To :- Paul Senior and Grommit and others.
Way back in July 2006, on the "Value Investing" Board, between messages 24190 and 24220, I received a lot of scepticism and disbelief that an investor could achieve a regular annual return of 40% per annum on one’s stock market investments, especially if one had a relatively small number of shares in one’s portfolio.
At the beginning of this year I put three stocks into the Header of my Board at "Fundamental Value Investing" for ALL to see.
This was further to my previous declaration where I indicated a 7 stock portfolio consisting of ANST, AOB, BRY, HANS, IPS, NATH and PDX which had achieved an equivalent annual Capital Gain of 50.8%.
These latest three stocks were AOB, AVTR and EBIX, which were all under $5 billion Market Cap.
After 5 months the current Net Capital Gain of these three stocks stands at about 43%.
So, theoretically, I could now sell these stocks, put the proceeds into a fixed deposit account until the 1st. January 2008, and start all over again !
AOB has fallen back slightly, which doesn’t altogether surprise me because its last set of Financial Results showed a slight fall back. Because this company has had such good Fundamentals up to now, I’ll give AOB until its next set of results come out, or until it issues a prior "profit warning".
After all, "one swallow does not a summer make !"
This strategy is based on buying, or selling, stocks at, or around, the time they publish their Results because that’s when you know most about their "financial affairs".
It’s also NOT based on Diversifying into several dozen, or more, stocks. Because, as Mr. Buffett also advises, "why put your money into the 20th. Stock on your list ?
Rather put more into the top 5 to 10 stocks (Especially if that company’s Fundamentals supports one’s Buying decision. Eventually the Quality of those Fundamentals will be reflected in its price trend)."
I’m in the process of putting another 5 or 6 stocks into my Board’s Header. These are stocks with Market Caps greater than $5 billion.
I will also regularly indicate their progress.
Needless to say, this stock selection is based, primarily, on interrogating those Income Statement and Balance Sheet items that I’ve referred to in the Header of my Board.
It’s also based on a 6 month (and no greater) forward projection of a company’s price rise. |
