(Month 6) – Up 4.2% – TAM Deep Value Stock Portfolio

Today is the end of month six of The Acquirer’s Multiple $45,000 – Deep Value Stock Portfolio – Real Money Game, and the portfolio is up 4.2% since inception, compared to 8.85% for the comparative Russell 3000 (INDEXRUSSELL:RUA).

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.

Month Six

Stocks include:

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

After six months the portfolio is in a draw-down this month. The Russell 3000 (INDEXRUSSELL:RUA) also underperformed in the last month, down 1%. While no investor likes to live through a draw-down, that’s life! Most investors want 15%-20% returns every month but it’s important to remember that no strategy outperforms every month.

As Warren Buffett says, “Temperament (in investing) is more important than IQ. You need reasonable intelligence, but you absolutely have to have the right temperament”. And, as difficult as it is this is not the time to abandon your strategy and/or sell your under-performing stocks. Simply ignore the crowd and their short-term vision and stick with your evidence based investment strategy.

I’m starting to see some real diversification now with fourteen stocks in the portfolio. In terms of picking stocks from the Stock Screener here at The Acquirer’s Multiple, one mistake that investors often make is trying to pick the best (in their opinion) stocks out of the screener instead of simply picking the cheapest on an Acquirer’s Multiple basis. Remember, the cheapest stocks provide the greatest margin of safety for an investor.

Latest Picks

Latest picks include the next two cheapest stocks in the All Investable – Stock Screener here at The Acquirer’s Multiple. They are R1 RCM Inc (NASDAQ:RCM) and Global Sources Ltd. (Bermuda) (NASDAQ:GSOL).

While we rely solely on fundamentals when picking stocks from our stock screeners, I do take an interest in the current trend of the stocks I’m picking on an Acquirer’s Multiple basis. With regards the two new picks and their current trends. Both picks are showing that their 50 Day Simple Moving Average (SMA) is above their 200 Day SMA. While R1 RCM Inc appears to be moving up, Global Sources Ltd. appears to be heading down.

R1 RCM Inc (NASDAQ:RCM)