(Month 1) TAM $45,000 – Deep Value Stock Portfolio – Real Money Game

Johnny HopkinsTAM Deep Value Stock Portfolio7 Comments

Today is the end of month one of The Acquirer’s Multiple $45,000 – Deep Value Stock Portfolio – Real Money Game.

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, I bought Bridgepoint Education Inc (NYSE:BPI) and Pendrell Corp (NASDAQ:PCO) back on September 30 of this year, and overnight I added American Public Education, Inc  (NASDAQ:APEI), Apollo Education Group Inc (NASDAQ:APOL) and FreightCar America, Inc. (NASDAQ:RAIL).

Not much has happened in the first month with Bridgepoint down (-3.73%) and Pendrell down (-2.61%), for a total portfolio performance of (-3.17%). Both of these stocks remain in the screen and I’ll update you next month on the performance of American Public Education, Apollo Education and FreightCar America.

Company TICKER BUY $ Date Qty Start Value CP CV % Diff $ Diff
BRIDGEPOINT ED BPI 6.7 9/30/2016 225 1507.50 6.45 1451.25 -3.73% -56.25
PENDRELL CORP PCO 6.9 9/30/2016 222 1531.80 6.72 1491.84 -2.61% -39.96
AMERICAN PUB ED APEI 19.35 11/3/2016 78 1509.30 19.35 1509.3 0.00% 0.00
APOLLO ED GROUP APOL 8.72 11/3/2016 173 1508.56 8.72 1508.56 0.00% 0.00
FREIGHTCAR AMER RAIL 11.06 11/3/2016 136 1504.16 11.06 1504.16 0.00% 0.00
Portfolio Performance -3.17%

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

Start 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.

For a lot of investors, when they see their shares dropping in the first month, like mine have done above, their immediate reaction is to sell their positions, take the small loss and look for other opportunities.

This would be a mistake. I’ve only held two stocks for one month. Therefore, I don’t have any diversification just yet. E.g. If one of my positions were to drop by 50% and the other remained flat at 0%, this would result in a 25% drop in the overall performance of the portfolio.

While that might seem like a lot, it’s not until you have enough stocks in your portfolio that you have the necessary diversification to spread the underperformance of one or two individual positions across your entire portfolio.

Value investing requires patience and the right temperament. If you don’t have either you are going to struggle in the world of value investing. You must take a long term view through the building phase of your portfolio and ongoing otherwise you’re in for a life of underperformance.

For me, this is an uncomplicated and unemotional ‘process’. The process is what removes the emotion. My process simply requires me to buy the cheapest stocks as they appear in the All Investable Deep Value Stock Screener month by month, hold them for twelve months and one day, then re-balance.

I’ll see you next month for an update on my progress. If you have any questions, please let me know by adding a comment below. Good luck with your investing.

See how the portfolio is performing in future months:

Month 2

Month 3

Month 4

Check out my Live TAM portfolio here.

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Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple:


7 Comments on “(Month 1) TAM $45,000 – Deep Value Stock Portfolio – Real Money Game”

  1. Thanks a lot Jhonny I can see you have 3 stocks from the same sectir of education. Apei… Apol… Bpi.
    1) you can check also bned in the same sector, looks very cheep and qulity.
    2) you buy just the “numbers” ? I ask because that sector took and now taking a “bump”cause they are suspected of some kind of a scam…
    Thanks a lot for sharing !!!

  2. Hey Gidi.

    1) Haven’t come across BNED. A quick look at their latest financials shows sales are falling, negative operating losses for the last three quarters, including a loss last quarter of $52 million. Negative operating cash flows for the last three quarters. Balance sheet shows $8 million in cash and $25 million in LT debt. APEI, APOL and BPI all have positive net debt positions (cash minus debt) and positive operating earnings TTM.

    2) Just going by the numbers as they appear in the screen. Looking for low operating earnings compared to EV. Even the 30th ranked stock in the screen is less than 6x operating earnings on an Acquirer’s Multiple basis.

    Thanks for you comment.

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