Overall update – Story of the year

I have done ok again this year. Not as good as previous, but still good, and still beating the market.

FY24 Goals and Positioning Recap

This was a year to try and continue the trends from last year. Maintain disciplined behaviour, do more research and process more companies.

• Be more disciplined. I set targets and thresholds last year, and I didn’t listen to them.
  • Hmm, I did ok this year. I cleared out a bunch of losers even when I didn’t want to. But then in some ways I didn’t do as well as I wanted to. Held some longer than I should have, and still have others I should probably have released.
• More stock research. Process more companies.
  • I improved my circle of competence somewhat. One of my favourite books this year was Superforecasters – Phil Tetlock. He really highlighted a method of good decision making that I think will influence me going forward.

Portfolio Performance

I beat the market again, but not the US Market, which had a gangbuster year. Performance wasn’t as good as last year, and I still feel like I have too much cash. Something to work on this year.  

Portfolio/Index	Capital Gain	Dividends	Currency Gain	Total Return
LIT ALL	15.72%	2.60%	0.02%	18.34%
*AU	15.57%	2.59%	0%	18.16%
*US	5.68%	0.21%	0.96%	6.85%
VDHG.ASX	11.44%	5.55%	0%	16.99%
VAS.ASX	7.44%	6.36%	0%	13.80%
VOO.ASX	22.61%	1.63%	-0.84%	23.41%

Best and Worst Performers

• The top 3 profitable holdings for the year were: Genusplus Group, Jupiter Mines, and Fiducian Group
• The best performers in % terms were: Genusplus Group, Neuren Pharmaceuticals, and Nick Scali
• The worst 3 loss making holdings have been: Neometals, IDP Education, and Reckon
• The worst performers in % terms were: Neometals, IDP Education, and Pilbara Minerals

This year was a year of confused markets with global unrest building, commodity prices flying all over the place, and strange black swan upheaveal events that shifted the needle in ways no one could predict. Genusplus Group has benefitted from the continued roll out of contract work to update our electrical infrastructure. Jupiter Mines benefitted from the accident at South 32’s Manganese mine on Groote Eyelandt, Both Fiducian Group and Nick Scali are high quality companies and beat market expectations as both were expected to underperform (I though they would too) into this FY, and managed to do better than expected. Neuren pharmaceuticals had an outstanding initial run as the orphan drug company came to market and saw an unreal uptake trajectory.

The losers were similarly buffetted by quite diverse events. Both Neometals and Pilbara Minerals were punished as the high lithium prices collapsed under reduced demand for EVs. IDP education’s exorbitant PE ratio collapsed as the reopening exuberance wained, and governments started to put out more conservative policies for future visas. Reckon software continued to remain unloved in the accounting software, though they are a well run company and I still believe in them. But my losers (NMT aside) had much smaller loss amounts than my winners had gains. This is because I took profits in two of them (IDP education and Pilbara Minerals) which contained some of the problems.

The result this year reinforces that I should take profits when multiples are high. There are not many companies on the ASX that have truly global outreach and can grow indefinitely. I feel this means that the companies are much more susceptible to local cycles, and timing becomes a more important effect.

Investment behaviour

Good choices

• Better decision making by documenting stories and collating a wide variety of information.
• Cleared my losers out instead of holding for years.
• Setup buy strategies that considered both valuation and portfolio weighting. Also refined my systems a bit better for information tracking.

Bad choices

• Losses not contained in a disciplined form. Still holding onto some a bit longer than I should.
• Sold a number of companies earlier than I should. Be more aware of the thematic you’re playing into and why you are buying and selling.
• I think I still have too much cash. Need to be better at positioning myself relative to the TMC/GDP.

FY23 Goals

• Continue to relate your investments to the themes/stories and valuations. Know why you’re investing in what you’re investing in, and what the entry and exit stories are.
• Continue to build discipline in buying, holding and selling your companies.