Friday, January 22, 2016

Year End Review

I finished calculating the portfolio returns as we closed out the end of the year. While the portfolio barely had a full quarter under its belt the results were cool to see. Just a reminder I decided to start this with positions I already had in my personal portfolio, and then decided to use the prices of the securities on the date I began the blog to track performance of the individual stocks. It was the only way I could think of that would be fair since there are stocks I'd owned for a few years already in varying proportions. Especially since the point is to buy and hold stocks that are here for the long haul it's more important to track the individual picks, and the performance overall as the years go on. Either way lets get to some of the results which you can view in the Google Doc spreadsheet.

I have quite a few calculations in the spreadsheet detailing the returns from the first addition price, cumulative price, weighted return price, and gains with dividends. I think they all bring some value and will be beneficial to see over time. For me personally the figure that represents the most value is the "Cumulative % Gain w/Dividends" column. The reason being is as time goes on and I make additional purchases it will average out the prices from when I started everything.  As more purchases are made and I buy assets at better prices the performance should be better as I normally like to buy when prices have fallen. In reality I wouldn't have bought all the stocks on October 7th. Although my COST buy was clearly at a recent top, sigh. Everything is what I decided to do though so I'll have to live with it.  

Either way the portfolio returned a negative -.01% from October 7 until year end. If I excluded the SAM purchase the overall portfolio would be slightly up at .03%. The SPY meanwhile had a pretty good stretch gaining 2.84% with dividends. So overall the picks lagged during this time period. The weighted portfolio return was a negative -2.5%. I badly lagged the market in that respect by more than 5%.  I'm hoping 2016 brings betters results obviously.  Hopefully all the info available in the spreadsheet turns out to be useful for plenty of people.

Some things I noticed was how certain stocks have been hammered more than others during this time period. CMI and WAB were down the most at 18% & 16%. Expected considering industrials' in the transport sector have been reeling from commodity price fallout. Also WWAV and HAIN were losers suggesting the healthy trend isn't strong for portfolio results right now. I'm a big believer in both long term as they build their brands. Yet it hurts to see the results. One very surprising loser was CTSH. The company has been growing very well the last year and even raised guidance again. I'm expecting a lot more from them in 2016.

The tobacco stocks did well as all ended the year up in a positive position except BTI. Currently I see PM and VGR as the most attractive, but I'm not sure if I'll make anymore adds. FB and PYPL were the top two performers during this time up 13% & 11%. I wonder if PYPL could be a takeover target, and FB is richly valued in my opinion so I'm not planning to add unless there is a pullback. HCP is another stock that ended the year strong. It was beaten down to $33 and yielded 6.8%. I thought long and hard about adding, but ultimately decided not to.  In hindsight it appears to be a mistake so I'm interested to see how it performs this year.

2016 will be an exciting year as I'll have one full calendar year to gauge the results. Especially considering I made a couple adds toward the end. Additionally it will give us the time to collect all the dividends which the portfolio missed quite a few of since many of the companies had paid a dividend in late September and early October. That should help boost the results.

Also for the most part I'll continue to buy the stocks of companies that I use their products and services. To me that is a very overlooked part of investing. If I like buying things from the companies then I bet others do to, which should translate into better results.  Plus it makes me feel good buying Silk Almond Milk or a 6 pack of Guinness.

That's all for now. Thanks for reading and good luck to us all in 2016.

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