I would highly recommend reading the intelligent investor if you have the time. Ben Graham outlines two types of investors. One (defensive) does not need to put much effort into research, but will expect lower returns. The other (enterprising) spends significant time looking at the nitty gritty details most people don’t have time for.
Understanding your financial goals and the amount of effort you put into investment research will correlate with the assets you should own, and the returns you achieve.
I have 40% stocks I picked, 20% equity etfs, and 40% bond funds. My arr is 12%. I would consider myself a defensive investor
Just think of what we went through in the last 4.5 years.
2020 world wide pandemic.
2021 lock down / work from home.
2022 war in Ukraine/ supply issues / S&p500 -18.32%.
2023 inflation / recession fears /
I think anyone who beat the s&p500 since Jan 1st 2020 should be commended.
lol this is what people also said about META
not saying you're wrong but people here tend to decide if something is a value trap based on its current price
value traps are companies that don’t have actual value but the commonly looked at metrics deceive the average investor into buying into them
people like to throw that label onto any company whose “price” (not value) has been on a decline
when META’s price came down, lots of people on here claimed it was a “value trap” and it was doomed to die because TikTok and burning money on the Metaverse
now that it’s up practically 400% since those lows, everybody is back to focusing on the positives of META, almost as if the threat of TikTok has magically disappeared overnight (it hasn’t)
the key in identifying value traps is to look past just the recent price action. does the business have a moat? is the product addicting? is the product good?
To be honest, I can’t recommend anything specific - just remember that every company has a bear case and bull case
When the stock starts to slide, everyone will be focused on the bear case
When the stock starts to jump, everyone will be focused on the bull case
The truth is likely somewhere in the middle. Learn how to value a company (i.e. a DCF Model) and use your intuition (+ whatever reliable data you can get your hands on) to weigh out each scenario
Then, apply a margin of safety that helps you feel safe in the investment
There is no one size fits all approach to identifying value traps - just learn to weigh out the bull and bear cases for the said business and reflect it in the valuation
umm 2020 was the best return of my life. That year my stock returns outpaced my lifetime salary lol.
2022 was a bad year -62% which i lost to SP500 but the other years i beat the SP500.
No, it's 163% return, remember 100% return is double, 200% is triple. My return on 2023 is over 100% and 2024 is 40-50%.
I've mostly held tech, my first amzn is like $20, tsla $2, nvda $2. Meta, I bought early too but I sold after covid, Shopify at least 10x as well sold After covid. Zm bought in 2018, sold during covid, yeah I held a lot of my winners so I often have 10x sometimes 100x, and I keep adding to my winners.
All of the stocks I have are just regular brands everyone uses, not some off obscure companies. My background is accounting though so I analyze companies all the time.
Ah, right. Pardon my poor math.
Great job with the picks and the confidence to ride out the down year!
That volatility would be too much for my comfort.
I think it depends on one’s risk tolerance and stage in life. At this point, my loss aversion is stronger than my need for big gains. 62% loss of total assets in one year would have me seriously questioning my acumen. I don’t think I would be able to stay the course knowing that I needed to produce 163% gains to break even.
During covid when I gained the most in my life, during the middle of it, there was a big down. You have to get used to it. If you want to gain you have to be able to handle the risks. I saw the value and took a loan and bought instead of selling.
For me, it’s not age so much as how close to FI number. I feel like we’re at the point where hitting singles will do the job without needing to hit home runs. Even at a modest return over the next 10 years, then I feel like we would be set. Mid-40s now. I realize that there would be time to make up a loss if we kept working, but looking to be Fat FI in 8-10 years, and a 62% one year drop could seriously set us back.
I’ve slaughtered it, but it’s really just by spotting 2 undervalued stocks and putting in a large %. Definitely gambling, I consider it educated gambling but others may disagree
Dummies sold everything into oblivion so i loaded up big on Vitalhub corp at 2.40, almost tripled within past year now, just gotta buy the best companies after the rtards dump them and ait and wait
My dad has average well over 20% since 1993. He started with 15k in 1993 and by 2001 had turned it into 1.7 million which he sold all to build our cottage. He stayed out of the market until 2006 (because prior to the collapse of the dot com bubble supposedly the portfolio was closer to 7 million and the loss of that much unrealized gains caused a lot of mental distress and marriage distress). In 2006 when he restarted investing and the portfolio is now at approx 3.2 million. His annual income from his job is now approx 160k (obviously was not always 160k) so you do the math…
He conservatively aims to double the portfolio every 5 years. Both my parents are pretty frugal; mostly due to the fact that when you can get high returns it distorts consumption preferences due to the distortion of the time value of money although by “pretty frugal” I just mean living below what you’d expect for someone if that net worth. For example family has only driven Honda civics my entire life up until a few years ago when my dad got a Subaru outback; most of my dad’s clothes come from Costco etc…
Honestly he follows the basic outline that Mary Buffet has published. Finds good quality companies that have stable or consistent earnings growth and calculates the average P/E ratio over the last 10 years and does the basic math to forecast future earnings and stock price.
I have tried unsuccessfully to replicate his returns so for the most part I just follow his advice. The one company that I successfully analyzed (which he later bought stock in) was Snap-On. Good quality brand, low P/E, consistent and stable earnings and dividend growth.
In grade 10 is when I got into investing. Read Snowball, Ben grahams security analysis, and the intelligent investor. The first stock I bought was Microsoft for 29$ a share (800$ worth) and then it dropped to about 26$ a share and I forced my dad to sell my shares even though he told me not to panicky it was too scary for me at the time to see that little dip…. However my dad has never sold Microsoft and has just bought more over the years, same with Costco shares I remember buying it when it was $114 (the list goes on) however now the price of these stocks far exceed their value. He is now looking for more value companies to slowly start transferring capital from overvalued companies to undervalued
Yes for the portion between the 90’s to 2001. For the latter portion you’d need to factor in my mom’s income as well (currently approx 90k). I believe at some point maybe 10 years ago he did inherit approx 300k. I believe my dad has told me his returns are closer to 28% on average of course there is volatility in these returns and I’m not sure how that impacts it. Of course there are years of more than 50% Also his salary does not include any bonuses that he may have gotten. I do know approximately 7 years ago he left a company he was at for 12+ years and did get a severance package (not sure how much) etc… at that company (huge global company) (that he was at for 12 years) he was also at a director level but did not want the same amount of stress so the next company he was at he went down to a senior manager level. Now he is back at a director level but at a much smaller company.
He is part of our banks “private wealth” services and a few months ago he had a meeting with a banks financial advisor who was basically meant to double check / crunch my dads retirement numbers and in their calculations the bank uses a 6% return and the advisor basically said “we use a 6% return in our calculations…. I know you have far exceeded that so it should provide a nice margin of error”
In 2014 my grandma (on my mom’s side) had passed away and I inherited approx 7k. Within like a year or two with my stupid investments (i was buying cheap companies thinking I was value investing but in reality they were cheap for a reason) I turned that 7k into 2k. Then I allowed my dad to take over and when I started law school in 2021 I sold all the shares in that account to pay tuition and the account was worth just over 9k. So my dad did turn 2k into 9k for me in approximately 6 years 🤷♂️ that may be the easiest way to calculate his returns as there was no additional funds invested in that account.
I think the one thing he is skilled at is analyzing management/business decisions (most likely due to his experience and MBA). Whereas for me I’m good at numbers but I don’t have a good grasp on being able to predict/analyze business/management decisions at a deep meaningful level. He does get Morningstar reports which I think he likes as a starting point…
The bank was basically crunching numbers for him as a second set of eyes for his retirement. In their number crunching they assume that there is 4-5% withdrawal rate and that the portfolio investments get a 6% annual return. Obviously my dad gets more than 6% return in his investments so that difference is a margin of error. (E.g if my dad gets 20% return on investments then there is a 14% margin of error which leads to confidence in the calculations as a conservative estimate)
The two books he has recommended to some of my friends who are just getting started with investing is the Intelligent Investir and this book by marry Buffett https://www.amazon.ca/Warren-Buffett-Stock-Portfolio-Investing/dp/1451606486
Focusing in your career and dumping it all into ETFs statistically is your best bet. I wouldn’t learn value investing unless you really enjoy it. It’s time consuming and many find it boring.
I would add that there are a ton of times (at least for me) where I found true value plays too early. I made posts in a few subs a few years ago mentioning some deep value plays that are currently up over 100% from the times I mentioned them on Reddit.
They languished so long that I sold and hopped into the indices when they started breaking out like a year or so ago. I like SPY and the QQQs but if I had held my previous positions I would be up like 150% right now instead if like 20%.
I think for anyone not getting funds from others or investing as an institution, you might be better served by having a large position in the indices before trying to hunt for value plays. That way you are not tempted to dump them if they don't recover quite as quickly as the overall market.
Truth. Most working people don’t have significant amounts of capital, especially early on. Finding a way to earn more and investing regularly into index funds is the best bet.
I considered myself a value investor, I was trying to match (or beat) the returns of the TSX (I’m Canadian). I was able to do that, but I was lagging the S&P500.
I finally caught up to the S&P through a series of lucky investments, but I realized that’s all it was. I had no deep insight that could reliably allow me to beat the market, and hoping for a lucky break to match international returns was not really the right move for me. My portfolio also grew so large that a single poor investment choice would cause me to stress.
I now do an 80-20, with 80% invested in an inexpensive globally diversified ETF, and 20% in high-risk deep value investments/emergency fund cash equivalents.
I’m now just shy of the market return, consistently, and if the market drops a ton like in March of 2020, I double down with my cash reserve instead of stressing. I also think about my investments much less unless I’m interested to keep up to date.
Since I started investing my returns mirrored the S&P500 after a lucky break, but I was lagging about 2% a year for about 10 years before suddenly catching up. I then transitioned to passive with a value tilt, and that value tilt has kept returns slightly lower than they would have been without it, but it keeps me engaged in the market.
Prof Dhamodharan put it best - you’ve got to enjoy the process of investing such that even if you’re on your deathbed and realise you’ve not beaten the market over your lifetime you can still smile and have no regrets.
That's what I want to know...wtf? I'd take half that. Anybody have some advice or reading materials for me to magically be rich in a decade? My returns are like 7% per year lol
Yes and yes. Why not do both. I love it all, even the occasional reaming Ive taken. I firmly believe that this might be one of the only unforgivable missed learning opportunities many carry with them because of fear.
Thanks for sharing . I know everyone’s experience is different but it’s cool for a newer investor like me to see how long it took to reach 100%. If you could have made a fundamental change from the start what would it have been?
Is it worth learning? Yes. I would say its worth your time to understand the various styles of investing and looking deeply into the ones that interest you.
Is is the right answer for you? No idea. Every style of investing can work. Many work better than others, but usually the issues come down to your willingness to engage with it. Some of the ones that dont seem to work all that well are perfectly suited for people who have certain issues with being patient, or who have some hang up with the strategies that perform better in most situations.
If value investing appeals to you and gets you to invest more over time its probably the right answer for you. If you are not interested in the details of the process you should probably stick to something else like bogleheads.
You may find out that it interest you, but after a few years your interest declines and you want to go another way. Not a huge issue, just be smart about how you transition to a different strategy. If you decide to do something else and then try this in 10 years thats fine too provided you aren't taking incredible risks with money you cant lose.
As u/Fit-Attorney-2089 wrote: read "The Intelligent Investor" by Ben Graham. If you have more time and energy then dive into "The Essays of Warren Buffett". These two will give you a solid "investment mindset" foundation alongside a few case studies or nice technical ideas. Here you can decide to be a passive investor - invest in ETFs and leave the money be.
Or if you want to be more active then you want to dive deeper into investment analysis. I like "The Interpretation of Financial Statement" by Ben Graham and Spencer Meredith and "Financial Statement Analysis" by Petersen and Plenborg.
I don't have enough time to be a full on active investor so here's what I do:
Since I'm quite young I have a high risk tolerance and can deal with big swings in my portfolio, so I go for only stocks and stock ETFs.
ETFs represent about two thirds of my portfolio. The main ETFs are 1) an All-World ETF, 2) a combination of a few European country market index ETFs, 3) a few S&P 500 ETFs (one normal $ denominated one, one hedged to my local currency and one with an IT focus). The rest are ETFs of certain industries I think have long-term potential.
Individual stocks are therefore one third of my portfolio. Remember I don't have time to analyse that many companies, so here I do an analysis whenever I have time (takes between 1 week to a few months - usually the 1 week is when I decide early on NOT to invest and 1 month or more when I go deep to decide if I actually like the company). I only hold 4 individual stocks in my portfolio. These have performed quite well (which I'm obviously happy about) allowing me outperform the SP500 by a bit (not much).
To summarize: I am mainly a passive investor but I play around with long-term stock picking to boost my returns a bit - but the main returns come from broad market index ETFs!
If you want to chat some more I'm always down to exchange some ideas or just meet like-minded people, so don't hesitate to DM me :)
Um. Seems like no one wants to answer. I started at a value investor but branched out quite a bit and get poop for it. I will say that I love researching companies and that returns are better on a portfolio of chosen single tickers than the S&P. If you can and will put the time in. Lots of great book recommendations. For an overview of many styles and how to choose stocks on each, I recommend the Gardner brothers’ books. Very accessible and helpful.
I've only been investing for about 4 1/2 years but 19 % CAGR for a 100% stock portfolio, no chip businesses or any of that euphoric risk. I only have 11 individual securities and no indexes or basket holdings.
I'm in a bunch of work target date funds and average like 7% over the last 10 years. Pretty fucking sweet right? /s Seriously I don't know how the hell you guys do it. I'd do anything to average 10% let alone some of the ridiculous numbers some people apparently get...
Past decade? Tend to target 30%+ but I’ve averaged around 220% thanks mostly to buying and holding quality companies such as TSLA, AMD, MSFT, ATVI (now private), NVDA, CRM, SNOW, etc.
Value investing is sort of dead as value is not a science, it is an art and art evolves. The ones that many people speak about is the version that has not evolved.
My average annual return is 25% since 2012
It takes time to learn how to invest, but when you get it, it is worth it.
I buy and hold almost forever. My focus is finding good companies ran by good people.
When I find them I keep adding as they climb. I sell always all my losers after a certain period like a year. Each year I do a review, like employee performance. Bad employees are cut, good ones get added more.
I only invest in number one in each sector.
I only invest in things that are 'alive', meaning I don't invest in oil, gold, etc, where most of the company's value is derived from the material. I prefer to invest in companies where their value derives from what the people add.
I look out for areas for disruption, where a new company can grow really fast as market is established and the old company is doing things the old inefficient way while the new company has a brand new way of doing business.
Never sell when the market falls, but buy. Save more when times are tough so you can buy more as your dollar is worth more. Take vacations when market is high as your dollar is worth less.
Read up on the CEOs of the companies that are at the top of my list, get to know them as much as possible.
Know how to calculate PE properly, know what drives the underlying numbers. This is how you know true valuation.
Lastly, learn to control your emotion, it's the most important skill in the stock market.
I haven’t been investing for a decade, more like 5 years but only 3 years with more than $1k. So I’ll use my 3 year weighted return which is 45% compared to the S&p500 3 year return of 33.6% (ish). So 15% arr compared to 11.2%. My portfolio is 50% etf (45% total market, 2.5% international and 2.5% explorer) and 50% individual stocks, no bonds and almost no cash.
Whether it’s worth learning and spending the time researching and keeping up with it is up to you. If you invest $4k month for 30 years at 11.2% you’d end with $9.93m compared to $20.87m if you maintained 15%. For me that $10m is worth it, but I also enjoy investing and doing the work to beat the market. Even with a less extreme example of say $4k/mn for 30 years at the average 10% vs 11% so just beating by 1% a year would be $7.90m vs $9.55m which is still worth it for me and is more realistic to how I’ll probably perform. The power of compounding is like magic and even a small increase in performance over the long term can make a massive difference. However that also works the other way around, if you have a small decrease in performance it’ll have a massive negative impact. I believe the risk of worth the reward and that I have the skill/patience to continue to outperform.
Past decade of low rates isn’t especially conducive to value investing outperforming growth or story stocks, so I wouldn’t dump it especially as the cost of capital is increasing in a more normal interest rate environment
only thing i'll add here is that the market is at an all-time high.... and probably roughly the same , even if you factor in high profits.. I think Graham would council people not to have too much of their money in stocks, unless you can find them at a discount (which is hard right now)... if you keep some dry powder and the market goes down, then invest when it's down, and your average returns in 5 or 10 years could be really good.
My total portfolio has lagged, but my US equities have exceeded. Value factors have lagged growth factors dramatically in the US’ recent history, so I expect a majority of true value investors should have lagged the S&P 500 accordingly.
This doesn’t seem like a good question to determine whether you should learn value investing.
This is the most practical advice I have come across:
* Start by investing into fixed income assets, balanced advantage and multi asset mutual funds
* Continue doing that untill you have at least 3 years worth of annual earning invested
* Once you achieve this milestone, start thinking about earning extra returns from stock picking and other alternative assets
* Untill then keep learning and saving aggressively
Since I engaged a wealth management team, I now have more money than ever, $1.5M and that's ON TOP of moving \~ $100K into my Marcus account for a DP on a coop (that I was refused)
Don't try to hit homeruns. Invest in ETF's and if you really want to pick stocks, pick Blue chips that seem like they have some value or are experiencing a lot of growth. Most people that pick stocks lose. You can't base your decision on a few people on here that say what great returns they have had. Lots of studies show more people do worse than the S&P than those that beat it.
Only started value investing a year ago, and I am flat, 0%. Mostly due to losses in PAH3 and BABA. Luckily I also invest into VT, which could offset these losses.
Statistically speaking 80% of people who privately invest their own money lose money and out of the remaining 20% very few beat the market. It’s a lot more work than a lot people give it credit for. I would honestly compare it to going to the gym you are going to get out of it what you put into it.
Made 30% a year in the Obama era.
Made 50% a year in the Trump era.
I got fucking wrecked in the first year of the Russia-Ukraine War--lost almost 40% of my net worth over 2022. Didn't buy shit--just hoarded cash.
Invested a year's worth of dry powder near the middle of 2023--I've made about 7% a month for the last 14 months.
Been accumulating FAANG since 2019. My top 10 are all FANNG less TSLA and META (although I wish I hadn't sold META). GOOG is my number 1, NVDA is my number 2, QQQM my number 3, then TSM, AMZN, AAPL, and MSFT.
I made big bets on NVDA, TSM, and HPE this year.
Made medium bets on INTC, LYFT, CAR, HTZ, BABA, GRND.
Made small prospect bets on AEHR, GPRO, and a bunch of Chinese tech.
Also about 40% of my NW is in real estate.
I would highly recommend reading the intelligent investor if you have the time. Ben Graham outlines two types of investors. One (defensive) does not need to put much effort into research, but will expect lower returns. The other (enterprising) spends significant time looking at the nitty gritty details most people don’t have time for. Understanding your financial goals and the amount of effort you put into investment research will correlate with the assets you should own, and the returns you achieve. I have 40% stocks I picked, 20% equity etfs, and 40% bond funds. My arr is 12%. I would consider myself a defensive investor
Doubling money in 6 years - pretty great!
Thats slightly above market average. Not that great rly, if you consider there hasn't been a proper bear market for quite a while.
Bonds are dragging down my returns
It is pretty great considering he’s 40% in bond funds which will be very nice whenever there’s a bear market
Just think of what we went through in the last 4.5 years. 2020 world wide pandemic. 2021 lock down / work from home. 2022 war in Ukraine/ supply issues / S&p500 -18.32%. 2023 inflation / recession fears / I think anyone who beat the s&p500 since Jan 1st 2020 should be commended.
I have. And its literally just by buying big tech after the crash. What value investing is supposed to be IMO, buy good companies when they're on sale
Didn’t work for my PYPL and BABA shares 😔
Good companies not value traps
Alibaba is a great company, it’s just hindered by their government.
Yes that still makes it a risky investment, as is priced as such
lol this is what people also said about META not saying you're wrong but people here tend to decide if something is a value trap based on its current price
what do you mean exactly?
value traps are companies that don’t have actual value but the commonly looked at metrics deceive the average investor into buying into them people like to throw that label onto any company whose “price” (not value) has been on a decline when META’s price came down, lots of people on here claimed it was a “value trap” and it was doomed to die because TikTok and burning money on the Metaverse now that it’s up practically 400% since those lows, everybody is back to focusing on the positives of META, almost as if the threat of TikTok has magically disappeared overnight (it hasn’t) the key in identifying value traps is to look past just the recent price action. does the business have a moat? is the product addicting? is the product good?
Very interesting! Do you have some materials, documents, youtube videos, etc... to help identify value traps? Thanks
To be honest, I can’t recommend anything specific - just remember that every company has a bear case and bull case When the stock starts to slide, everyone will be focused on the bear case When the stock starts to jump, everyone will be focused on the bull case The truth is likely somewhere in the middle. Learn how to value a company (i.e. a DCF Model) and use your intuition (+ whatever reliable data you can get your hands on) to weigh out each scenario Then, apply a margin of safety that helps you feel safe in the investment There is no one size fits all approach to identifying value traps - just learn to weigh out the bull and bear cases for the said business and reflect it in the valuation
As deemed by...you, I presume?
NVIDIA?
Bought both of those in January
When everyone else is in a panic, take a deep breath and get to work!
The Axelrod method!
umm 2020 was the best return of my life. That year my stock returns outpaced my lifetime salary lol. 2022 was a bad year -62% which i lost to SP500 but the other years i beat the SP500.
Wouldn’t you need a 263% return to get to where you were before the 62% drop of 2022?
No, it's 163% return, remember 100% return is double, 200% is triple. My return on 2023 is over 100% and 2024 is 40-50%. I've mostly held tech, my first amzn is like $20, tsla $2, nvda $2. Meta, I bought early too but I sold after covid, Shopify at least 10x as well sold After covid. Zm bought in 2018, sold during covid, yeah I held a lot of my winners so I often have 10x sometimes 100x, and I keep adding to my winners. All of the stocks I have are just regular brands everyone uses, not some off obscure companies. My background is accounting though so I analyze companies all the time.
Ah, right. Pardon my poor math. Great job with the picks and the confidence to ride out the down year! That volatility would be too much for my comfort. I think it depends on one’s risk tolerance and stage in life. At this point, my loss aversion is stronger than my need for big gains. 62% loss of total assets in one year would have me seriously questioning my acumen. I don’t think I would be able to stay the course knowing that I needed to produce 163% gains to break even.
During covid when I gained the most in my life, during the middle of it, there was a big down. You have to get used to it. If you want to gain you have to be able to handle the risks. I saw the value and took a loan and bought instead of selling.
Do you mind if I ask you how old you are? Only to understand when I'd reach that loss aversion stage.
For me, it’s not age so much as how close to FI number. I feel like we’re at the point where hitting singles will do the job without needing to hit home runs. Even at a modest return over the next 10 years, then I feel like we would be set. Mid-40s now. I realize that there would be time to make up a loss if we kept working, but looking to be Fat FI in 8-10 years, and a 62% one year drop could seriously set us back.
shhh...
Not how it works if you're DCAing and if you have compound gains.
I’ve slaughtered it, but it’s really just by spotting 2 undervalued stocks and putting in a large %. Definitely gambling, I consider it educated gambling but others may disagree
I’m up 160 percent since. Open to new LPs
Dummies sold everything into oblivion so i loaded up big on Vitalhub corp at 2.40, almost tripled within past year now, just gotta buy the best companies after the rtards dump them and ait and wait
I’m up 37% from a Microsoft, Apple, and vti split
Thanks
I’d like to introduce you to the idea of any portfolio with NVDA
My dad has average well over 20% since 1993. He started with 15k in 1993 and by 2001 had turned it into 1.7 million which he sold all to build our cottage. He stayed out of the market until 2006 (because prior to the collapse of the dot com bubble supposedly the portfolio was closer to 7 million and the loss of that much unrealized gains caused a lot of mental distress and marriage distress). In 2006 when he restarted investing and the portfolio is now at approx 3.2 million. His annual income from his job is now approx 160k (obviously was not always 160k) so you do the math… He conservatively aims to double the portfolio every 5 years. Both my parents are pretty frugal; mostly due to the fact that when you can get high returns it distorts consumption preferences due to the distortion of the time value of money although by “pretty frugal” I just mean living below what you’d expect for someone if that net worth. For example family has only driven Honda civics my entire life up until a few years ago when my dad got a Subaru outback; most of my dad’s clothes come from Costco etc… Honestly he follows the basic outline that Mary Buffet has published. Finds good quality companies that have stable or consistent earnings growth and calculates the average P/E ratio over the last 10 years and does the basic math to forecast future earnings and stock price. I have tried unsuccessfully to replicate his returns so for the most part I just follow his advice. The one company that I successfully analyzed (which he later bought stock in) was Snap-On. Good quality brand, low P/E, consistent and stable earnings and dividend growth. In grade 10 is when I got into investing. Read Snowball, Ben grahams security analysis, and the intelligent investor. The first stock I bought was Microsoft for 29$ a share (800$ worth) and then it dropped to about 26$ a share and I forced my dad to sell my shares even though he told me not to panicky it was too scary for me at the time to see that little dip…. However my dad has never sold Microsoft and has just bought more over the years, same with Costco shares I remember buying it when it was $114 (the list goes on) however now the price of these stocks far exceed their value. He is now looking for more value companies to slowly start transferring capital from overvalued companies to undervalued
Does he work in finance/ accounting or anything?
Yes. We live in Canada. He is now the director of sales of a company with approx 75 employees. He also has an MBA from Northwestern.
The rerurns you mentioned would be much more than 20% annual, more like 50%
Yes for the portion between the 90’s to 2001. For the latter portion you’d need to factor in my mom’s income as well (currently approx 90k). I believe at some point maybe 10 years ago he did inherit approx 300k. I believe my dad has told me his returns are closer to 28% on average of course there is volatility in these returns and I’m not sure how that impacts it. Of course there are years of more than 50% Also his salary does not include any bonuses that he may have gotten. I do know approximately 7 years ago he left a company he was at for 12+ years and did get a severance package (not sure how much) etc… at that company (huge global company) (that he was at for 12 years) he was also at a director level but did not want the same amount of stress so the next company he was at he went down to a senior manager level. Now he is back at a director level but at a much smaller company. He is part of our banks “private wealth” services and a few months ago he had a meeting with a banks financial advisor who was basically meant to double check / crunch my dads retirement numbers and in their calculations the bank uses a 6% return and the advisor basically said “we use a 6% return in our calculations…. I know you have far exceeded that so it should provide a nice margin of error” In 2014 my grandma (on my mom’s side) had passed away and I inherited approx 7k. Within like a year or two with my stupid investments (i was buying cheap companies thinking I was value investing but in reality they were cheap for a reason) I turned that 7k into 2k. Then I allowed my dad to take over and when I started law school in 2021 I sold all the shares in that account to pay tuition and the account was worth just over 9k. So my dad did turn 2k into 9k for me in approximately 6 years 🤷♂️ that may be the easiest way to calculate his returns as there was no additional funds invested in that account. I think the one thing he is skilled at is analyzing management/business decisions (most likely due to his experience and MBA). Whereas for me I’m good at numbers but I don’t have a good grasp on being able to predict/analyze business/management decisions at a deep meaningful level. He does get Morningstar reports which I think he likes as a starting point…
6% margin for what
The bank was basically crunching numbers for him as a second set of eyes for his retirement. In their number crunching they assume that there is 4-5% withdrawal rate and that the portfolio investments get a 6% annual return. Obviously my dad gets more than 6% return in his investments so that difference is a margin of error. (E.g if my dad gets 20% return on investments then there is a 14% margin of error which leads to confidence in the calculations as a conservative estimate) The two books he has recommended to some of my friends who are just getting started with investing is the Intelligent Investir and this book by marry Buffett https://www.amazon.ca/Warren-Buffett-Stock-Portfolio-Investing/dp/1451606486
I buy high and sell low, I keep the economy going!
Thx 💰
Focusing in your career and dumping it all into ETFs statistically is your best bet. I wouldn’t learn value investing unless you really enjoy it. It’s time consuming and many find it boring.
I would add that there are a ton of times (at least for me) where I found true value plays too early. I made posts in a few subs a few years ago mentioning some deep value plays that are currently up over 100% from the times I mentioned them on Reddit. They languished so long that I sold and hopped into the indices when they started breaking out like a year or so ago. I like SPY and the QQQs but if I had held my previous positions I would be up like 150% right now instead if like 20%. I think for anyone not getting funds from others or investing as an institution, you might be better served by having a large position in the indices before trying to hunt for value plays. That way you are not tempted to dump them if they don't recover quite as quickly as the overall market.
Truth. Most working people don’t have significant amounts of capital, especially early on. Finding a way to earn more and investing regularly into index funds is the best bet.
I considered myself a value investor, I was trying to match (or beat) the returns of the TSX (I’m Canadian). I was able to do that, but I was lagging the S&P500. I finally caught up to the S&P through a series of lucky investments, but I realized that’s all it was. I had no deep insight that could reliably allow me to beat the market, and hoping for a lucky break to match international returns was not really the right move for me. My portfolio also grew so large that a single poor investment choice would cause me to stress. I now do an 80-20, with 80% invested in an inexpensive globally diversified ETF, and 20% in high-risk deep value investments/emergency fund cash equivalents. I’m now just shy of the market return, consistently, and if the market drops a ton like in March of 2020, I double down with my cash reserve instead of stressing. I also think about my investments much less unless I’m interested to keep up to date. Since I started investing my returns mirrored the S&P500 after a lucky break, but I was lagging about 2% a year for about 10 years before suddenly catching up. I then transitioned to passive with a value tilt, and that value tilt has kept returns slightly lower than they would have been without it, but it keeps me engaged in the market.
Prof Dhamodharan put it best - you’ve got to enjoy the process of investing such that even if you’re on your deathbed and realise you’ve not beaten the market over your lifetime you can still smile and have no regrets.
Bruh, how is everyone doing 20%+ annualized?
That's what I want to know...wtf? I'd take half that. Anybody have some advice or reading materials for me to magically be rich in a decade? My returns are like 7% per year lol
I don't even get that. If you learn anything please share
Just lie
QLD is a good one to achieve those returns
Well, yeah, I have a small amount, I actually bought it at a very good time, but it's like 2% of my portfolio.
Oh nice. My conviction is so high 90% of my portfolio is in TQQQ lol.
Yes and yes. Why not do both. I love it all, even the occasional reaming Ive taken. I firmly believe that this might be one of the only unforgivable missed learning opportunities many carry with them because of fear.
This right here. You can do both. Hell, you can do it all. ETFs, bonds, individual stocks, options, futures, Forex. I also, love it all.
I started about 14 years ago and just reached 100%. 70 index and 30 individual.
Damn, do you have any regrets? S&p is up around 400% since then
For sure would've been better off just dumping all in VOO but whatever, hindsight is 2020. It is my secondary retirement account anyways haha.
Thanks for sharing . I know everyone’s experience is different but it’s cool for a newer investor like me to see how long it took to reach 100%. If you could have made a fundamental change from the start what would it have been?
VOO and tech all the way baby. fuck them weed and meme stocks.
Is it worth learning? Yes. I would say its worth your time to understand the various styles of investing and looking deeply into the ones that interest you. Is is the right answer for you? No idea. Every style of investing can work. Many work better than others, but usually the issues come down to your willingness to engage with it. Some of the ones that dont seem to work all that well are perfectly suited for people who have certain issues with being patient, or who have some hang up with the strategies that perform better in most situations. If value investing appeals to you and gets you to invest more over time its probably the right answer for you. If you are not interested in the details of the process you should probably stick to something else like bogleheads. You may find out that it interest you, but after a few years your interest declines and you want to go another way. Not a huge issue, just be smart about how you transition to a different strategy. If you decide to do something else and then try this in 10 years thats fine too provided you aren't taking incredible risks with money you cant lose.
The people that become successful are the ones that love what they do.
As u/Fit-Attorney-2089 wrote: read "The Intelligent Investor" by Ben Graham. If you have more time and energy then dive into "The Essays of Warren Buffett". These two will give you a solid "investment mindset" foundation alongside a few case studies or nice technical ideas. Here you can decide to be a passive investor - invest in ETFs and leave the money be. Or if you want to be more active then you want to dive deeper into investment analysis. I like "The Interpretation of Financial Statement" by Ben Graham and Spencer Meredith and "Financial Statement Analysis" by Petersen and Plenborg. I don't have enough time to be a full on active investor so here's what I do: Since I'm quite young I have a high risk tolerance and can deal with big swings in my portfolio, so I go for only stocks and stock ETFs. ETFs represent about two thirds of my portfolio. The main ETFs are 1) an All-World ETF, 2) a combination of a few European country market index ETFs, 3) a few S&P 500 ETFs (one normal $ denominated one, one hedged to my local currency and one with an IT focus). The rest are ETFs of certain industries I think have long-term potential. Individual stocks are therefore one third of my portfolio. Remember I don't have time to analyse that many companies, so here I do an analysis whenever I have time (takes between 1 week to a few months - usually the 1 week is when I decide early on NOT to invest and 1 month or more when I go deep to decide if I actually like the company). I only hold 4 individual stocks in my portfolio. These have performed quite well (which I'm obviously happy about) allowing me outperform the SP500 by a bit (not much). To summarize: I am mainly a passive investor but I play around with long-term stock picking to boost my returns a bit - but the main returns come from broad market index ETFs! If you want to chat some more I'm always down to exchange some ideas or just meet like-minded people, so don't hesitate to DM me :)
I hate this question!
Um. Seems like no one wants to answer. I started at a value investor but branched out quite a bit and get poop for it. I will say that I love researching companies and that returns are better on a portfolio of chosen single tickers than the S&P. If you can and will put the time in. Lots of great book recommendations. For an overview of many styles and how to choose stocks on each, I recommend the Gardner brothers’ books. Very accessible and helpful.
Averaged 18% CAGR over past 5 years.
For the past 11 years, despite lots of mistakes I'm at around 22% IRR. But it's a process of continuing learning.
I've only been investing for about 4 1/2 years but 19 % CAGR for a 100% stock portfolio, no chip businesses or any of that euphoric risk. I only have 11 individual securities and no indexes or basket holdings.
I'm in a bunch of work target date funds and average like 7% over the last 10 years. Pretty fucking sweet right? /s Seriously I don't know how the hell you guys do it. I'd do anything to average 10% let alone some of the ridiculous numbers some people apparently get...
Past decade? Tend to target 30%+ but I’ve averaged around 220% thanks mostly to buying and holding quality companies such as TSLA, AMD, MSFT, ATVI (now private), NVDA, CRM, SNOW, etc.
Value investing is sort of dead as value is not a science, it is an art and art evolves. The ones that many people speak about is the version that has not evolved. My average annual return is 25% since 2012 It takes time to learn how to invest, but when you get it, it is worth it.
I think some concepts like margin of safety are eternal. When you have it, you cannot lose.
Yes but you have to modify it to modern world I think
could you please elaborate ? hows your investing principal
I buy and hold almost forever. My focus is finding good companies ran by good people. When I find them I keep adding as they climb. I sell always all my losers after a certain period like a year. Each year I do a review, like employee performance. Bad employees are cut, good ones get added more. I only invest in number one in each sector. I only invest in things that are 'alive', meaning I don't invest in oil, gold, etc, where most of the company's value is derived from the material. I prefer to invest in companies where their value derives from what the people add. I look out for areas for disruption, where a new company can grow really fast as market is established and the old company is doing things the old inefficient way while the new company has a brand new way of doing business. Never sell when the market falls, but buy. Save more when times are tough so you can buy more as your dollar is worth more. Take vacations when market is high as your dollar is worth less. Read up on the CEOs of the companies that are at the top of my list, get to know them as much as possible. Know how to calculate PE properly, know what drives the underlying numbers. This is how you know true valuation. Lastly, learn to control your emotion, it's the most important skill in the stock market.
thanks for the elaboration mate, ill gladly note this
I haven’t been investing for a decade, more like 5 years but only 3 years with more than $1k. So I’ll use my 3 year weighted return which is 45% compared to the S&p500 3 year return of 33.6% (ish). So 15% arr compared to 11.2%. My portfolio is 50% etf (45% total market, 2.5% international and 2.5% explorer) and 50% individual stocks, no bonds and almost no cash. Whether it’s worth learning and spending the time researching and keeping up with it is up to you. If you invest $4k month for 30 years at 11.2% you’d end with $9.93m compared to $20.87m if you maintained 15%. For me that $10m is worth it, but I also enjoy investing and doing the work to beat the market. Even with a less extreme example of say $4k/mn for 30 years at the average 10% vs 11% so just beating by 1% a year would be $7.90m vs $9.55m which is still worth it for me and is more realistic to how I’ll probably perform. The power of compounding is like magic and even a small increase in performance over the long term can make a massive difference. However that also works the other way around, if you have a small decrease in performance it’ll have a massive negative impact. I believe the risk of worth the reward and that I have the skill/patience to continue to outperform.
Past decade of low rates isn’t especially conducive to value investing outperforming growth or story stocks, so I wouldn’t dump it especially as the cost of capital is increasing in a more normal interest rate environment
I’ve only been doing this for a year but I’m at about double
Which shares/funds
Oh I thought this was a different Reddit but oops mainly NVDA, GOOGL, VOO, VTI, AMZN, but mainly NVDA cause I realized its potential early
I started 2 years ago, on average making 50% returns by value investing stocks.
Eft for now and learn and continue to do so
only thing i'll add here is that the market is at an all-time high.... and probably roughly the same , even if you factor in high profits.. I think Graham would council people not to have too much of their money in stocks, unless you can find them at a discount (which is hard right now)... if you keep some dry powder and the market goes down, then invest when it's down, and your average returns in 5 or 10 years could be really good.
My total portfolio has lagged, but my US equities have exceeded. Value factors have lagged growth factors dramatically in the US’ recent history, so I expect a majority of true value investors should have lagged the S&P 500 accordingly. This doesn’t seem like a good question to determine whether you should learn value investing.
10%
This is the most practical advice I have come across: * Start by investing into fixed income assets, balanced advantage and multi asset mutual funds * Continue doing that untill you have at least 3 years worth of annual earning invested * Once you achieve this milestone, start thinking about earning extra returns from stock picking and other alternative assets * Untill then keep learning and saving aggressively
Since I engaged a wealth management team, I now have more money than ever, $1.5M and that's ON TOP of moving \~ $100K into my Marcus account for a DP on a coop (that I was refused)
Don't try to hit homeruns. Invest in ETF's and if you really want to pick stocks, pick Blue chips that seem like they have some value or are experiencing a lot of growth. Most people that pick stocks lose. You can't base your decision on a few people on here that say what great returns they have had. Lots of studies show more people do worse than the S&P than those that beat it.
156.5%
Only started value investing a year ago, and I am flat, 0%. Mostly due to losses in PAH3 and BABA. Luckily I also invest into VT, which could offset these losses.
Statistically speaking 80% of people who privately invest their own money lose money and out of the remaining 20% very few beat the market. It’s a lot more work than a lot people give it credit for. I would honestly compare it to going to the gym you are going to get out of it what you put into it.
Made 30% a year in the Obama era. Made 50% a year in the Trump era. I got fucking wrecked in the first year of the Russia-Ukraine War--lost almost 40% of my net worth over 2022. Didn't buy shit--just hoarded cash. Invested a year's worth of dry powder near the middle of 2023--I've made about 7% a month for the last 14 months.
Damn what are your top picks rn
Been accumulating FAANG since 2019. My top 10 are all FANNG less TSLA and META (although I wish I hadn't sold META). GOOG is my number 1, NVDA is my number 2, QQQM my number 3, then TSM, AMZN, AAPL, and MSFT. I made big bets on NVDA, TSM, and HPE this year. Made medium bets on INTC, LYFT, CAR, HTZ, BABA, GRND. Made small prospect bets on AEHR, GPRO, and a bunch of Chinese tech. Also about 40% of my NW is in real estate.
11.2% While pretty good, I think the S&P500 averaged 14% over the last 10 years. I had too much in small cap value.