What is “The Acquirer’s Multiple $45,000 – Deep Value Stock Portfolio – Real Money Game”?
The Acquirer’s Multiple $45,000 – Deep Value Stock Portfolio – Real Money Game is a Deep Value Stock Portfolio Game using Real Money!
Well, I’ve just discovered someone that’s prepared to put their entire superannuation savings valued at $60,000 Australian Dollars (AUD) (US$45,000) into The Acquirer’s Multiple Portfolio over the next 12 months, and ongoing.
Well me of course! Here I am! The one under Tobias Carlisle.
Cause I eat my own cooking! Why would I ask you to trust me with your hard earned savings using The Deep Value Stock Screener here at The Acquirer’s Multiple, if I wasn’t prepared to invest my own savings into this investing strategy. Not just my savings, but my entire superannuation savings.
That’s right! I’m 53 years old and all I have to show for it is AUD$60,000 (US$45,000).
I really believe in what we’re trying to do here. That is, help investors to maximize their returns following this rules based mechanical investing strategy using the The Deep Value Stock Screener provided on this website.
How will it work?
Simple! Every month I’ll convert AUD$5,000 into US Dollars at whatever the exchange rate is on the day and buy the top two stocks, that I don’t already own, provided by The All Investable Screener.
Why use The All Investable Screener?
In case you didn’t know, we have three screens here at The Acquirer’s Multiple. The Large Cap 1000 Screener, The Small & Micro Cap Screener, and The All Investable Screener.
Backtests show that over the full sixteen-and-a-half year period, the All Investable Screener generated the highest total return of 5,705 percent, or a CAGR of 25.9 percent per year. The Small and Micro Cap Screener generated the second highest total return of 3,283 percent, or a compound growth rate (CAGR) of 22.0 percent per year. The Large Cap 1000 generated the lowest total return of 1,940 percent, or 18.4 percent per year compound.
You can read more about the three screens here.
The screens here have been developed out of the comprehensive research conducted by our Founder, Tobias Carlisle, who wrote about his research in his Amazon best-seller Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations, which describes companies with a low rank based on The Acquirer’s Multiple® that may be undervalued, and good targets for acquisition, i.e. Making them great opportunities as undervalued deep value stock picks.
So what’s the plan?
The first part of the plan is to put together the portfolio which I will scale into as follows:
- Month One I’ll buy 2 stocks
- Month Two I’ll buy 3 stocks
- Month Three I’ll buy 2 stocks
- Month Four I’ll buy 3 stocks
- Month Five I’ll buy 2 stocks
- Month Six I’ll buy 3 stocks
- Month Seven I’ll buy 2 stocks
- Month Eight I’ll buy 3 stocks
- Month Nine I’ll buy 2 stocks
- Month Ten I’ll buy 3 stocks
- Month Eleven I’ll buy 2 stocks
- Month Twelve I’ll buy 3 stocks
That’s 30 stocks in 12 months.
NOTE! Scaling in is where a lot of investors become unstuck!
Investors give up too quickly before their portfolio is full allocated.
Let’s use an example. Let’s say you bought just two individual stocks in month one and you paid $50 each for both. Your ‘portfolio’ is worth $100. If one stock drops by 20% ($10 or 20% of $50), then some investors believe that their entire portfolio has dropped by 10% ($100 minus $10). This is true but watch what happens when you add more stocks.
Now, using the same example, let’s say you now own 30 individual stocks all worth $50 each. Your portfolio is now worth $1500. If one stock drops by 20%, same as above ($10 or 20% of $50) that means your entire portfolio would only have dropped by 0.6% ($1500 minus $10).
It’s important to remember that when you’re scaling into your portfolio, large falls or gains in one stock will have a bigger impact until you have built your entire portfolio. Only then will you fully maximize your portfolio’s performance and achieve optimal diversification.
After I’m fully allocated, I’ll hold all stocks for one year and one day to minimize my tax, then in Month Thirteen I’ll re-balance the two stocks I bought in Month One and so on…
Along the way I’ll provide full analysis on the two stocks I’ve purchased, updates on the portfolio’s performance, and you can ask me any questions you want on scaling in, portfolio weighting, when to sell, rebalancing etc.
Remember there’s just one rule when it comes to using any rules based mechanical investing strategy; Don’t try to change any of the rules or you will underperform!
Performance to Date
Check out my Live TAM portfolio here.
For more articles like this, check out our recent articles here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple: