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July, 2015: 4 25
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. |
7/4/15-I was out of town helping out after my mom had surgery in late June and so am running late getting the quarterly report out. (Here it is below, however, with just a couple days' extra market activity added.)
The following is my regular summary of quarterly results (statistics through 7/2/15) 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 | 3.18 years | 46.35% | 12.71% |
| Dividend Value | 5/20/11 | 1.35 years | 9.20% | 6.75% |
| Low Price to Book Value | 5/14/09 | 1.28 years | 12.47% | 9.59% |
| S&P 500 Index (SPX) | 5/14/09 | 6.13 years | 132.59% | 14.75% |
Observations:
Things remain essentially unchanged since the end of the first quarter, 2015, with respect to how our model portfolios have done compared with the S&P 500 Index. That index has continued to "kick butt."
One takeaway may be that a diversified, value oriented approach is better immediately following a bear scare, in the early stages of a bull market (when beaten down small-cap stocks, such as value investing tends to emphasize, historically have done substantially better than the larger, more stodgy equities that make up the S&P index).
A possible way to capitalize on a value investor's relative out-performance at times and underperformance at others, might be to establish glide path targets for one's value equities based on the average total return of a major market index. For example, if targets were set to mirror the average S&P 500 Index total return, one's value securities would be compared through the year to a chart line increasing by 9.11% (on a compound, annualized basis, the amount the S&P 500 index has - on average - added each year, dividends included). If a market value line that tracks one's own bargain holdings lifts significantly above that moving target, then the weakest securities, for instance those with the least secure dividends or earnings or with the then highest P/Bk, could be sold till one's portfolio market value is at or a little above where it would have been if one just held the index. The redeemed amount could be added to reserves and used later to buy good new value bargains when one's own bargain holdings' total market value significantly lags the chosen index's average return.
In our case, we are continuing a policy of each year raising our stocks' total book value by at least 13.5% while maintaining a dividend yield on that book value of 2% or more annually, a combined yearly increase in total value of over 15%. We remain on track to achieve the current target level growth of total book value and yield.
Our nest egg as a whole (equities, reserves, real estate value, collectibles, etc.), though, has crept up only a bit over $4000 in (approximately) the first half of 2015, a gain of 0.33%. In this period (through 7/2/15), the S&P 500 Index is up 0.92%.
Concerning the overall returns of our portfolios, assuming that despite different onsets one could average their performances, a one-third each blend of the basic value investments cited here, bargain dividend stocks, bargain low price to book stocks, and Berkshire Hathaway shares, would have provided an average gain of 9.68% per year before dividends, about 12% with dividends included.
As previously indicated, I take more seriously the closed position returns. Stocks that are still invested will have their ups and downs, yet in some cases may be held till the right time comes along to sell.
Here are the closed position returns for our basic Ben Graham type strategies: a. Low Price to Book Value assets have had average annual gains of +20.32% (about 21.50% with dividends included); b. Dividend Value assets have had average annual gains of +17.51% (about 22.50% with dividends included).
Our total equities' average per share book value continues to exceed their average per share market price, a factor that may benefit the portfolios' results or resiliency in a downturn.
These are the present Low Price to Book Value portfolio open positions: ACAS; AEG; AEL; AEY; AGII; AHL; AIG; ANAT; ATW; AUQ; BAMM; BIF; CDE; CLF; CNA; CSH; CUO; ELP; EZPW; FORTY; FVE; GBLI; GENC; GGB; GLPW; GTE; GURE; HDNG; HIG; HP; IAG; IOT; ISH; KCLI; KELYA; LQDT; MANT; MT; NE; NTT; NWLI; PBR; PFIN; PGH; PKX; PRE; QCCO; REGI; SCX; SSRI; STLY; STRL; SYA; TATT; TCK; TDS; TX; UMC; VOXX; VOYA; and WILC. I may add to some of these positions from time to time.
And here are our current Dividend Value portfolio holdings: AP; BGCP; BRKS; CCUR; COP; CSPI; DEST; EC; ESV; GME; IAG, IQNT; MLR; NOV; PETS; PSEC; RDS/A; RGR; SSL; STO; SUP; T; TEO; TGA; TICC; TNH; TX; UVV; VIV; and WSTG. I may also add to some of these positions from time to time.
Have a terrific 4th of July weekend and third quarter of 2015!
7/25/15-This spring and summer, there have been three distractions, helping out in another city with Mom (age 93 in October) prior to and shortly after surgery plus during her slow recuperation, visiting with other relatives in WI, and handling a variety of matters on my own that we usually do together while my wife had been away spending quality time with her mother. One inevitable result has been less hours devoted to this journal. It is important to me, though, and I intend to maintain it.
No assets in portfolios followed here have been sold since the prior couple entries.
Alphabetically, my current top-five Low Price to Book Value equities are: ATW; BBEP; DDC; PERI; and UMC.
My new featured Low Price to Book Value security is Perion Network, Ltd. (PERI) (recent price $2.51). PERI meets Benjamin Graham's bargain stock value and safety criteria.
Perion Network, Ltd. will be added to our nest egg at its market price in early morning trading on Monday, 7/27/15.
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.