Lessons From A 37% Return In 2017

0
Lessons From A 37% Return In 2017

By DeepValueInvestments

Just done my final performance numbers for 2017 – I recon the figure will come out at +c37%.

This isnt bad compared to FTSE AS Total return in GBP of 12%.  Volatility has been minimal – maximum monthly drawdown was 3.8%.

Warren Buffett’s Annual Letter: Mistakes, Buybacks and Apple

Berkshire Hathaway Warren BuffettWarren Buffett published his annual letter to shareholders over the weekend. The annual update, which has become one of the largest events in the calendar for value investors, provided Buffett's views on one of the most turbulent and extraordinary years for the financial markets in recent memory. Q4 2020 hedge fund letters, conferences and more Read More


Good ideas

ALF (alternative liquidity fund)- started year at 17c, ended at 25.25c – also paid out 2.5c – so an 80% return.

Symphony International Holdings – now exited, nice easy profit.

Tribal – which I somewhat regret selling….

Rasmala – which I hold some but tendered loads for another cheeky profit.

Made a ctouch on DUPD.

Punts on Fox minerals and DDDD pharma havent really come through yet – but both are up slightly…

On Tejoori I am including this at a value of 48.5c.  If I assume I get 60c a share performance is 44% for the year.  If they run off with my money giving me nothing I am up 9% in the year.  I believe I have gone overboard here and am a bit overweight, in my defence I sold a few things to buy a house (only a cheap one) without scaling down TJI – this may turn out to be an expensive mistake.  I have been reading about Kelly criterion betting – and the implications of that – using it to size some of my more ‘sure thing’ positions.  Actually I went a fraction of Kelly.  Still I think this was a mistake and I am going to be more diversified in future – regardless of outcome.  If the money does / does not come through the result will be reflected in the 2018 performance figures.

I still hold Fondul Proprietea which is still quite attractive and continuing to do tender offers.

KMG, I think the offer is a bit low and might be raised but the FT disagrees.  Of all my trades this is something of a perfect position – in September, likely to be out by end Jan, 30-40% profit.  Pity about my sizing – tax tail is wagging the investment dog.  I need to sort out better broking… Any recommendations for a broker that can cope with  GDR’s and the like and does ISAs?

PIL (Produce Investments – potato farmer) hasn’t done anything – I might give this another year.

Mistakes / Bullets dodged

Dodged a bullet on Terra Catalyst fund – I held this prior to starting the blog but never wrote it up….  Wish I had posted as some readers might have avoided a loss….

Quite sizable loss on SGC -c35% and c5-10% loss on PVCS – still running.

Exited my position in Italian property funds / MKS – no real investment rationale – I needed cash to buy a buy to let….  I may re-enter – I never got round to posting about these – there is lots on the net anyway….

This might stike you as illogical as my buy to let yields c10% whereas I return 20-30% most years investing.  Still I want income, I dont want to be living off capital – something of a false distinction.  I still have a (very) part time job and I would like to stop – possibly replaing it with BTL income.  I made 5x what I make working from investing but can’t quite bring myself to finally quit work a couple more of these should do it…

Crypto

I was obviously lucky to get on board with KR1 and Crypto just before a move up.  I have sold out a bit and will continue to do so.  Some people (myself included) wouldnt consider crypto proper investment – there is no fundamental basis.  Ex crypto I am up 25%.  I intend to slowly sell down crypto but also have something of a methodology to switch – and hopefully ride it a bit more.  I need to be so careful on this – there is much crazyness about.  Having said that, all crypto is only worth slightly more than Google or about the GDP of Taiwan – not huge in the overall scheme of things – but much bigger than it was…

Goldmines avoided

Still there have been lots of mistakes – an aborted position on NCC nearly netted me a 100% gain and I nearly 4 bagged on Tech financials, I was very close to buying in….  With increased funds I am finding it difficult to put positions on and hold them through adversity.  Next year I will likely have more smaller positions.  Hopefully I will then have more confidence to add, instead of larger positions where I am overly nervous.  This is the exact opposite of what I said last year – where I wanted more, larger positions….

Current positioning

Holdings 2017

If TJI pays out and KMG is realised I will be over 43% cash – too much, but I would rather sit in cash than compromise quality.  I also use leverage but haven’t this year.

Looking forward to next year I am expecting a very tough time.  I expect to find good opportunities even more difficult to find, mid/ late bull markets are not when I expect to thrive, nor when I want to be taking much risk.  With rising rates we might get a dip to exploit.  I am also a bit concerned about Crypto, 8% is quite a lot for something I have my doubts about, still it has paid off so far and I should run winners.

I dont expect to post as much next year as I did last year – I finally signed up for CFA level 2 – after a 10 year hiatus so this will take quite a bit of time.  Its somewhat frustrating that after years of consistent 20-30%+ performance I only make a good living out of this rather than a fortune.  This is mostly driven by the small level of my initial capital…  A few years of a ‘proper’ job would help.  Still a few more years of 30%+ profits compounding and I will get there.

Next year’s target is to make 30%+ again.  I will also diversify more, whilst maintaining quality.

As ever, comments are appreciated.

No posts to display