Well I’m going to give my end of the month summary a couple of days early as it’s easier to do on the weekend than on a Tuesday evening when March actually ends.
For comparison with the month before, here’s where I stood Feb 28, a month ago. You’ll actually be amazed how much consistency there is from month to month. Note: This is the month before (end of February) . I finished February up 14.5% year-to-date. The S&P 500 was up 2.3%. That meant I was up 12.2% on the Index. I don’t really care beans about the index, but MF uses it as a measuring device. I care how I am doing in absolute numbers.
My big four were at roughly (in percentage of my entire portfolio):
SWKS at 14.4%
BOFI at 13.8 %
CELG at 11.5%
SKX at 11.1%
Their trailing PE’s were SWKS - 22.7, and BOFI – 19.9. I had trimmed CELG because of a PE of 32.7 to keep the position from getting too big. SKX had a PE of 22 and I had actually added to it after the great earnings.
My middle-size positions, ranged in size form 7.35% to 4.35%, in this order:
CRTO
AIOCF
WAB
XPO
POL
SYNA
FB
My small positions, running from 2.80% to 1.35%, were
EPAM
UBNT
INBK
PSIX
AMAVF
Finally I had a tiny position, 0.45%, in JCOM.
My top four positions (with 50% of my portfolio) had an average PE under 25. I had five positions with PE’s under 20, five more with PE’s under 30, and an eleventh just over 30. Overall, I considered this a relatively conservative, unrisky portfolio. This was especially true considering the earnings growth it was producing. (My stocks earnings were up about 70% from the year before, on average, in the December quarter).
Now the summary for the end of the current month, March. I finished March up 15.6% on the year. The S&P 500 was up 0.1%, so I’m ahead of the S&P by 15.5% after 3 months. Here are my current positions:
My big four from last month are still my biggest positions. I trimmed SWKS when it went over 15%, then again when it went over 16%, and bought back in the big decline last Weds and Thurs, and had to sell some on Fri when it bounced all the way back because I would have been over 17% with my new purchases. This is just adjusting around the edges of my position, dropping the position size from 16.4% down to 15.8%, etc. It’s not a significant change in the position. Here they are with their percentage of my portfolio, trailing PE, and percent growth of EPS last quarter
SWKS at 16.5% - trailing PE was 27 - rate of EPS growth was 75%
BOFI at 14.3 % - trailing PE was 20 - rate of EPS growth was 38%
SKX at 11.5% - trailing PE was 24 - rate of EPS growth was 104%
CELG at 10.9% - trailing PE was 32 - rate of EPS growth was 34%
SKX and CELG switched places but they were only 0.4% apart last month so this signifies nothing. CELG is at a PE over 30 so I’ve trimmed it several times to keep it from getting too big a position.
Note the following:
My big four now make up about 53% of my total portfolio. This is up a little from 50% a month ago in spite of my trimming. They are high conviction though, and this percent doesn’t bother me.
They are in four entirely different fields: microchips, banking, retail clothing, biopharmaceutical. This wasn’t by design, but it sure spreads the risk.
Their average trailing PE is just under 26, which is fine with me.
Their average rate of growth of EPS in the December quarter was about 63%.
Now we drop down again to my middle-size positions, ranging in size from 6.7% to 4.0%, in this order.
XPO
CRTO
WAB
AIOCF
SYNA
FB
AMBA
POL is gone. AMBA has been added. The other six were middle size positions last month and still are.
My small positions, running from 2.9% to 1.9%, are
EPAM
UBNT
INBK
PSIX
SNCR
The first four are still in the same order as last month. My smallest position, AMAVF, has been dropped. SNCR has been added.
Since I began in 1989, my entire position has grown to 284.9 times what I started with. That’s not 284.9%. It’s 284.9 times! Basically a 285-bagger on the entire position, not on any one stock, but on the entire position. That’s the power of compounding an average 30% growth annually, and that’s what investing is all about. Not holding on to individual stocks forever so you can eventually say you have a 10-bagger or a 20-bagger in an individual stock while large numbers of your stocks have gone to hell and you are still holding on to them. Or hanging on to what once was a good stock even after it has flattened out, so you can still brag that you have a 30-bagger in your portfolio. Right now, I don’t have more than a two-bagger on any of my current stocks, but who cares? It’s what my entire portfolio has done that counts.
You may wonder “How is that possible? Even Buffet doesn’t make 30% compounded.” But Buffet was managing tens and hundreds of billions of dollars. It’s like maneuvering a battleship instead of a speed boat. Or one of those super oil tankers that is three football fields long. Buffet had to buy whole companies, for gosh sake. And he never invested in any technology companies. And mutual fund managers who do well one year have money pour in, and the next year they have to manage ten times as much money, which is a whole new ballgame. And they also have all kinds of restrictions on what they can and can’t buy. I had a lot of advantages.
If you are new to the board and want to find out how I did it, and how you can do it yourself, I’d suggest you read posts #4 through #8 at the beginning of the board, and especially the FAQ/Knowledgebase that Neil keeps for us, currently post #6412, which is a compilation of words of wisdom. There are just a few things I might change now. I said that 25 to 28 stocks were the most you should try to keep track of, but I have cut that down now for myself to 15 to 20. I currently have 17. That means that my biggest positions are bigger (and my smaller ones too) and it lets me concentrate more in my highest conviction stocks. I also have made a major effort to eliminate or reduce my positions in illiquid stocks.
Hope this has been helpful.
Saul
