Johnny’s Real-Life Acquirers Multiple Portfolio – Update

Johnny HopkinsStudy8 Comments

OK, a few people have asked me what’s happening with my monthly updates for ‘Johnny’s Real-Life Acquirers Multiple Portfolio’ (AM Portfolio).

For those of you that are unaware, I constructed my own AM Portfolio, using my own savings, here at The Acquirer’s Multiple starting in December of 2015. You can read all about it here:

The reason I haven’t sent an update lately is that I’m currently based in Melbourne, Australia, where I’m in the process of setting up my own Self Managed Super Fund (SMSF). A SMSF is a type of superannuation scheme where I as trustee have full control over the investments within my SMSF, hence the name ‘self managed’.

Those investments are clearly intended to be in US stocks taken right from screens here at The Acquirer’s Multiple.

My intention is the ramp things up a bit in my AM Portfolio. Instead of buying two shares each month for around AUD$300 (USD$224) each, I’m going to be buying two shares each month for around AUD$3,000 ($2,240) each. At the end of 12 months, I should have around US$54,000 (US$2,240 x 24 stocks) invested in my AM Portfolio, and you can watch the results each month right here.

This is no longer an experiment, this is my long term investing strategy for my own retirement savings. BTW, I’m 54 years old this year. You can check me out in The About section here at The Acquirer’s Multiple, where I’m a financial analyst. My photo is right below the one of the very good looking and much younger Tobias Carlisle, founder of this website.

As with all things beuracratic, it takes time to set up my SMSF, organise bank accounts, rollover from the existing funds etc. But, as soon as I have done all that, which I’m told will be in the next month, I’ll be back to my ‘Real-Life AM Portfolio’ with more money to invest this time.

By the way, if you’re considering setting up your own Acquirer’s Multiple portfolio and you have some questions on how to go about it, or any questions in general about the AM investment strategy, then add it in a comment at the bottom of this article, so readers can see your question.

I should remind you that I’m not a financial planning expert, I’m just an individual investor like you, who created his own Acquirer’s Multiple Portfolio using the screens right here.

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8 Comments on “Johnny’s Real-Life Acquirers Multiple Portfolio – Update”

  1. Good job Johnny!

    I was wondering about the status of your AM portfolio. Thus, it was a good post. Value has been having a bad spell for a while (although picked up a little lately). It will be good to see how an AM portfolio performs.

    For the buy side, you stated you will buy 2 stocks a month. What is your plans for the sell? (i.e. sell after holding a year?)

    Thanks and good luck with your AM portfolio.

    — B

  2. Thanks B.

    The rules are quite clear on the sell side:

    Hold winners for one year plus one day to maximize after-tax returns, then sell. If a stock is up, and remains in the screener after one year and one day, hold until it leaves the screener. If a stock is down and remains in the screener, hold. If a stock is down and leaves the screener, sell.

  3. Johnny,

    Is your strategy to sell a loser, instantly after it leaves the screener, or rebalance (selling losers) once a month or maybe quarterly?

  4. Hey Namzlot.

    Thanks for your comment. I let all of my stocks run for 12 months and one day. Give them a chance to revert back to the mean then, if a stock is down and remains in the screener, I hold. If a stock is down and leaves the screener, I sell.

  5. Thanks Johnny.

    Is this the same sell formula (the one you mentioned above) that is used in Quantitative Value and Deep Value? I’ve been trying to re-skim the books and haven’t been able to nail it down for some reason.

    This line “You should check the portfolios to see if a rebalance is necessary no less than quarterly.” from the Four Steps FAQ throws me for a loop, I guess. Makes me think I should drop losing stocks, that have fallen from the screen at least quarterly.

  6. It really comes down to the amount of time you want to spend managing your portfolio.

    I’m time poor, so tend to re-balance annually however, for taxable portfolios, stocks that are up should be held for a year and a day for long-term capital gains. Stocks that are down and out of the screen can be re-balanced out and replaced with the next best position more frequently, like monthly or quarterly.

  7. Do we have any idea on how the different rebalance methods will affect expected returns? I guess this is my biggest question.

  8. An annual re-balance is sufficient, and a quarterly re-balance can slightly improve returns, but more frequent re-balancing requires increased monitoring, increases trading costs, and can increase taxes.

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