frommi

Maybe "people" like Hussman did, but in 2011 the market valuation was not that extreme. Now it is, look for yourself: https://www.gurufocus.com/shiller-PE.php.

As a general saving tool over a very long period of time i think that index investing is great, because you will buy more if the index is cheap and less if it is expensive. But when you want to invest a lump sum you should think about the "index" as an investment and have realistic expectations of its return. Right now based on CAPE, market cap/GDP or https://fred.stlouisfed.org/graph/?g=qis there were only 3 times the market was in a similar position to now. 1929, 1968 and 1999/2000. On all three occasions the market return over the next 10 years was awful. Is this time different? Maybe, but i doubt it. In 2011 the market was in line with historical averages.

Looks like you are falling prey to confirmation bias here. Why do index investing if forward returns for the S&P500 (i assume you mean that one) are very likely to be lower than cash yields?

I would recommend to create an investment process (when to buy, when to sell, how many positions, where new money goes, how to value a business if you want to value-invest, which broker is the cheapest for your style etc.) and start immediately. And then improve this process over and over again (based on hard facts and your experience) until it fits your personality and your emotional temperament. It is not a single investment or stock that will make you rich over time, but this process of continuous improvement. Of the 350 businesses i have on my watchlists i would argue that at least 15-20 are buyable right now, so its not a question of markets being expensive, but by your watchlist not being large enough. Especially at the start it is a lot of hard work to fill these lists, but by keeping track of what you have looked at you keep compounding knowledge that helps you later. Since you already have some money to invest i would try to buy the 30-40 stocks with the highest expected return because that way your mistakes will be tolerable and you will probably make plenty of mistakes. ( Even if your expected return is just 10%, thats probably still better than the <2% return you can expect from a 5-8 year investment into index funds at this point in time ) I started my journey with dividend growth and netnet stocks because they are relatively easy to value (Gordon growth model or NCAV). I then learned about how to value financials by using avg RoE and book value. After 5 years of doing this for 2-3 hours a day i finally feel like what i do is working, but i still reject nearly all ideas that are outside these valuation frameworks. When i do i typically get my head handed to me. (like in BIIB this month)

Even if you take out all cash and slash R&D to 0$ you just get a yield of 7-8% for a no growth company. Doesn`t look very compelling right now to me and i doubt that it is a good aquisition target at an EV/EBITDA of 16. I mean FB or GOOGL grow at >15% per year and trade at similar multiples and are probably less risky. But thanks for posting the idea, it might be interesting below 4$. What are their competitors?

But that's in theory. In practice, I've experienced countless times when I bought a low P/E stock, and stock kept declining, and a few months later the company reports shit earning and suddenly, my P/E is much higher. Company blames it for some one timer events, so I held on, and then another quarter later, the earning is even worse--- It was negative now! So there isn't event a P/E that I could value on, and now management continues to blame some one timer events. Now I am down 50%, with no margin of safety with me. ::) Maybe you fished in the wrong pond of companies? For me to be an investment the value of the business has to be stable. I wouldn`t buy a NCAV stock were the NCAV is shrinking fast (i can live with 10% deterioration), or a dividend growth stock were earnings are not stable (or were not stable through the last recessions). That leaves me with maybe 300 possible investments out of 100.000 stocks, but thats the pond where i know that value investing works really well. With cyclical businesses i`ve also come to realize that technical analysis is often better, because you can never be sure if the current earnings are not the peak earnings for the next decade. What i found interesting was that analysts often are not that bad at figuring out next years earnings (at least if the sentiment on a stock is not totally rotten) so its worth looking at. The market is sometimes even ignoring consensus earnings and just runs on emotions.

SRC has reported rent increases in the latest earnings call. It was 1.7% which is in line with STOR. (Earnings call slide page 17). The investment grade percentage you reference for STOR is from their own credit rating, i don`t think that is comparable. (Look at the footnotes in their presentation, the "real" investment grade tenants just make up 25%). Realty income has ~50% from "real" investment grade tenants, i don`t think there is a material disconnect between all of them because all 3 have a pretty wide diversification now. The current management of SRC is fresh and spun off the Shopko assets right before bankruptcy with lots of debt and bought back stock at very cheap prices. (10%, which i have never seen on a REIT before). STOR can currently grow faster because its stock price is higher and therefore its cost of capital is lower. But i think that is a bad argument to argue that SRC`s value should be lower.

Yes, i think he probably meant 12% levered returns. While i still hold a small position in STOR, i think it is currently fair valued and forward returns are probably around 10-12%. SRC is a much better buy at current prices in the NNN space. The asset base was set up by the management team of STOR and i expect that O or STOR will buy them sooner or later. SRC`s asset base and leverage is similar to O but is 40% cheaper post spinoff that happened in the summer of 2018. Thanks for posting the presentation.

And sold a call spread again, this time i shorted the AUG2019 305$ call and long 400$ call.

Bought back the TSLA call spread, i am out of the TSLA short for now because i think that Elon will once again pump up the stock price at the next earnings call.

I own them all (MO,PM,BTI,IMBBY) and MO was the smallest position, now they are all equal weighted. Can`t really decide which one is better, they are all cheap and have different problems and opportunities.

Did the same today and also sold some puts on MO.

Thats great! I`ve built a lot of models on portfolio123, too. But i haven`t found one that beat my NCAV model consistently. I tried to incorporate some of Olikea`s ranking/models with >30% annual returns, but i was not able to trade it profitably, because as soon as the model has a drawdown i questioned the whole model`s approach. That`s probably my own handycap. Do you trade the model directly with the trade interface or do you manually enter trades?

I am always curious to learn something new, can you point to resources that prove the validity of your approach? (luck vs. skill??) Or is it "just" a momentum approach? How do you find your stocks, how do you determine when to enter/exit? Since value investing is such a broad concept ("pay less than something is worth") i can hardly see how that is not working for anyone. The hard part is figuring out what something is worth, and maybe you were just not that good at it because you probably looked in the wrong places and tried the hard stuff first. If you ever give value investing another try I would focus on NCAV and dividend growth stocks because they are the easiest to value. Regardless, i am bored right now, so please give me something to read regarding your new approach. :)

Bought them back for 0.18$ to reduce risk. (because of leverage, but i keep a portion of the stock that i bought with cash.)

Thanks, but that was just luck. Thanks for your comment, that was the reason to think harder and look again at the numbers and buy some more stock. Critical comments are underrated!

How do you know that if you haven`t been there in years? :) The financials tell a different story with stable/slighlty growing sales the past 4 years. I wouldn`t shop there either, but my wife wants to go to a similar shop every 3-4 weeks especially in the weeks before christmas. Maybe i am wrong, but i think i have the odds on my side.

Wrote BBBY FEB2019 12$ puts for 1.29$. Stock is reasonable cheap if margins stabilize on typical retailer levels (which they did the last two quarters) and these option premiums are so fat its unbelievable. This name is also very hated right now, can`t remember that last time i read so many negative comments and articles on SA.

In the bloomberg article is a list. Looks like a Graham-Type investor that mainly buys stocks below or at NCAV and that are still profitable. 3-7% weight per position. And i think all of them pay dividends. Very interesting that this is still possible with 170 million $ in capital.

+22% after fees/costs, before taxes, in €. Was up by 30% at the end of November but fucked up my trading in the last two weeks, while i must admit that the volatility really helped my future trading. But I still have a lot to learn und stay more disciplined. Over the past 5 years my portfolio outperformed the MSCI World by 5% per year with only half the drawdowns (-10%) and no loss years, while still testing a lot of stuff and wasting a lot of money on unnecessary speculations. Dividends now cover all my basic living expenses, so i am inclined to think that i am financially free now. --------------------- Longs: (-4.6%) -2.5% NCAV (sold nearly all ncav stocks in H1, -16% if i didn`t make the switch) -5.3% Dividend stocks (increased the size from 20% to 97% of networth at the end of Q2, market performance -8.8% in that timeframe) +3.2% Options (Bullish) (selling put options on single stocks, on margin, never more than +15% leverage) Shorts: (+17.7%) -3.0% Options (Bearish) (Short Stocks Experiment, 15 stocks from a portfolio123-system, bear call spread+put options) -> too expensive! +3.7% Options (Bearish) (DAX Puts+TSLA bear call spreads) +17% Trading futures (short only, trend following approach using Dow Theory and Elliott wave analysis, max. 50%-100% short exposure, NQ+RTY, ~320 Trades, 60% win rate (excl. break-even trades), profit factor 2.5, 50% of trades stopped out @ break-even) +8.8% Currencies (EUR/USD, MXN futures in H1) -------------------- Numbers included in performance above: Commissions, fees, interest: 2.7% (1% expensive trading accounts,1.2% Options,0.5% futures). OTC and british stocks most expensive. This was mainly because i liquidated the NCAV portfolio and tested shorting stocks with options, should be way lower next year. -------------------- Achievements: DAX forecaster of the year: https://www.informunity.de/dax_ranking.p?ST=Y Best DAX forecaster over 5 years: https://www.informunity.de/dax_ranking.p?PO=0&ST=T -------------------- Learnings: NCAV: - Don`t buy low quality NCAV stocks anymore. Check past earnings record. Only buy when price/(past earnings)<10 or ideally when current p/e<10. Maybe returns are lower, but the win rate is higher. - Don`t sell quality netnets below NCAV, have more patience! (Sold PBSV @ ~0.65, it ran up to 1.2$.) - Focus on developed markets like USA, Japan, Singapur and avoid debt. (EV<Mktcap) Dividends: - Reduce holdings to 15-20. (done already) - Future growth rate is the most important input into valuation, so use all sources to get a good estimate. (analyst projections, guidance, own estimates) Future trading: - NEVER RISK MORE THAN 0.5% per trade! Had to encapsulate this, because my fuckups usually are a violation of this rule. One can always increase the number of contracts when the stop on the trade is on break-even. Options: - 30-40 days out, buy back at 50%. Don`t buy back because of gut feeling. - Only buy options with >1 year to expiration. One exception: DAX put options in summer So it looks like market timing is my niche, but i am still trying to get better at the other stuff. No experiments planned for 2019, so my R&D expenses should go down. Only speculation in 2019 will be the short on Tesla, because i think that the constant flow of information via Twitter gives me an edge here and i already made money on it in 2018 with good timing.

Merry Christmas, thanks for all contributions and this great place!

Sold DIS,MPW,AMNF and a part of SKT and HSY to buy AVGO,LON:IMB and BEN. Also bought a LEAP call on KMI.

Sold BRX, XOM and bought more MSM,ENB,IRM. Bought back SYF puts. I am slowly reducing my diversification and try to be a little more concentrated ( but within my limits and always with the goal to increase my income and the safety/quality/growth of that income ). My EUR/USD hedge was stopped out at breakeven.

Sold WHG (didn`t meet my "buy more" test on a second inspection, they will have lots of redemptions next quarter) and PEP (reached fair value). Bought more ENB (got a lot more comfortable after the latest earnings) and TAP. Bought back the FB put with a small gain and sold some puts on SYF.

1.) These are 100% of my life savings, its an irreplaceable asset base. 2.) I make mistakes, a lot of mistakes. 3.) With 10% annual returns, i can live a comfortable life. Why risk what i have for something i don`t need? 4.) For 99% of people in the world my portfolio is already very concentrated. 5.) I did a lot of tests with different ranking criteria on my watchlist and the Top15 portfolios always came out as having the best returns. I don`t know why that is, but that is the reason my maximum position size is 6.6% (1/15). There was only one ranking that was better and that was past 4 week return, Top5 was best there, but Top3 was a lot worse, so i don`t trust it. And now the most important aspect: Handpicking stocks out of my ranking ALWAYS performed worse. My conclusion: I am a bad stockpicker, but i know how to create portfolios that outperform.