The STRIDE Blog

#4 Little Acorns: Happy New Year! Portfolio 5% Ahead

littlestrideacorns-portfolio-beats-market-by-52015 has started very happily for the Little Acorns portfolio.

After exactly two months of trading, I'm up 2.7%. Consider that during the same period the S&P 500 is down 2.31% and I'm even happier: I'm beating the market by 5%.

January. First month in a brand new year. This is the time when we can't resist taking stock, identifying problems, making resolutions and changing track. For most of us, this is usually tied up with the desire to exercise off the roll of Christmas pudding that has appeared around our waists.

But what if nothing's broken and nothing needs fixing? What if patience is the only thing that needs exercising to see great results? This is certainly true of my portfolio. I've done nothing but sit and watch for two months and it's in profit 2.7%. If only seeing results in the gym required similar effort.

Financial journalists are rather busier. The flood of bad news stories streaming across the financial press at the moment - slumped oil prices, Swiss stocks falling, the FTSE 100 suffering a third straight week of losses, to name a few - are keeping them pounding their PCs. For me, it means there should be some great bargains around.

8 Week Summary

I went away this Christmas and made a conscious decision not to obsessively look at my stocks, despite knowing how the market was falling. It was tricky for the first couple of days but once the holiday vibe kicked in, it wasn't so tough!

One of the great things about value investing and being in it for the long-term is that once you've selected stocks you can sit back and do nothing. In fact, it's really important that you do. Actively living this philosophy was a refreshing exercise for me. Seeing such a healthy profit in two months has given me a confidence boost and I'm really keen to add to my stocks so that I can do more of sitting back and doing nothing. 

Check out the S&P 500 performance below:

SandP_16.01

Last time I mentioned that I was keenly watching Mondadelphous as a company I'd like to buy. Man, am I glad I didn't buy when I thought I would. I am still convinced that this company will prove to be a fantastic value stock - just not yet. Timing, as they say, is everything and the STRIDE timing engine has yet to flag this as a buy. The price rallied for a while in December and I felt sure that it would become a consider buy by now: but no. It has since tumbled again so I'm still waiting. 

My big missed opportunity is Being (JASDAQ: 4734). On November 14th 2014, the day I set up Little Acorns, Being - Japanese provider of construction-related software products - was high on STRIDE's target list. I should have bought it. I didn't. I can't remember why I didn't either, but I've a horrible feeling I made the stupid mistake of allowing some misguided preference to get in the way.

Certainly, I already had Avant in Japan (currently break even) and once the Japanese recession was announced, I didn't want to buy any more stocks there until there was a clearer picture of what might happen in the markets. But this showed me how important stock selection is over market performance as a whole: this stock is up 40% in two months in a place that is currently in recession. If I'd have bought Being shares that day I would have paid Y518. Exactly two months later they are trading around Y914. Silly me.

Considering my 4% fees, I'm really pleased at the speed of turnaround so far. I'm also very impressed with the STRIDE timing engine - looking at both Being and Monadelphous - and will be paying particular attention to this in the future.

Biggest gainer - C-QUADRAT : +35.74%

Biggest loser - Polar Capital Holdings: -18.26%

Current overall portfolio value: $108,226.28

Here's my portfolio update email from 16th January. Compare with my last update here

LA_16.01.15

 

 

Topics: 3D Value Investing, Little Acorns Portfolio

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