Q3 2017

Portfolio Performance – Q3 2017

It’s been another fine quarter for the portfolio.  Total return year-to-date now stands at 35.98%, representing an increase of 14.86% for Q3 2017.  By comparison, the FTSE All-Share Total Return index has returned 7.75% in 2017 so far.  Since inception in August 2015, the portfolio is up 57.47%, against 17.9% for the FTSE All-Share.  A healthy 39.57% premium to my designated benchmark.  You can view the current portfolio here.

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Cheaper

Stocks May Be Cheaper Than They Appear

If you read any of my company valuations posts, you’ll know I like to incorporate a discounted cash flow model when looking into the merits of a business.  Make no mistake however, this is but one tool to be used when investigating a company, and obviously does not work under all circumstances (i.e. companies that don’t generate positive free cash flow).  A discounted cash flow valuation can be as simple or as complicated as you want.  I’d like to explore that idea a little bit.

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Keynote 2017

Apple Keynote 2017 – First Thoughts

The worst kept secret of the year was finally unveiled tonight.  Apple are indeed releasing a ten-year anniversary iPhone, dubbed the iPhone X (Ten).  This will sit alongside (or above, given the price) the standard range update of the iPhone 8 and 8 Plus.  No doubt there will be 64,000 articles written on this by the end of the week, and I’d not be so presumptuous to assume I offer any new insight, but as a shareholder of AAPL I have a few thoughts.

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Can You Pay Too High A Price For Quality?

This past week I have read two somewhat opposing thoughts on valuation.  Both are an attempt to consider whether you can pay too high a price for a company.  The first is an excerpt from Scott McNealy, formerly of Sun Microsystems, talking about the irrationality of paying ten times revenues for his company.

The second is a valuation of Microsoft in 1990, attempting to determine what a fair multiple would have been to pay to obtain a sufficient rate of return on your investment.

With thanks to Twitter users @jtepper2 and @BadaBingCapital.


Sun Microsystems

High


Microsoft

High


Happy Investing!

 

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