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Disclaimer - IMPORTANT - Read this first!
| Investor's Journal is a diary focused strictly on investments and personal finance issues, primarily from a contrarian and retiree point of view. Follow along with an average guy's failures and successes as he learns, by trial and error, the fine art of value investing. |
7/1/14-No monitored stocks have been sold since the last entry.
The following is my regular summary of quarterly results (statistics through 6/30/14) for the asset approaches followed here:
| Portfolio or Market Index | Date Began Monitoring | Average Asset Hold Period | Average Change | Annualized Performance |
|---|---|---|---|---|
| Berkshire Hathaway, Class B | 6/3/05 | 2.78 years | 40.84% | 13.10% |
| Dividend Value | 5/20/11 | 1.19 years | 15.43% | 12.82% |
| Low Price to Book Value | 5/14/09 | 1.01 year | 19.33% | 19.05% |
| S&P 500 Index (SPX) | 5/14/09 | 5.13 years | 119.48% | 16.56% |
Observations:
As was true at the end of the last quarter, once again the current targets for total equity dividends and book value have been exceeded. Equity dividends are already $20,439, while total equity book value stands at $977,227, less than $28,000 short of the year-end target.
To review, guiding principles here include that our portfolio's total equity book value increase an average of 13.5% or more a year, while maintaining a dividend yield on that book value of 2.0% or better. In the long run, increases in book value generally lead to higher market prices. Most of my wife's and my holdings are in tax-deferred accounts. Given that, everything else being equal and assuming for instance that neither of us has an untimely death just as we enter a new bear market, even after taxes these levels of book value advancement plus dividends are likely to result in average annual total returns of 15% or more.
Through the close of trading on 6/30/13, our net asset value (total after-debt holdings, such as bond and stock assets, reserves, collectibles, and real estate equity) is $1.39 million. The equities portion of this is just over $893,000. Equity market value to book value is 91.42%. A significant portion of N.A.V. remains in money market funds, in case we can take advantage of a correction or bear market by buying assets at significantly greater discounts than are presently on offer.
The S&P 500 Index has continued to demonstrate bull market resilience in the face of a relatively lackluster economy and conditions abroad that could sooner or later have negative implications for the U.S. gross national product. I believe no correction of even 10% has occurred for a few years, and no bear market since late 2008 through early March, 2009. Other indexes are performing with strength as well. How long can their "happy time" persist? Only someone from the future could provide a valid answer. Meanwhile, though hoping to still be substantially invested, I am getting more cautious.
An equal blend of our followed portfolios, if such a combination could be fashioned despite different start times, would have provided an annualized performance of 14.99%. With dividends added, this would be about 16.67%. So (knock on wood) we remain fairly competitive with the gains of the indexes, at least as represented by the S&P 500.
These are the present Low Price to Book Value portfolio open positions: ABLT; ACAS; AEG; AEY; AGII; AHL; AIG; ANAT; AOSL; AUQ; BBOX; BDR; BIF; CDE; CEP; CLF; CNA; COCO; CUO; ELP; EZPW; FVE; GBLI; GENC; GGB; GURE; HIG; HMY; HNR; HWG; IAG; IOT; KCLI; KELYA; LUKOY; MANT; MSN; MT; NTT; NWLI; OIIM; PBR; PFIN; PGH; PKX; PRE; PZE; QCCO; REGI; RFP; SCHN; SGMA; SNE; SSRI; STLY; STRL; SYA; TATT; TCK; TDS; UMC; VOXX; and VOYA. I may add to some of these positions from time to time.
And here are our current Dividend Value portfolio holdings: AP; BGCP; BRKS; COP; CSPI; DCM; EC; ESV; FIG; GME; IAG; INTC; PETS; PSEC; RDS-A; RGR; STO; SUP; T; TEO; TICC; USMO; UVV; VIV; and WSTG. I may also add to some of these positions from time to time.
Good luck with your own returns over the second half of 2014!
7/3/14-The following assets have been sold since the last entry:
- Our Low Price to Book Value portfolio stock, COCO, bought on 8/8/13, was sold on 7/2/14 for a net loss (after commissions but not counting any dividends) of 89.69%. The COCO shares have been deleted from our open positions record for Low P/Bk assets, and the closed position info for 8/8/13 through 7/2/14 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers. The early COCO redemption was necessitated by the near collapse of Corinthian Colleges and its stock having fallen not merely to below a dollar a share but continuing down toward zero. Can this company find a way to stay viable? Perhaps, but there is little evidence of it at this time.
For those willing to accept more risk than I, it does have much more reported book value than its current price, so one might hang in there with it and see what develops later on. Its P/Bk is only .05, so this could be a terrific bargain if COCO finally turns around instead of simply ceasing to exist. Please note that I had sold over half of our original shares last year, when the losses began to be apparent but had not yet quite reached 10%. Thus our average loss for COCO (net of commissions) has been 41.72%. This represents less than 0.2% of our total investments (by now more than $700,000) in low price to book value stocks.
- Our Low Price to Book Value portfolio stock, TDS, bought on 9/28/11, was sold on 7/2/14 for a net gain (after commissions but not counting any dividends) of 24.21%. TDS has been deleted from our open positions record for Low P/Bk assets, and its closed position info for 9/28/11 through 7/2/14 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers. TDS was sold since it had been held at least two years and was profitable. As it turned out, I also bought TDS at a later time. Those shares are retained for now.
- Our Low Price to Book Value portfolio stock, SCHN, bought on 6/10/12, was sold on 7/2/14 for a net gain (after commissions but not counting any dividends) of 4.54%. SCHN has been deleted from our open positions record for Low P/Bk assets, and its closed position info for 6/10/12 through 7/2/14 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers. SCHN was sold since it also had been held at least two years and was (barely) profitable.
After these three redemptions, our Low Price to Book Value portfolio closed positions total return record has fallen to an annual rate of just over 27%. This has, of course, been achieved during a bull market. No doubt things will look rather more modest once the coming bear market finally sets in. In any case, with the still open positions also considered, this portfolio's overall net annual return remains a little better than 19% before dividends, 20% with yield included.
Am getting ready to be away for the weekend, and I do not have other assets to recommend at this time.
We wish everyone a great 4th of July commemoration.
7/12/14-No assets among monitored portfolios have been sold since the last entry.
Alphabetically, my current top-five Dividend Value equities are: COH; DEST; RGR; UVV; and WSTG.
My new featured Dividend Value security is Destination Maternity Corporation (DEST) (recent price $22.59). DEST meets Benjamin Graham's bargain stock value and safety criteria.
Destination Maternity Corporation will be added to our nest egg at its market price in early morning trading on Monday, 7/14/14.
7/13/14-Alphabetically, my current top-five Low Price to Book Value equities are: ELP; ISH; PKX; SVT; and TDS.
My new featured Low Price to Book Value security is International Shipbuilding Corporation (ISH) (recent price $21.20). ISH meets Benjamin Graham's bargain stock value and safety criteria.
International Shipbuilding Corporation will be added to our nest egg at its market price in early morning trading tomorrow, 7/14/14.
7/25/14-No assets among monitored portfolios have been sold since the last entry.
Alphabetically, my current top-five Low Price to Book Value equities are: EZPW; GGB; HDNG; MSN; and REGI.
My new featured Low Price to Book Value security is Hardinge, Inc. (HDNG) (recent price $12.44). HDNG meets Benjamin Graham's bargain stock value and safety criteria.
Hardinge, Inc. will be added to our nest egg at its market price in early morning trading Monday, 7/28/14.
7/28/14-No assets among monitored portfolios have been sold since the last entry.
Alphabetically, my current top-five Dividend Value equities are: AMSWA; AP; CAJ; CATO; and ELP.
My new featured Dividend Value security is The Cato Corporation (CATO) (recent price $30.30). CATO meets Benjamin Graham's bargain stock value and safety criteria.
The Cato Corporation was added to our nest egg at its market price in early morning trading today, Monday, 7/28/14.
Disclaimer and Disclosure Statement
Neither I nor Investor's Journal will be responsible for losses by anyone who obtained ideas from this site.
This diary is intended for personal interest and general information only. You are advised to do your own research (as well as to consult highly compensated professionals) before spending money on anything.
I know of no reason anyone should take my financial musings seriously. At best I am a dedicated amateur providing a bit of investment-related insight and entertainment, at worst an amusing diversion.
My wife, Fran, and I may at times own shares of some of the assets mentioned here. But neither of us receive any benefit from reference to them, unless you count the mutual misery when we get it wrong, or the opportunity to gloat when we get it right.