Wexboy Portfolio Performance – Total Gain & CAGR (since Blog Inception)

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benchmarking, Bloomberg Euro 500, FTSE 100, hedge funds, investment blogs, ISEQ, portfolio allocation, portfolio performance, S&P 500, track record, value investing

Crikey, the blog’s 4 years old soon! So this post’s been on my to-do list for quite some time now…as they say in the hedge fund world, you’re nothing ’til you’ve racked up a 3 year track record! And maybe it’s the perfect time for it, anyway – with an hysterical media insisting the market (& the global economy) are on the verge of collapse again, a reminder of the opportunity & rewards of medium/long term equity investment may offer some welcome relief.

First, I should remind readers of my approach since day one. When I started out here, there were some great investment blogs (some which I read to this day) that served as inspiration. Except many didn’t have any kind of portfolio tracking, or performance, which frustrated me… Now, don’t get me wrong, performance certainly isn’t the be-all & end-all of any blog. Quite obviously, the quality of the investment ideas & analysis is far more important.

Or is it..?

I mean, how on earth do you evaluate an investor’s conviction regarding a specific stock…when you don’t know whether he’s really putting his money where his mouth is (or even if he owns the stock at all)?! I’m not talking dollar/euros & cents here, disclosing the relative size of a position is more than enough. Call me crass & materialistic, but I tend to pay a hell of a lot more attention to someone telling me about their new 10% portfolio holding, rather than some 2% place-holder – how about you?! And then there’s the sad fact that investing isn’t just about investment ideas. As any hedge fund honcho will tell you, a great analyst doesn’t necessarily make a great fund manager…

‘Cos play money ain’t the same thing as real money!

[NB: And nope, I’m not (& have never been) a frustrated hedge fund analyst!]

So, when it comes to investment blogs, it’s natural to want a more holistic view of what an investor really brings to the table. Are they prepared to expose their portfolio to real-time public scrutiny? And if they are, can they actually live with that decision? For example: How do they perform under pressure, and how do they deal with the pernicious impact(s) of fear & greed? Do they insist on defending a failed investment thesis & going down with the ship, or can they bring themselves to admit they’re wrong…even when they secretly believe they’re still right? Or as any good trader might ask:

Do you wanna be right, or do you wanna make money..?!

Smokin’ the S&P…H1-2015 Wexboy Portfolio Performance!

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Alternative Asset Opportunities, Argo Group, Bloomberg Euro 500, Donegal Investment Group, EIIB, FTSE 100, ISEQ, KWG Kommunale Wohnen, Newmark Security, NTR plc, One51, portfolio performance, S&P 500, takeover offers, Universe Group, value investing, Zamano

Oh Lord, where did July go..?! I’d hoped to publish my H1-2015 portfolio performance report a week/ten days ago, but I guess the days kinda slipped away – who can fault a bit of fun in the sun, esp. when my portfolio holdings are slowly but surely marching higher (despite all the China volatility & the fact the US market’s totally sucking wind this year).

Now, if you’re a regular reader, I recently detailed my (still) developing bubble thesis (Parts I to IV), suggesting an increased focus on large cap stocks (a new global Nifty Fifty) might be more profitable. [Though I’m also v conscious of certain small/micro cap successes in the past 12-18 months – a bar-bell strategy, in terms of market cap, may ultimately prove more compelling]. But in terms of immediate portfolio changes, I hastened to add: ‘I don’t believe there’s any great rush here, necessarily’. Well, that being said…let’s first kick off with some (end-June) portfolio changes!

Portfolio Sales:

Alternative Asset Opportunities (TLI:LN):  TLI had a great H2-2014 run – gaining over 22% (inc. a 2p return of capital), making it my top holding at year-end (at 11.1%). Since then, the insured have enjoyed a real stroke of luck, with just one maturity announced. Not surprisingly, the shares are off YTD in sympathy (reducing my holding, in % terms). But I’d focus on TLI’s portfolio instead – adjusting for minor FX unfavourability, and an additional 2p ret. of capital, TLI’s underlying NAV decline was limited to just 3%.

And I see no change in prospects: We’re at the end of a long & painful life expectancy adjustment process (in fact, June NAV inc. a meaningful positive LE impact), and the insured are now 91.5 yrs old on average – maturities will inevitably accelerate (peaking in 2019-20). There’s little financial risk (with an available credit facility, zero debt & cash on hand), and TLI’s focused on regular returns of capital. Sure, we can debate valuations, but shouldn’t lose sight of the big picture – as per the latest results, the portfolio now consists of $132 million in death benefits vs. a current carrying value of $45 million.

But owning such a defensive & uncorrelated investment isn’t as compelling a requirement for me today, and I see equally attractive (albeit, more correlated) opportunities elsewhere. I’ve reduced my shareholding accordingly, from 9.1% to 7.0%. [NB: I normally don’t add to individual holdings beyond a 7.5% limit – TLI remains a substantial position for me].