2018: A recap

For 2018, the Penetrator portfolio achieved a performance of 4%. 

The S&P500/TSX achieved a performance of -12%.

The relative performance of the Penetrator portfolio has been about 16%. 

The year has been an active one. Out of 22 stocks held at the moment of this writing, only 10 were owned at the beginning of the year. But the biggest positions have been steady. 

I've probably beaten the index because my portfolio is well balanced (learning to pick great stocks is not that hard, but learning to balance a portfolio is a bit harder, in my opinion). And my portfolio has also a low beta, which is interesting at any given moment but even more in times like these. A low beta is great because you manage to face the wind with less worries than many investors.

Talking about the wind, I talked recently to my friend whom I initiated to the stock market about 2 years ago with stocks like Apple, Biogen and MTY. At the beginning he listened to me. But then, he started to listen more and more to some gamblers. And he put a lot of money in weed stocks. These stocks went up and up and my friend was very excited about his performance. I said to him many times that I wouldn't put money there if I was him, but as a casino player, he put more and more money. And he felt that making money was very easy. But he didn't understand why he made so much money. 

And then, a market crash happened and his portfolio lost something like 40% of it's value. 

He said recently to me that he was looking for the right moment to sell everything. But, everyday, the market went lower and lower. So, his waiting made him lost 5000$ more every day. And his father, who lost maybe 10 or 20% of his very recent portfolio managed by his son decided to sell everything because he didn't have the nerve to face the storm. 

Probably that most people coming here are not in that situation. They know what they own. They know the sectors which are bubbles. They know that storms come and go, such as bull markets. But when everything looks easy, many people jump on the train and, after achieving easily a performance of 20%, they feel invincible, they listen more and more to people talking about gold, silver, bitcoins, weed... and they gamble more and more. And they lose 40% of their portfolio while someone who knows what he does manages to achieve a performance of something between -10 and 10%. 

I feel a bit bad for my friend because I realize he's not a real investor. He's a gambler and as long as he won't be interested in what he owns instead of the performance he gets, he's doomed to repeat his mistakes, or just sell everything with a loss and look at another way of making money. That's perhaps the story of some of your friends too...

With my 4% performance, I'm not that satisfied, but I've beaten the market by a wide margin. So, how could I be disappointed? And more, I haven't lived a single traumatism in 2018. No lesson learned the hard way. Experience serves, at last. 

So, here's what it looks for the Penetrator Portfolio, at this end of 2018: 

Performance of the portfolio: 4%

Relative performance VS the market: 16%

Number of stocks held: 22

Average ROE: 42

Average forward PE ratio: 18,7

Average Beta: 0,7

Average growth estimated for next year: 14% 

Predictability of the portfolio: 85%