Wednesday, 26 September 2012

Uncle Chua's Buy and Hold Portfolio Performance Update

I have written about Uncle Chua's story and how he accumulated a great deal of wealth through his stock investment in Singapore.  The portfolio of stocks that he left in his will was mentioned in a book.

Here is Uncle Chua's portfolio & dividend income, reproduced here as accurately as was depicted in the book:
Uncle Chua's portfolio 2001

All the shares he dealt in were ALL blue chip stocks.

I thought it would be interesting to see how his portfolio of stocks might have performed up to today, assuming the portfolio was left unmanaged, essentially a buy and hold strategy.

It was difficult to determine the initial prices of some of the stocks in the year 2001 and I have used the earliest available stock prices, from the Yahoo Finance website, to represent these initial prices of the stocks in 2001.  Some initial prices were left blank as I could not get any information on these.

Well, let's have a look at his updated portfolio.

Click here:
Uncle Chua's Updated portfolio 2012

Uncle Chua's portfolio (Update)
Performance (not including dividends)
From 2001 to 2012
Period of 11 years  Thumbs Up Gain %
Thumbs Up CAGR

What conclusions can we derive from Uncle Chua's updated portfolio?

The portfolio has done quite well, returning a CAGR in share appreciation of  11.0%.  With dividends added, its performance has certainly outperformed the general market.  Do you agree?

The buy and hold strategy for this portfolio can be adopted by the defensive investors in their investing.

There are great lessons one can derive from Uncle Chua's legacy even today.

Conclusion:   Buy and hold is a safe and rewarding strategy for highly selected stocks.  


Uncle Chua's Portfolio & Dividend Income

The story of Uncle Chua

Appendix:   Rule Of Five 

The Rule of Five is BetterInvesting's method of letting you know you're not perfect and neither are your stock selections.

It states "For every five stocks you select using BetterInvesting methods, one will do much better than you expected, three will do about as well as you expected, and one will do much worse than you expected." 

The Rule of Five forms the basis for the first step of portfolio management, defense.

Here are the three possible outcomes for a stock's fundamentals on the SSG.

Defensive portfolio management's ONLY concern is finding stocks whose FUNDAMENTALS of SALES, PRE-TAX PROFITS, EPS, & PRE-TAX PROFIT MARGIN are not meeting your projections for future quality.

Click here  for a more indepth discussion of defensive portfolio management or click here   to see how the PERT Report is used to implement defensive portfolio management.

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