How am I doing so far?

Investment Analysis Clubs Saul’s Investing Discussions
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I will give an end of the month summary of my positions this weekend (on this thread), but here’s a preliminary take. In the first two months of the year, my portfolio as a whole is up 15.1%. This is in a fairly flat market (the S&P 500 has gone from 2058 to 2111, or up 2.7%).

Let me emphasize that this is a pace that CANNOT continue at this pace! I can guarantee that there will be slower months and down months. If I was up 15.1% each two months for the year, I’d be up about 135% for the year, which is not a sustainable pace, but it’s a heck of a nice start.

Saul

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This is in a fairly flat market (the S&P 500 has gone from 2058 to 2111, or up 2.7%).

Up 2.7% in 2 months is fairly flat? I’m actually surprised S&P is only up that much as I know I am up quite a bit more than that as well.

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Saul & Other Fools,

It’s interesting to see Saul’s performance and think about the influence this board’s philosophy is having on my portfolio’s performance.

My portfolio’s performance since the beginning of the year is about 14.5% and a just less than half of this is due to the strengthening of the $US (I live and pay taxes in Germany). Most of the other gains (but not all) could be attributed primarily to companies not discussed here on this board.

However, the selling discussions on this board probably have had a few points impact. In the past, I always felt awkward selling positions, insecure about whether or not I was making the right decision. Now, I am starting to have more confidence selling as well as buying companies that are a bit more proven. Selling is really difficult for me, because I (still) buy companies without a good understanding of how they will make money. If one doesn’t understand this, then, of course, it’s difficult to determine why and when to sell. So I sold out of SODA and WPRT last year before the big drop and put the money into better companies.

Also, I probably got another few points buying a lot more of BOFI near its 52 week lows, thanks in part to the great discussions on this board. However, this was offset by my losses in UBNT, which I bought primarily due to what I learned with the help of this board. Despite the loss in UBNT, I feel that it is a very good investment, especially at the current prices, because I understand the business pretty well and believe it will prosper over the next few years.

Further, I now have small positions in companies I probably wouldn’t have looked at if it were not for this board, including XPO and CRTO, both of which are up quite a lot for me (even in $US terms). I’ll follow them now and, as I learn more, I’ll invest more in them.

Currently, I own a part of 28 different companies, perhaps a couple more than I’m used to owning. Four of these companies are discussed a lot on this board (BOFI, UBNT, XPO & CRTO). The first two are in my top 10 holdings (top 1 are 80% of my portfolio), which means the other two had little impact on performance so far this year.

This board is helping me learn, and I expect that it will have a significantly positive impact on my returns in the future regardless of whether or not I make Saul’s companies part of my portfolio.

I’m sure that there are others out there like me that feel the same way, and I’ll say thank you to the participants on this board on behalf of all of them.

DJ

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This board is helping me learn, and I expect that it will have a significantly positive impact on my returns in the future regardless of whether or not I make Saul’s companies part of my portfolio.

Hi DJ, That’s the idea of the board, to help you invest better, not necessarily to buy the same stocks I do. Glad you are finding it helpful.

Saul

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Yes, currency impact can be huge! I am based in Switzerland and I lost 15% on my entire portfolio on Jan 15 in one single day. That was when the Swiss National Bank unexpectedly lifted the EUR/CHF cap.
Having said that, Q1 performance of my holdings made up for most of the loss already…
Thomas

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jdc115,

In normal times, a 2.7% return for the first 2 months of the year would be exceptional, indeed. That would extrapolate to a 32% increase for the year!

However, the stocks Saul is currently owning are killing the S&P…and I suspect most of us that are regular readers of Saul’s board are also seeing our portfolios benefit tremendously as well.

It can’t last forever, but for now I’m enjoying the ride.

Jim

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In normal times, a 2.7% return for the first 2 months of the year would be exceptional, indeed. That would extrapolate to a 32% increase for the year!

However, the stocks Saul is currently owning are killing the S&P…and I suspect most of us that are regular readers of Saul’s board are also seeing our portfolios benefit tremendously as well.

yes, I understand, just making a comment in jest that that 2.7% increase in 2 months is not really flat by any means…

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I knew you were joking about the S&P’s “meager” return, jdc115, and appreciate your insight.

I would be happy with that return any and every year!

Jim

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I guess I should have said “relatively flat”.

:wink:

Saul

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In normal times, a 2.7% return for the first 2 months of the year would be exceptional, indeed. That would extrapolate to a 32% increase for the year!

How many months does this year have? :wink:

2.7 / 2 * 12 = 16.2

I believe that 16.2% is above the S&P’s average long term return. My port’s down 0.76% for the year. January was a stinker but February is looking good.

Denny Schlesinger

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Denny,

Thank you for correcting my poor math!

But yes, 16.2% annual gain would be fine by me.

Jim

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Hi Saul,

Been okay for me as well. With respect to the NAV at the beginning of the year plus all cash inflows since then, I 'm up 11.1% in terms of US dollars. If I look at it using Australian dollars (my base currency), then I get some additional benefit of favourable currency movement which pushes my return to 15.4%.

So far, looking better than 2014!

Anirban

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Well done, Saul. Well done. I was curious so I looked at my own two month performance, and found that after I backed out my monthly contributions, I was up about 7% over the last two months.

I remain skeptical of my own performance (beating the S&P by 6% since 2013), and attribute nearly all of it to dumb luck, statistical variation (pre-reversion to the mean), and avoiding really dumb investments. I believe a small part of might be to leaning from the successful investors like yourself and others who frequent this board, share ideas (thanks for SWKS!), and help the rest of us become better investors along the way.

Tom

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14

Between my own and wife’s IRA, Roth IRA, Rollover IRA and 2 taxable accounts I manage a total of 7 different portfolios but do most of my trading is done in just one taxable account. No trades in any of the non-taxable accounts in 2015 so far so everything I have done YTD has been in just one account. Here are my returns in 2014 and 2015 year-to-date:

1st Taxable acc: 2014 +17.2%, 2015 YTD +31.6% (most active account)
2nd Taxable acc: 2014 +28.7%, 2015 YTD +5.6%
Self IRA: 2014 +30.2%, 2015 YTD +2%
Self Roth: 2014 +35.2%, 2015 YTD -1%
Wife’s IRA: 2014 +28.6%, 2015 YTD +1.2%
Wife’s Roth: 2014 +21.2%, 2015 YTD +4.7%
Rollover IRA: 2014 +18.6%, 2015 YTD +5.1%

All accounts combined: 2014 +23.1%, 2015 YTD +6.1%

I typically do not own more than 30-35 stocks or ETFs in total in all accounts combined. 3 of the accounts above only have 3 or 4 stocks in them. 3 of them only 8-10 stocks, and the largest account has 23 stock positions.

My most active account on top consists of only 6 stock positions and is the only account with option transactions with a few open long Calls and Puts in it. 2015 year-to-date out performance of over 31.6% in this account has been mainly due to long Call options on AMZN, TRIP and PCLN that went my way, but I also had Calls on FB and GNRC that went the wrong way and expired worthless. With +31.6% return in this account in just 2 months I am thinking I should trim everything down and take most of the profits and wait for a big drop as I would be happy with that performance for the whole year even if I we do not have any correction. And before you ask, I hardly ever give any consideration to taxes. If I make money, I am happy to pay the taxes. I do occasionally sell losing positions for tax purposes, but taxes are usually not the deciding factor in my trades. I believe worrying about taxes leads to wrong decisions.

All of my accounts in 2014 beat S&P by a wide margin, mainly due to the following 2 actions: I sold out of most profitable positions in late January of 2014, right after Russia invaded Crimea, and went into about 60% cash and bought back most of the same shares a lot cheaper just a few weeks later after a short term correction. And once again in August of 2014 when the Ebola scare hit the markets I went into 70% cash and bought my positions back after a 10% market correction more than a month later. And since I had a lot of high beta stocks, a 10% general market correction resulted in about 20% drop in the stocks I sold and bought back. Had I worried about taxes, I would not have sold and would have taken the losses. I know trying to time the markets goes against everything that TMF teaches us, but I firmly believe that trends, geo political events, and macro economic conditions have a direct effect on stocks, so listen t news and do act accordingly and it has worked to my benefit many times, the best example of which is going into almost 100% cash in June of 2008 a few months before the financial market meltdown. I learned my lesson with the crash of year 2000 and have learned to sell when I feel like it is time to sell. And I do take anecdotal evidence into account as I do believe that micro events and people behavior around me can frequently be extrapolated to the population at large. We all do things in groups like a herd. And I do sell out of losing positions, or positions that have grown to be too large, or when I feel there is a better place for the money. I do not buy or sell in stages either. When I decide to buy or sell something, it is all done in one trade and swiftly at market prices. I rarely average down as I believe I can always find something better to buy than trying to bring lower my cost basis on a losing position.

cheers,

Mehran

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Between my own and wife’s IRA, Roth IRA, Rollover IRA and 2 taxable accounts I manage a total of 7 different portfolios but do most of my trading is done in just one taxable account. No trades in any of the non-taxable accounts in 2015 so far so everything I have done YTD has been in just one account.

Hi Mehran, it was a very nice summary, but the above makes no sense. Why in the world would you do all your trades in a TAXABLE account. The whole idea is to do as many trades as possible in a non taxable (IRA) account!!! I believe you are doing it just backward, and maximizing your taxes!!!

As an aside, I’d suggest just figuring your total for your whole portfolio as a single figure. Figuring each account separately and the total as well makes eight times as much work. (The way you do that is set up a distribution of stocks on a spread sheet, with the accounts in the vertical columns and the stock symbols alphabetically on the vertical axis. And set up one column as a totals, so you’ll automatically get a total dollar value for each stock in all your accounts combined.

On another spread sheet you just have vertical columns of stock symbol, number of shares, price, and total for the stock. You also have a total for all the stocks at the bottom of that column, and add in all your cash from all the accounts. You’ll have a daily total if you want it.

Best,

Saul

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Is your wife wondering why your accounts are doing better than hers? :slight_smile:

Chris

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Why in the world would you do all your trades in a TAXABLE account. The whole idea is to do as many trades as possible in a non taxable (IRA) account!!! I believe you are doing it just backward, and maximizing your taxes!!!

You are right. But looking at 3 and 5 year results, the IRAs and other non taxable accounts have had better returns. I still do have quite a lot of activity in the IRAs as I do sell out of positions when I feel the investment thesis has changed or market conditions warrant it, like markets going up to much and too fast. A lot of my activity in the taxable account has been with options and I have not requested option privilege in any other accounts. The active account is kind of my high risk account that started as a very small gambling fund. Money that I could afford to lose and here is the story behind it:

As I said in my post I do occasionally sell out of most or all positions when I feel economic conditions or over valuations warrant it. So the story behind my high risk account is that back in summer of 2008, exactly on June 26 when oil was close to all time highs of $148 and the crash of real estate market was in full swing I sold 95% of all my stock holdings in this taxable account and over 65% of holdings in all other accounts, except my wife’s 401K because she asked me not to, and went into cash. Among other things, I was involved in the home building business back then and had many friends in the home building industry and I was witnessing the massacre that was going on first hand and came to the conclusion that the markets were due for a crash and decided to sell, specially with the $148 oil putting so much pressure on the economy and consumers (remember those $5.50 a gallon gasoline and gas lines back then?.) So, I only left about 15% of the cash in my taxable account as play money and took out the rest for other investments that made sense at the time. So, my now very small taxable account became like a game for me.

I almost never short stocks or options, but with oil at $148 it made sense to me that it had to come down. So, I started shorting oil at $141 and shorted home builders for a few months in small option transactions and started making some money with my now very small play account. By September, my play money account had already doubled in value. Then the September crash and the financial meltdown hit the markets. Having been a retailer and importer of products from overseas for years, I quickly came to the conclusion to short retailers and railroads and continued shorting commercial real estate firms. Then in November of 2008 and after huge market drops, I switched sides and went long on everything, including financials in the form of a leveraged ETF of FAS that was just created in November of 2008. I wasn’t sure which bank will survive, but I knew that banking as a whole would survive so an ETF made a lot more sense to me than trying to pick a single bank. A bit too early in hindsight, but I had escaped the big crash with most IRA accounts in large cash positions and my play money account now quadrupled in just a short few months. By next summer, my play money account was showing gains of over 900% in just one year and this was in year that most investors got their head handed over to them. So, I took out triple of my original play money out again to invest in real estate and I am now playing with the houses money plus more. But it was now real money and I had to become more conservative and the game was over.

Have you ever been in a poker game and no matter what you did you ended up winning? 2008-2009 was that kind of a game for me. I could do no wrong and almost every market bet paid off. But I am under no illusion that I can keep doing that and I do not recommending anyone treat their investments like a gamble. I still view it like a game with many rules and we are all trying to beat the game. If my play account was large, I would have probably never done the same trades I did back then. I have also been through the crash of 2000 when I saw my portfolio get cut in half very swiftly, although it was mostly the 1999 .com boom profits that disappeared. That was the time that I still believed in the by and hold for ever mentality. The time that I thought stocks will always come back quickly and that crashes are temporary. But I learned my lesson and now if I see a stock chart is going up in a parabolic fashion, it is my clue to get out.

cheers,

Mehran

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Mehren, what an incredible run you had.

As I said in my post I do occasionally sell out of most or all positions when I feel economic conditions or over valuations warrant it.

It’s not very practical to attempt that when your accounts get bigger. It’s like turning an aircraft carrier in a tight u-turn, instead of a little speed boat. As you said later on: But it was now real money and I had to become more conservative and the game was over.

So the story behind my high risk account is that back in summer of 2008, exactly on June 26 when oil was close to all time highs of $148 and the crash of real estate market was in full swing I sold 95% of all my stock holdings in this taxable account and over 65% of holdings in all other accounts, except my wife’s 401K because she asked me not to, and went into cash.

Turns out to have been a brilliant decision! I did something similar when I sold all my internet positions in Jan 2000, but I’ve never had the guts to short anything, so your results were several times mine!

Best,

Saul