Re-Update On Portfolio One Performance

It is time to update all of the portfolios on the site. Since I track it manually in excel (in order to check all the fees, etc… on the brokerage account) it takes me a while to do this by hand. I check performance day-to-day (or at least periodically) using the google portfolio tool, which works great. Since I was going to do the other portfolios I figured I’d re-update portfolio one since we had a great month and it is easy to do the update when there are no buys or sells.

Portfolio One is nearing the $20,000 mark, at $19,775.   This file has been seeded with $15,000 of contributions, so it is up about 32% over its life, which is approximately 9 years. The “effective” life is much smaller, since we have been making contributions of $1500 / year for all years except the first one, when it was $500. That is a pretty good rise since the indexes (US) have been worse over that time, although to calculate it effectively I would need to break the $1500 “tranches” into unique components and then determine their annual performance through today… which I will probably break down and automate some time.

This portfolio is nicely balanced with about 15 stocks. At anything more than about 10 stocks or so you get a reasonably diversified portfolio, assuming that they aren’t all the same types of stocks. Also comparing to US benchmarks probably isn’t quite right since I have been advocating about 50% overseas stocks for the last several years since most growth is overseas and this means that I should be tracking against worldwide developed countries, instead.

More importantly than talking about how the portfolio has DONE is talking about STRATEGY. I highlighted individual active stocks and put those with more than $200 “up” as green, and with more than $200 “down” as red. Since we sold Nokia (a disaster) and Microsoft (flat) we have a lot of green and not much red anymore. The point is to have a strategy going forward, not backwards, and the question is whether or not they will go up from here and when to sell, if something has reached a peak. Generally I should try to sell before they hit the $200 mark on the down side; this would have saved some heart-ache with Nokia. On the flip side some have gone pretty far down and come back (mostly), like eBay. But as a strategy point I should try to sell or at least consider it seriously around the $200 mark.

As far as the “up” stocks, it seems that the Chinese oil firms are in a bubble stage. We will watch those, just like we watched China Mobile and BHP. We aren’t with them forever, and their huge market cap means that a big multiple means that there has to be a lot of profits earned in the future. A lot of the gains are a bet on China itself and away from the US dollar, so that has to be figured in, too.

Of the ones we sold before, Netscout (NTCT) gave us a nice gain but we missed the jump from $14 to $24. It came back down to where we bought it so it seemed like a good move at the time but we also need to watch the long term. There likely will be a consolidation in the tech market as the big players seek to utilize a lot of their cash and look for growth so if we make some sells I might be looking for some smaller tech players to jump into.

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