Adiós 2017. Bienvenido 2018!- BeSmartRich’s Portfolio update- 2017 6


Happy new year everyone!

It has been a while- Almost 2 weeks since last post about bitcoin?

I wanted to take some break from almost everything- working, investing, writing etc… but invested my time with friends and my family with lots of chats, food and drinks. The holiday is over now though and one must go back to work.

The present was definitely worth it. It did not take too long for my doggy to decimate the supposedly strong dog toys. Atta girl!

2017 was an interesting year for me.

I further refined my strategy and made sure that I stay away from speculative stocks.

I listened to my inner voice and picked stocks based on my homework.

 

My gambling money and what I missed

For fun gambling money, I assigned only less than $5,000 at a time thinking I would be alright to lose all but I would make sure to bet on stocks that likely to double or triple due to herd mentality of almost nearly killing well managed cash cows for major mistakes or change of regulations etc.. I picked the companies that are cash flow positive bringing in annual cash flow of as much as their current market cap at some cases.

That happened with Orvana Minerals which I sold at over 200% gain

Home capital group which I sold at $16-$17… another over 200% gain

CRH medical which I initiated at around $2 which is on the move… which I am sure I will let it run as much and sell off when I feel like I start to lose sleep.

One thing that I did not do is investing in bitcoins when it was around $5K per coin or so which would have been under my gambling money budget but would not fit cash flow criterion.

The same goes for WEED when it was around $7 or so in June 2017 just became $35 or so.

Oh well… I may have to further refine my gambling strategy in 2018… Maybe I can ignore cashflow criterion and add ‘extreme hype’ criterion.

GARP strategy is great and all but at the end of the day, what counts is who made higher return on capital and we gotta have fun while making some money anyways so I would not really change the restriction of amount I invest in gambling investing (which is maximum $5K) but I would keep my eyes open on extreme sentiment and hype and its driving power. Only goal in this is do not end up the greatest fool  🙂 

2017 performance

In general, I did alright in 2017.

Returned 18.47% of time-weighted return whereas S&P/TSX composite TR index of 9.1%.

If I use Money weighted return then I returned 19.39% in 2017. Not much difference.

Here is how I did since inception of my short DIY investing career. My goal of investing myself is to beat the markets most of time. I would be happy with beating at 80% of time. Since about 85% of my investments are Canadian based, comparing to S&P/TSX index would make senses.

This year was good. I beat the market by a wide margin of 9.37%. If you have $500,000 then that’s $47,000 difference which shows importance of having higher capital.

My annualized return is at 13.35% since inception so I am getting really close to 15% which would double my investment every 5 years (That’s another goal of mine)

Goal 1- Beat the markets at 80% of time

Goal 2- Annualized return of 15% to double my investment every 5 years.

Goal 3- Try to have fun while at it?

If I did not make one important mistake which was holding on to my losers then my returns would have been 22-23% but admitting your own mistakes and cutting the losers is often hard to do psychologically. I eventually did it though so I feel better now…

2018 strategy

I will continue to exercise GARP strategy which fits my personality- Growth combined with Value. I like cash flows and earnings to fall back on if market sentiment changes. I have been envious of growth investors in 2017 where they returned significantly higher than my mere 19.39% but again, my preference is to sleep well at night and having constant cash flows by intelligent and reliable insiders who are superior capital allocators.

Towards the end of 2017, I picked two venture companies. One with growing cash flows and the other one with hidden assets that could be worth 5-6 times of their current market cap.

I may tell you what I picked later if I make some money off of them due to their somewhat speculative nature. (although I think them as very calculated investments but being in venture exchange alone is far riskier than not).

What I wish for in 2018?

I really hope that this bull market is over in 2018.

For someone like me who have constant paycheques to invest every month, this bull market is not really helping me at all. I have to spend far more time to look for hidden values among growth stocks because everything is expensive…

Think about 2007-2008 credit crisis. If I had my monthly income and actively invested in 2007-2008, I would have done far better than what I have done last 3.3 years or so.

Although we had a good short correction from the end of 2015 to early 2016 which was really good time for me to buy stocks at cheap and gained solid returns in 2016, I really hope for 2018 to be more correctional year…

I know you would hate me saying that but you will get this idea eventually.

There is nothing better than short- mid term severe corrections.

There is nothing making me more sad than seeing this bull market continues…

Happy new year everyone. Wish you all the best!

Here are my most popular posts.

I recently put Warren Buffett’s top 50 quotes together. Check it out.’

Don’t forget about his stock picking tips!

Have you heard about Peter Lynch, a Wall street legend? Check out Peter Lynch’s top 13 best stock picking tips as well. You won’t regret it.

Why Quality matters the most!

Why Quality Matters the Most- Linamar, MTY, Enghouse, CGI Group and Google

Don’t forget to do your homework!

I also shared why cash flow is so important when you buying any stocks

You should ask this question before buying anything!

Also importance of not waiting too long when you find great companies

Importance of insider ownership- especially founders

Many people like this post as well.

I recently restructured my portfolio and changed investing style

The result of restructuring

I just love depressed markets… I know what you are thinking…

This was interesting

Classic Kevin o’leary post was quite popular.


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