Investment summary of 2015

Results

+43%. (For all accounts of the family, including cash). 2014 was +39% and 2013 was + 70%.

Avanza 2015

Obviously a great result. Volatility wasn’t bad either. Another easy year emotionally.

Portfolio

The portfolio was mostly invested in swedish small cap stocks, with two large holdings – Effnetplattformen (30% of portfolio) and Bahnhof (was 24%, now 15%). I owned a sizable position in Effnetplattformen and increased in the offering in February. The Bahnhof position was gradually decreased during the fall as the stock appreciated (and some of the money went into the non-public offering in their subsidiary Elementica).

About 15% of the portfolio was in US Large Caps: Berkshire, Amazon, Apple, Google, Starbucks and IBM. Added a position in canadian insurer Fairfax during the fall.

Successes

The two highest conviction bets. Something to note is that those were found from screening stock lists rather than blogs/writeups.

Selling equities. Eliminating the ~25% margin I started the year with as valuations rose and moving into fixed income.

Selling at the first sign of accounting problems (Vardia).

Short term trading in the main positions to add to returns worked well. Example screenshots:

Failures

Buying minor positions in low conviction bets that weren’t obviously cheap. I partially use this as a screening method, now that trading fees are so low. But I used it a bit too frequently and should focus on doing valuation ranges for more stocks and screening a bit less.

Buying two companies found via the blogosphere (Vardia Insurance, Bonheur) where I had little feel for mgmts abilities or the proper valuation of that type of company. Theres an action craving voice in me sometimes that needs to be ignored.

Merger arbitrage on a danish stock – all profit and some more went to taxes.

Process

Happy that I continued to educate myself, reading books and studying for Swedsec. It felt fun an easy.

I wrote my first two write-ups of companies. Want to do more of them this year.  I’m happy owning meaningful positions in only 6-7 stocks. But want to have my own analysed price ranges for all of them.

When it comes to analysis I also want a more structured picture of macro sensitivity of my holdings. So far I’ve mostly had some kind of mental map of this, which is fine, but has it’s limits and I fear I might loose sight of the goal if prices fluctuate enough.

Too much time was spent watching short-term price action. I’m happy to earn a little money trading around positions or acting on events that I happen to spot when researching, but I’ve no desire to become a full time trader. I’d much rather move into actually being involved in managing small companies as the longest term plan.

Process improvements 

Posting analysis online to get feedback and create a record.

Notes from the books I read as I read them rather than short summaries after the fact.

Studying Damodarans Investment Valuation to improve my simplistic models and better understand some types of companies I currently don’t (financial institutions, option type stocks).