I’m just a guy with a blog and a brokerage account. This is my hobby and this blog shouldn’t be interpreted as investment advice. The blog is a chronicle of my portfolio. More importantly, this blog is a chronicle of my learning process and development as an investor. Hopefully, you can learn with me on my dime.
The purpose of this blog is to track my IRA brokerage account in real time and objectively measure my performance. Every trade in this account is recorded on this blog on the day it happens.
I’ve had an interest in investing since my teens, when I was swept up with a fascination with the internet bubble. At the peak of the internet bubble, at my graduation party, a family friend recommended that I read “The Intelligent Investor” and I found religion. Even though I didn’t have significant capital to invest, Graham’s concept of the margin of safety really spoke to me.
My interests led me to major in Finance in college, where I was bored learning about ideas like CAPM and the efficient market theory. I learned about the efficient market hypothesis, I was able to regurgitate it and graduate, but I never really agreed with it. I felt instinctively that it was wrong and Graham’s ideas were true. I stayed out of the markets for years due to a lack of capital but watched attentively from the sidelines, building small play portfolios and occasionally putting small sums into stocks that I liked.
Around 2015, I decided to start taking my hobby more seriously, hence this IRA that is devoted specifically to deep value investing. A major impetus for me was reading “Deep Value” by Tobias Carlisle and it lit a fire under me to begin taking investing more seriously. I set aside some of my IRA savings to begin aggressively pursuing a value strategy.
Over the years, this account will either prove that I can beat the market without Bloomberg terminals and an army of analysts or it will verify that I should shut up and put my money in index funds because it’s hopeless. I think I can beat the market over time, but it’s going to take time for my strategy to pan out.
My outlook is more Benjamin Graham than Warren Buffett. I buy stocks that are cheap. I am perfectly content buying a bad business at a wonderful price. I don’t look for things that are “growth at a reasonable price,” I don’t rationalize buying “compounders.” I don’t undertake complex DCF analysis to justify a 100 to 1 P/E ratio. I don’t think I’m smart enough to figure out if a business has an enduring economic moat that will last for decades to come (I also think most of the pros who claim they can do this are full of it). I think technical analysis is akin to animal sacrifice at Delphi.
I look for things that are statistically cheap. I look for things that are hated and ignored. Qualitatively, I try to determine if they will get out of whatever trouble they are in. In other words, I try to determine whether or not they are likely to mean revert. The way I see it: if everyone doesn’t hate it, then how are you getting a deal? You can read a more detailed overview of my strategy here.
I have underperformed the market since I launched the blog in December 2016. With that said, I think that a systematic value investing strategy takes time to work out. The way I see it, my chief advantage is that I have the time and patience to wait for the strategy to work. Value investing works is because it is painful in the short run and takes vast reserves of patience to work out in the long term. It’s hard for professionals to implement because they usually face redemptions (or the end of their career) when value isn’t working. It’s like the casino’s edge in blackjack: statistically, the odds are on the casino’s side, but it takes a lot of hands for that edge to pan out. The trouble is: with investing, each hand takes a year.
I also have a taxable account and my 401(k) in which I predominantly buy passive buy-and-hold funds (i.e., eating my vegetables and doing what everyone tells you that you’re supposed to do). I designed my own asset allocation, which you can read about here.
The focus of this blog is my IRA account that I have specifically set aside to apply a deep value strategy. At the end of 2016, I had $51,000 in this IRA and wanted to continuously own approximately 20-30 positions. My goal is to stick with a value strategy through thick and thin over an extended period of time instead of merely indexing. The fact that this is an IRA is helpful as I won’t have to pay taxes on each gain and dividend payment, which can add up over time and hinder compounding.
My performance and live trades will be tracked on this blog. My failures and successes will be on this blog for all to see. The hardest aspect of value investing isn’t understanding the concepts, it is having the discipline to stick with it when it isn’t working. I hope that a site where I track my trades can help me stick with the strategy and avoid the siren song of market folly. I also hope to interact with other value investors and financial bloggers so we can share ideas, minimize our failures and maximize our success.
This blog is for me, but I hope there are people out there who enjoy reading my thoughts, trials, and tribulations in life and investing.
PLEASE NOTE: The information provided on this site is not financial advice and it is for informational and discussion purposes only. Do your own homework. Full disclosure: my current holdings. Read the full disclaimer.