(Month 2) – Up 21.7% – TAM $45,000 – Deep Value Stock Portfolio

Johnny HopkinsTAM Deep Value Stock Portfolio Comments

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Today is the end of month two of The Acquirer’s Multiple $45,000 – Deep Value Stock Portfolio – Real Money Game, and the portfolio is up 21.7% since inception.

The Deep Value Stock Portfolio – Real Money Game means I’m investing my entire superannuation valued at $45,000 into a real life Acquirer’s Multiple Portfolio and documenting it here.

The plan is to build my portfolio over the next twelve months and ongoing. After twelve months I’ll have thirty stocks equally weighted in the portfolio, then I’ll re-balance each position after one year and one day to minimize tax.

As you can see from the chart below the portfolio has performed well this month. Currently up 21.70% since inception. Boosted mainly by Bridgepoint Education Inc (NYSE:BPI) up 56%. FreightCar America, Inc. (NASDAQ:RAIL) up 31%, and American Public Education, Inc. (NASDAQ:APEI) up 20%.

Company TICKER BUY $ Date Qty SV CP CV % Diff $ Diff
BRIDGEPOINT ED BPI 6.70 9/30/2016 225 1507.50 10.50 2362.5 56.72% 855.00
PENDRELL CORP PCO 6.90 9/30/2016 222 1531.80 6.29 1396.38 -8.84% -135.42
AMERICAN PUB ED APEI 19.50 11/3/2016 78 1521.00 23.55 1836.9 20.77% 315.90
APOLLO ED GROUP APOL 8.75 11/3/2016 173 1513.75 9.50 1643.5 8.57% 129.75
FREIGHTCAR AMER RAIL 11.02 11/3/2016 136 1498.72 14.47 1967.92 31.31% 469.20
NET 1 UEPS TECH UEPS 11.69 11/29/2016 128 1496.32 11.69 1496.32 0.00% 0.00
FIAT CHRYSLER FCAU 7.67 11/29/2016 197 1510.99 7.67 1510.99 0.00% 0.00
Portfolio Performance 21.70% 1634.43

New additions to the portfolio this month are Net 1 UEPS Technologies Inc (NASDAQ:UEPS) and Fiat Chrysler Automobiles NV (NYSE:FCAU).

All stocks are taken from the All Investable Deep Value Stock Screener, here at The Acquirer’s Multiple.

Here’s what the headings mean:

Company: Company name

Ticker: Stock symbol

BUY$: Starting price for each position

Date: Date purchased

Qty: Number of shares purchased

SV: Starting Value. The total amount paid for each position

CP: Current price for each position

CV: Current total value for each position

% Diff: The difference between the starting price and the current price by percentage

$ Diff: The difference between the starting price and the current price in dollars

Investor’s Thoughts

Along the way I’ll be providing you with my personal thoughts as an investor.

It’s months like these you start to think of yourself as the next Warren Buffett. You want to run out and tell all your friends how smart you are as an investor. This of course would be a mistake!

Some investors think this is a great time to take some profits off the table and/or sell your winners. To do this would be to ignore the tax implications that can seriously erode your short-term performance.

As an investor who follows an evidence based strategy you should know that next month your portfolio’s performance could be down by 50%. You will have months of out-performance and months of under-performance. The most important thing here is to stick to your strategy.

While seven stocks still isn’t enough to provide any real diversification it won’t be long. When I think of diversification I think of protection against individual stocks that may lose fifty percent of their value.

Example: Let’s say to have ten stocks all equally weighted in your portfolio and valued at $1000 each. That means the total value of your portfolio is $10,000. Now let’s say one of your picks drops by fifty percent, your portfolio would be down 5% to $9,500.

Using the same example, if you only have seven stocks valued at $7,000 and one of your picks drops by fifty percent, your portfolio would be down 7.14% to $$6,500. So, the addition of more stocks provides protection against the loss of individual picks.

That’s it for now, if you want to have a look at Month 1 results you can find them here. If you have any comments or questions, please leave them in the comments section below this article.

See how the portfolio is performing in future months:

Month 3

Month 4

Check out my Live TAM portfolio here.

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