online and some more features. Together with the help op Nameydo designs, I have good faith this will happen. ................
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