Shared Investor 2016 Annual Review

Shared Investor 2016 Annual Review

With my Australian Blue Chip Portfolio returning 16.34% since inception compared to the ASX300 index return of 6.54% and my Margin Loan Portfolio returning 4.46% compared to the ASX All Ordinaries return of 3.54% both portfolios are currently outperforming their relative indexes. However, my portfolios are underperforming my personal goals. I’d prefer if my Australian Blue Chip Portfolio was over 30 or 40% and my Margin Loan Portfolio was over 15 or 20%.

Both my portfolios are currently out performing their relative indexes, which means my returns are better than if I wasn’t managing my own investments, but they are not the returns that I know I should be achieving (though, it really is too early to judge as three investment cases are yet to play out). To keep on top of my long-term performance I’ve decided to start a tradition of writing down this annual review as a practice for me to stop, step back, analyse the results and see where I can improve.

During this review I keep in mind not to focus on year to year returns, but to focus on medium to long term (5-7 year) returns. With this focus in mind I will not be too critical on short term results, as quite often the investment case for a company has not yet had the time to play out. But, regardless I will still be looking for where I can potentially improve my year to year actions to better position my medium to long-term portfolio returns.


The Results


Australian Blue Chip Portfolio (ASX300)

  • Portfolio inception (start) date: 9/12/2014 
  • Return since inception: 16.37%
  • ASX300 return since portfolio inception: 6.54%
  • 8 investments made in 4 companies since inception.
  • Number of investments sold: 0
  • Best individual investment return: 186.46%
  • Worst individual investment return: -48.66%


Margin Loan Portfolio (ASX All Ordinaries)

  • Portfolio inception (start) date: 1/07/2015
  • Return since inception: 4.46%
  • ASX300 return since portfolio inception: 3.54%
  • Current Gearing ratio: 0%
  • 3 investments made in 2 companies since inception.
  • Number of investments sold: 0
  • Best individual investment return: 45.93%
  • Worst individual investment return: -22.96%


International Portfolio (MSCI World IMI AUD)

Not yet investing. Depending on the markets and Australian dollar I may start investing internationally in a few years time.



General Improvements

What I need to improve across all portfolios:

  • Patience: In hindsight I have realised that when I first started investing again, after I sold down my previous personal portfolio, I was too trigger happy to get back in the game. The worst part is, I knew it. I even wrote about it in my Checklist on the first investment – specifically saying, “To be completely honest with you, strictly to my rules, I shouldn’t have bought this stock.” The investment was an Asset Play, but one with more risks and uncertainty than I would usually take. That all said the investment is still under priced when compared to my sum of the parts calculations, so I will continue to hold it. This investment won’t turn into a tragedy, but it more than likely won’t be great and even if it ends up to be a decent return, it will not be a ‘decent investment’. Lesson learnt.
  • Preparation: There have been a couple of missed opportunities that have been great companies that briefly dropped below my buy price, but I didn’t have a bid in with my online broker. With the erratic movements of the share market sometimes you will only have a day or a few hours to buy some shares when the price is down, before it shoots back up again. After missing two of these mid year I have now refined my notification system to ping me when a company I am watchings’ share price is a couple of percentage points above my buy price and then at the buy price. Missing these two wasn’t the end of the world, but my portfolio would be performing slightly better had I not missed them. Lesson Learnt.
  • Distractions: My curiosity is a blessing and a curse. Like everyone else my time is limited and I also don’t want to spend every minute of my spare time in front of a book, annual report, newspaper or screen. To make better use of my time I am beginning to get better at focusing on researching companies and reading less opinion pieces. Every now and then I have found an investment from an opinion piece, but more often than not I get distracted. Though I always learn something new, and it’s usually pretty interesting, I’m not actually doing the work. I need to get better at balancing ‘expanding my knowledge’ and ‘doing the work.’ Lesson Learnt.



Specific Overview of Holdings


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Plan for this year.

I do not practice the pointless art (in my opinion) of trying to make market predictions; Will Trump start a trade war? Will the American markets tumble? Will the high levels of borrowing catch up with us? Will the Australian housing market crash? Who knows to all of the above.

I simply keep watching for opportunities to purchase great businesses at fair to cheap prices, cyclical businesses at cheap prices and cheap businesses that are trading at a discount to their net tangible assets. This practice has served me well over the years and helped me to avoid getting wrapped up in the excitement of market bubbles or scared off by the panic of market corrections. I am going to stick with it.

What I aim to do is simply make 4-6 great investments across both of my current portfolios. That’s it. I want quality over quantity. No chasing the next big thing. Just 4-6 great investments that help me to achieve my goal of returning over 15% (preferably 20%) on my invested capital.

If I can do this in 2017, I’m happy. Let’s see how it goes.


Follow my investing in 2017.

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Enjoy the ride!


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DisclaimerPlease remember, I don’t make recommendations, give advice or manage others money – If that’s what you are after, sorry I or this website can’t help you (see the TOS). Readers should not rely on information contained in Shared Investor for Share market, equities, securities or any financial related decisions but should seek licenced professional advice.  Shared Investor does not give or purport to give investment advice or make any recommendations whatsoever in relation to any securities mentioned in Shared Investor.  What I do is purely share my story and my investments exactly how I manage them.  I do this as I believe there is great value and enjoyment in observing the experiences of others, especially when it comes to investing.  Enjoy the ride!

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