Quiet Contrarian. Ep 2: How have I done? Part 1: The ASX.

One of the reasons I started this blog was to drive me to get better at tracking my stock picks. Over the years, I’d kind of tracked them with various software, or Commsec, or self made spreadsheets. They always seemed to have some sort of issue (e.g. only gave total return, not annualised, only tracked open positions, didn’t allow comparison to a benchmark, etc), so this blog was meant to spur me to find something that showed some truly meaningful data about my investments. After a bit of research, and some false starts, I found Sharesight, which gets great reviews online, and decided to take the plunge. I have only been using it for a month, but it has already provided me with some really nice views of my investments and a much deeper understanding of them. 

In summary, I am very happy, and maybe a little bit proud of how I’ve done with my stock picks thus far. Since beginning this in 2014 I’ve beaten the Australian market (ASX) by about 10% p.a. This is much better than I expected to have done, but I need to remember to not be complacent. Relatively speaking, I’m still a beginner, and maybe I just got lucky. Past performance doesn’t equal future success. 

My portfolio has done well overall, but there are periods where it’s outperformed and those where it’s underperformed. For example it dropped more than the broader market in late 2018, and again in the recent Covid-19 crash.

This is a list of all the stocks I’ve ever held on the ASX and how they’ve contributed to my returns. Overall, most of the stocks just “do ok”, and the market beating returns are driven by a couple of super performers. The top 4 performers (DTL, NCK, WEB, REA) account for over 50% of the returns. The amount they’ve returned is influenced by both the change of value of the stock, and how much money I put into the stock. For example

• Webjet (ASX:WEB) – Had the biggest price gain: From a buy price of $3.55 to a final sale of ~$15. But was only a small holding of 3% (I felt it was a bit overvalued at the time, and was toying with portfolio balancing via valuation) 
  • Despite being the biggest price gain, it doesn’t have the biggest monetary gain.
• Data#3 (ASX:DTL) – DTL was a good combination of a big 10% holding and great price gain: From $1.83 to >$4. 
  • Despite lower price gain than WEB, it made me much more profit because of the higher holding.

Normally, I try to hold about 10-15 companies. At the moment my portfolio has swollen significantly; I had been managing my FOMO during the rally at the end of 2019, and when the Coronavirus drop started I jumped in to all the stocks that suddenly seemed cheap! In hindsight, this was undisciplined, and way too early, they continued to drop for another week, and the market has been all over the place ever since. The saving grace was that I didn’t go in too heavy, but I bought too many small positions. As a result, rather than 10-15 holdings at between 5-10% each, I have 20 holdings, with a large number of them being sub 5%. 

In summary, there’s more to portfolio performance than which stocks you pick. I’m still improving mine, and trying to remain disciplined about it. I’m hoping this is just the beginning of my journey, and it continues to bigger and better things.

Next time on the QC: How have I done? Part 2: The USA.