InvestmentsPersonal Finance

Portfolio Performance: Year One

It’s a double milestone here at wealth from thirty. Today is the first full year I’ve been running the WF30 portfolio which holds my personal stock investments.

The second milestone is that this is my 100th post!!!! 🙂 🙂 🙂 Wooooohooooo!

I didn’t imagine starting out that blogging could be so enjoyable or that I’d have talked with so many of you about FIRE, investing, travel and non-alcoholic beer (Team CF I’m looking at you, – Bitburger Drive! comes out on top!). Thank you for reading and to those of you especially that get in touch in the comments and twitter. It’s a real pleasure.

I can’t believe I’m saying this but my wordpress lit up just after I published this post with a little notification about a Rockstar Finance Feature. (My life’s complete 🙂 🙂 🙂 🙂 ) That just made this remarkably memorable day on the blog!


One year performance isn’t enough to judge portfolio performance. In as much that it can create a short term focus, its a terrible metric. I think 5 years is probably the minimum for a good evaluation. My goal remains to generate a decent return p.a. over the next 5 years.

I’m also comparing my investment strategy against the market over that period. If I underperform or just barely outperform I’ll gladly move on to index investing and save myself the time, fees and energy involved in stock selection. I’m lucky that I enjoy learning about different companies and investing but it’s yet to be seen that I’m any good at it.

Over the past 12-months, the ASX300 has increased 1.10% and provided dividends of 4.42% for a total return of 5.52%. International markets, measured by the MSCI World Total Return Index has soared 17.10% including dividends. It has been a rewarding year for investors in the world market!

It has also been a volatile year with threat of war, economic and militarily, the US exiting the TPP, the UK commencing it’s withdrawal process from the EU, global political scandals and at least in Australia, a royal commission into the banking sector.

The WF30 portfolio returned 21.81% for the year, including a 2.96% grossed up dividend yield.

This is the money weighted or IRR which takes into account the timing of cash flows.

The chart below shows the hypothetical value of $10,000 invested at April 20 2017 to now, with dividends reinvested.

Portfolio Composition

Currently I own eight companies, two Australian LIC’s and two UK Investment Trusts. I sold two companies earlier in the year and made a partial sell of Smart Parking when it reached a position size limit.

The top contributors were Smart Parking Ltd (SPZ.AX) up 133.84% and Pepper Group Ltd (now delisted), sold for a total return including dividends of 29.77%.

The biggest detractor was Reckon Ltd (RKN.AX) returning -17.73%.

The investment trusts Aberforth Smaller Companies and Finsbury Growth and Income Trust and LIC’s Cadence Capital and Barrack St. Investments have performed adequately and provided some much needed diversification. None of these are likely to shoot the lights out but should provide decent returns over time. With the AUD falling against the GBP, the UK investment trusts got a boost.

Key Lessons

Here are a few key lessons I’ve learned investing this past year:

Unforced errors. Probably my biggest transgression this year was making a couple of investments in undervalued but average companies. One in particular (Reckon) was difficult for me to value and left me with an obscure holding in Get Busy, listed on the LSE Alternative Investment Market – a difficult market to buy/sell on Australia. I hold the actual paper stock certificates. I continue to hold Reckon in the belief that it’s undervalued and that the sale of their Accounting arm may yet be approved by the ACCC but the original sin – as it were – remains. The lesson – stay patient and let the average ones pass by.

The Coach and the Play Stealer. An excellent article on Farnam Street discussed first principles and how we each fall somewhere between being a coach and a play stealer with most of out decisions. Below is a snippet that really stood out to me:

My friend Mike Lombardi (a former NFL executive) and I were having dinner in L.A. one night, and he said, “Not everyone that’s a coach is really a coach. Some of them are just play stealers.”

Every play we see in the NFL was at some point created by someone who thought, “What would happen if the players did this?” and went out and tested the idea. Since then, thousands, if not millions, of plays have been created. That’s part of what coaches do. They assess what’s physically possible, along with the weaknesses of the other teams and the capabilities of their own players, and create plays that are designed to give their teams an advantage.

The coach reasons from first principles. The rules of football are the first principles: they govern what you can and can’t do. Everything is possible as long as it’s not against the rules.

The play stealer works off what’s already been done. Sure, maybe he adds a tweak here or there, but by and large he’s just copying something that someone else created.

I’d like to say I have a talent for investing but the truth is I’m learning. I’m figuring out how to evaluate a company’s balance sheet and how to value a business via DCF and other methods. I’m learning about portfolio construction, position sizing and diversification. I get a lot of my initial investment ideas from others – from Martin Roth’s Top Stocks, from disclosure statements of fund managers I respect and admire and from other bloggers. Essentially, I’m still more play stealer than coach. I try and evaluate these leads thoroughly before deciding but I’m yet to fully stand on my own two feet. The lesson – don’t be deluded. A rising tide lifts all boats and I’m still mostly a play stealer.

Of Course, Graham was Right. Ben Graham famously said “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” It has been a volatile year on markets and some of my holdings have wriggled around like worms on pavement after a rainy day. All of my investments have been made with time horizons of years rather than days or weeks and the short term variations in price are largely meaningless. I still have pretty significant emotional reactions to these gyrations! The lesson – eyes on the horizon.

How are your investments going this year? Feel free to leave a comment below.



4 thoughts on “Portfolio Performance: Year One

  1. Congratulations WF30 both in respect of performance and also your 100th post. A TR of 21.8% is good going and I wish you well for the coming year…hopefully build and consolidate!

    1. Thanks John! It was really neat to have a portfolio review for the 100th post. I’m looking forward to the upcoming year investing. Yet to really build the core of my portfolio but it’s coming along well. Nice to see you here again 🙂

  2. Hey WFT, big congrats on the 100 post milestone and Rockstar Finance Feature! And a fantastic first year result with the portfolio – nice to be ahead of the game early on!

    Love your analogy of ‘wriggling around like worms on pavement after a rainy day’ – hard not to get a bit queasy if you sit and watch them wiggle about! Just let them be to slide on to wherever they are destined to end up, and try not to interfere too much 🙂

    Cheers, Frankie

    1. Thanks very much Frankie. I was pretty stoked with the 100th post turning out to be a portfolio review but to get the Rockstar Finance feature just made my week :):):)

      Markets hey – I’ll let them do their thing. Even the indexer should be able to forget about those wriggly worms!

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