dimanche 28 janvier 2018

Compound annual growth since 2011

I've recently took a look at my portfolio over the last 7 years (end of each month of january since 2011). It turns out that my compound annual growth rate is exactly 30% for these last 7 years.

Isn't that great?

When I look back at my portfolio over time, I'm surprised to see how many not so good companies I've owned in the past. Well, they had some kind of momentum, but many of them didn't have an history of success.  For instance, a big percentage of my portfolio was invested in Cipher Pharma and Rifco, 4 or 5 years ago.

I can't help but be speechless imagining how things could have been for me if I had made better choices. I'd probably have gotten something close to a 50% return annually if I had chosen back then the stocks I chose now.

Obviously, like I wrote a few months ago, a big part of that performance comes from my discipline. I deserve congratulations much more for my savings and way of life (I own the same cheap car since 2010, I don't eat that often at the restaurant, I don't buy things I don't need...) than for my investing skills. If I was great at both, I'd perhaps have one million dollars now.

When you have one million dollars, can you retire? I think so. Because the average return of the market is about 10%. So, if you use about 75 000$ of your million each year, normally, the increase of the market will compensate for what you've taken. You'll have to pay some taxes on that amount because it probably won't come entirely from you TFSA (CELI en français), but you should have enough to live in a decent way.

Retirement or the possibility of a retirement is my goal for my 50th birthday. 

10 commentaires:

  1. A very impressive performance, Mr Penetrator...and a good example of how the little guy can invest for himself and do very well without any help from the big financial institutions.

  2. Here's one to add back to our portfolios on Monday -- Richelieu Hardware now that it has pulled back.

  3. Congrats!! That's pretty impressive.

  4. You are preaching to the choir. Kudos and keep up the great work, J.

  5. First off, for those interested in Richelieu... Why do you think it is still too expensive?

    I also look back at past decisions made to my portfolio. Unfortunately some impaired returns. It can be frustrating at times, but patting ourself on the back for the good ones is what we need to do. Keep on doing what you do.

    1. I’ve looked at RCH once again and it’s about as expensive as the market. The growth is not explosive but they have a lot of cash and no debt. So it’s surely not a sell. A buy perhaps, but at 22 times forward earnings, I see other opportunities.

  6. RCH stock returns +14% per year over a 15 year period. Buying it on a 10% dip may not be a bad idea.

    p.s. amazing returns Penetrator! Worth 1 billion on the street.

  7. Markel and Richelieu both up +2.2% in these markets.