The STRIDE Blog

#7 Little Acorns Portfolio: Value Holdings Grow 12% in 4 Months

stride-7-little-acorns-portfolio-3d-value-holdings-grow-12-in-four-months-socialI called my portfolio 'Little Acorns' for a couple of reasons.There was the obvious idiom: "Mighty oaks from little acorns grow," but I also felt a bit like a little acorn myself: rather green, planting everything I had in the most fertile businesses I could find, inspired by the wise old 'oaks' of value investing.

It still feels strange to call myself a value investor, new as I am to all this. It's even stranger to think money can manifest without me having to work very hard for it. I started out my professional life as a ballet dancer: not a job that is known for its established pathways to financial security. Every penny I earned cost (sometimes literally) blood, sweat and tears, and I never earned enough to save anything. 

If someone had told me back then, that in twenty years I'd be managing a growing value investment portfolio, I would have assumed they'd taken more than an acorn to the head.

It's Not Where You Start, It's Where You Finish

Since I started investing my savings in 3D value stocks, it's amazing how many friends and strangers have asked me for advice. They've read my blog posts and watched as my little acorns have started to sprout and, the most amazing and amusing part, they want to know my 'secret'. 

I am delighted that my first steps into taking control of my retirement fund is inspiring others to invest independently, but want to make it clear that there is no secret: all I've done, without wanting to sound like a naff commercial, is follow the STRIDE strategy.

That is not to say the process has been completely effortless. Before I invested a cent, I invested time in learning a bit about value investing, its origins and 'big daddies', Ben Graham and Warren Buffet. I thought I'd need a lot of money to make investing worth my while and was surprised to see what I could do with a relatively low starting sum (STRIDE recommends $10K minimum).  

I read the STRIDE eBooks to get my head around the concept and slowly, I started to believe I could do it.

My rules:

  • I only buy into businesses that STRIDE rates as high-scoring 3D targets.
  • I am working with a Bold investor profile, which gives me the largest choice in terms of targets because it includes businesses of all market cap sizes, from micro to large.
  • My portfolio contains multiple regions, sectors and currencies.
  • I buy roughly the same value of stock in every business.
  • I keep back a bit of cash, in case I do something silly like prang my car (I just did.)

And that's it. 

I started out aiming for a 20 equity slice model. But as my portfolio is growing so much faster than I expected, I'm going back to the Asset Allocation and Effective Portfolio Management eBook to check what I need to do to expand this model to 30 slices.

I was never particularly bothered about making lots of money - a good trait if you want to dance for a living. I've always aimed to simply be comfortable and to afford spontaneous fun without worrying too much about paying the bills. 

My motivation for investing remains much the same. I don't visualise slinking into Monaco harbour on my yacht for tea with the Grimaldis. I do, however, want to make the most of my savings so that, whatever things my children and I may have reason to worry over in the future, money isn't one of them. And for the first time, the long-term financial future into which we're heading is looking bright.

This to me, to quote an actual commercial (sorry Mastercard), is priceless.

Four Months In - Full Summary

Overall portfolio value: $117,279.36

Total percentage gain on holdings: 12%

Total costs including fees: $87,656.32

Unrealised gains: $9096.18

Realised profit: $363.62

Cash still to deploy: $29,623.03

It is really great news that I've made 12% on my holdings since the Little Acorns portfolio began in November 2014. If it continues on this trajectory, I could make 36% this year. That would be amazing but I realise it's unlikely. I'm not that green! I have adjusted my target for this year though. I had 15% in mind when I started out, not wanting my expectations to be too high, which now seems faintly ridiculous. So I'm definitely hoping for 20% now. 

Latest Acquisition

Howden Africa Holdings Ltd: JSE : HWN

My first African stock, Howden Africa Holdings Limited, together with its subsidiaries, is engaged in the design, manufacture, and marketing of specialized air and gas handling solutions. The company operates through two segments, Fans and Heat Exchangers, and Environmental Control. It serves mining, engineering, power generation, petrochemical, construction, refrigeration, water treatment and general industries. Founded in 1854 Howden Africa Holdings Ltd is based in Johannesburg, South Africa. It is a subsidiary of Howden Group South Africa Limited

At the time of writing this is still a STRIDE 3D target, rated 78 and a buy. Fair value is currently calculated at R69.41 and the share price today is R42.51, still some way from the STRIDE consider buy price of R58.19. This is a strong business. Its STRIDE scores, and comparable metrics, look like this:

Howdensscores

Learn more about the STRIDE scores and ratings with this video

With $29K still to deploy, I'm on the lookout for my next acquisitions.

Biggest gainer - C-QUADRAT Investment: 60.98%

Biggest loser - SEAL Inc: -28.96%

Here's my latest portfolio update email. Compare this with my last post here. 

LAemail20.03.15

Sally is a 3D Value Investor and is enjoying market-beating returns. You can do the same. Learn more about 3D Value Investing in our free eBook.

STRIDE's practical guide to value investing for beginners: starting your portfolio

Topics: Little Acorns Portfolio

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