lundi 25 septembre 2017

Faithful = boring

It's harder to write some post as I'm more and more faithful to my stocks.

My portfolio management is much more passive and less passionate than it was in the past... In this recent past when everyone, me included, got a boner when Jason Donville said something on BNN about a brand new stock.

Now, I follow only my 20-22 stocks (almost). And I go to stockchase about once a month, and for 3 or 4 minutes. Not interested anymore about the canadian "experts".

What's the most exciting thing I do? I add to existing positions which are cheaper than usual. And that's all. It's much less exciting than when I was looking for a new sensation.

Even though I made a lot of mistakes in my investing years (from fall 2008 to today), my portfolio grew in an amazing way with a combination of great performance for some years and great savings for other years. I've written about it in the past, but with my savings, I've managed to grow the portfolio and mitigate a lot of the impact of my bad decisions.

See for yourself (growth from year to year since may 2009):

May 2009: (year 0)
May 2010: 75%
May 2011: 41%
May 2012: 38%
May 2013: 31%
May 2014: 50%
May 2015: 54%
May 2016: -8%
May 2017: 22%

What explains the -8% performance of 2016? Of course, it was Valeant, Concordia Healthcare and Allergan (to a lesser extent).

Isn't it great to see that? A lot of people could do the same if they tried to live their life in a reasonable way. I don't think I've done a miracle here. And I've never had an incredible income. It's always been more than the average of the people of my age, but not that much. In the recent years, it's been comfortably above the average, but I'm definitely not rich.

It's cool to approach your 40's and see that you won't have to bother about your retirement. And to see that 10 years of investing have made you at least an OK investor. And now, you won't have to save that much money every year. You just have to do the right moves with your portfolio and avoid bad businesses. With 10 years of experience and some fiascos along the way, you should be able to avoid catastrophes.

With your annual savings making less and less difference on your total portfolio, you can spend a bigger part of your savings on things you like. And, more important, you can survive to a big kick in the crotch from fate.

Start now. While you're in your twenties. Save your money. Buy some great stocks with a high ROE and growing free cash flows in the last 5 years.  Do it NOW.

You'll be able to concentrate on other problems than money when you'll be 40.

5 commentaires:

  1. This is an amazing performance. The last two years were the only ones where you did not increase your portfolio by at least 30% per year. Very impressive. With your great wealth and modest income, it will be hard to affect the numbers with savings moving forward. If you made 15% per year moving forward that would be hugely impressive. Afterall, you are in the top 1% of wealthy Quebecois.

    1. I'm surely not among the top 1%. Probably among the top 10% however (on an income basis).

  2. I am in awe in the shadow of your performance, Mr Penetrator...well done!

  3. Frugality plays a huge role but as the portfolio grows, power of capital gain on growth stocks really helps accelerate it. Result is often mind-blowing.