Happy New Year!

Happy new year everyone! 2019 has ended and a new chapter is about to unfold. A new year is always exciting, but a new decade brings on a whole new level of anticipation. A blank slate just waiting to be built upon. Should you not have taken advantage of the last decade of investment gains, fear not. Is the market overpriced now and ready for a downturn? Perhaps, but not necessarily. Time in the market, beats timing the market every time. So let’s all just make a commitment to putting some money aside and investing each and every month. There is no time like the present, so just do it!

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2019 Performance

As of 1/1/2020, my 10K portfolio stood at $11,816.42. When I started on 8/19/18, the SPY had a price of $285.06 and obviously my account started with $10,000. As of 1/1/2020 the SPY had a price of $321.86. In reality, the SPY has done even better due to dividends, so I have accounted for dividend reinvestment in the return calculations.

10K Return(1)     SPY Return(2)    Difference(1-2)    

2018(8/19-12/31)                          13.95                    13.71                       .24   

2019                                                 37.33                    32.6                         4.73

Since Inception(8/19/18)         18.16                     15.09                      3.07

So far, my investment results have been satisfactory. I haven’t crushed the market by any means, but a few points of outperformance are always nice. Compounded over decades, a few points will make you incredibly rich. For now, I am on the right track. Before I get too proud however, I have only been running this portfolio for a year and change. Let’s see if I am still ahead 5, 10 and 20 years from now. Fingers crossed.

Robin Hood

2019 brought along a welcome change to investing to the investing world. The major brokerage houses all lowered their trading commissions down to 0. This is a real boon, no longer do we have to worry about transactions eating into our returns. This was actually just a continuation of the multi decade brokerage race to zero fees. My dad reminds me of the days when a broker would charge a percentage of the total purchase. Imagine having a million dollar transaction(must be nice) and having to pay 20 or 30 grand just to buy or sell.

Given that I have no allegiance to Robin Hood, I am going to move my account over to TD Ameritrade. I don’t particularly like how Robin Hood displays account information, it isn’t easy to determine how individual stocks have performed using their interface. Robin Hood charges a $75 fee to move an account, so I gave TD a call and they are willing to cover the fee for me. The lesson here is that these brokerage firms are eager for your assets, use your leverage to negotiate.

Current Portfolio

Here is an updated look at my portfolio as of 12/31/19

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As you can see, my portfolio weightings have started to take shape. Some positions have become quite large, while others now take up a smaller portion. For the most part, this wasn’t due to putting much more money into one vs another. I invested a similar amount into most of my companies, within a couple hundred dollars. The difference has rather come from those investments performing well. It is no coincidence that Floor & Decor is now my largest holding at 15.05%. I originally put $1,137.10 into FND, it is now worth $1,778.35, up 56.4%. If only all my investments could perform that well, alas I am not that lucky.

I also still hold a little over a 5% cash balance. I always like to keep at least a little ammo in my pocket should I see a good opportunity. That being said, I like to be almost entirely invested. You can’t compound with money sitting on the sidelines. I trust that the companies I have chosen will make good decisions. Should the market take a fall, they all generate lots of cash to use opportunistically. Whether that is buying back stock when the market price is lower than the intrinsic value of the company, or making an acquisition at a bargain price, I feel confident. I am far more interested in finding the right company than finding the right price.

As always thanks for reading, I appreciate it! I hope you all had a happy new year and let us all make 2020 a good one. Please subscribe and don’t forget to keep on compounding.