This weekend marks the third year of my ‘proper’ investing journey (i.e. investing with a decent amount of money). Whilst I have been investing for longer than that, it was with far smaller sums, and fortunately I made most of my mistakes during this time. So today I wanted to share a few things I’ve learned that may help others going forward.
I finished re-reading Ben Graham’s ‘The Intelligent Investor’ earlier this week. There’s little needs saying about this book, as any investor worth his salt has read it. Amongst the many, many important concepts and ideas Graham illustrated, one stood out to me that I hadn’t considered before.
One of my favourite investing aphorisms is the following:
“Don’t just do something, stand there!”
The line has been attributed to any number of people (Eisenhower and Clint Eastwood amongst others), but has since been appropriated by the investing world. Well, this year so far has been a true test of my ability to resist doing something in my portfolio.
For those of you following my quarterly CAPE updates, you’ll know I have been tracking the ten cheapest markets worldwide, as listed on starcapital.de. Last year saw a fantastic before-fees return of 25.59%.
I have started the same process again this year, with a post early in 2018 kicking it all off. You can read it here.
For those of you in a rush, portfolio returns year to date have been 3.19% against my benchmark (FTSE All-Share TR) having returned 1.69%. So the good news is, in this second quarter I’ve swung from a 10% negative return to a 3% positive return. Since inception in August 2015 the portfolio has returned 70.55% against 22.30% for the All-Share. Therefore the compound annual return for my portfolio is 20.09% going into my fourth year of investing. You can view the portfolio here.
I loves a bargain. Running my screen recently led me to Van Elle Holdings PLC, a company definitely meeting that criteria. Van Elle currently trades at a shade over seven times earnings, and only 0.67 times sales. It yields approximately 3.6% as well. But does it warrant a purchase? I’m going to enlist the help of one of my current holdings to try and find out.