[quote author=soulsimple link=topic=27804.msg735122#msg735122 date=1328783721]
http://www.investlah.com/forum/index.php/topic,27804.0.html
goals for her portfolio.
after she was borned i started a little portfolio for her. hope that it grows well till she is 20. simple goal of 15% returns yearly. hope to add funds yearly into it(on top of dividends received) n might diversify into diff assets as time n opportunity permits.
how she is faring ok(i guess). pls feel free to share your opinions.
:)
[/quote]
Nora was born on 8.9.2011. Her father, Simple Soul started a portfolio for her. Here is her portfolio.
http://www.investlah.com/forum/index.php/topic,27804.msg735140.html#msg735140
Avg. Price 9.3.2012 % Gain
Dlady............RM 19.8 ......RM.29.9............ 51.01%
GuanChg......... 2.183...........2.61...........19.56%
LPI..................12.29..........13.62..........10.82%
Nestle..............47.46..........56.24..........18.50%
Padini.............. 0.998..........1.52............52.30%
PetDag.............16.02..........18.36.........14.61%
UtdPlt.............. 17.36...........25............. 44.01%
Let's have a good look. It is a portfolio of 7 stocks that are highly selected, that is, a concentrated portfolio. 5 of these stocks are from the consumer sector (Dlady, GuanChg, Nestle, Padini and PetDag), 1 from the insurance sector and 1 from the plantation sector.
All these companies are growing their revenues and earnings year on year. Their businesses also throw up a lot of free cash flows. All give dividends. Another feature common to all these companies is they are growth companies, growing at various rates.
What about their durable competitive advantage and economic moats? Yes, these businesses, except UtdPlt do have these qualities. UtdPlt is a well run plantation company and presently enjoy the good returns due to the high price from the crude palm oil. CPO prices can be cyclical and CPO is traded like a commodity with its price determined by supply and demand.
By buying these companies at a time when the market was down in September 2011 and last quarter of 2011, Simple Soul has managed to buy these wonderful companies at fair or bargain prices. The market is often volatile and in the short run, psychological factors drive stock prices. However, over the long term, the stock prices are driven by fundamental factors. By staying with wonderful companies with durable competitive advantage and economic moat, this portfolio is well constructed to protect against any downside risk and with a promise of a fairly good return.
Let's study the gains of the individual companies in this portfolio over this short period since its inception in September. For the smart and shrewd investor, the like of Simple Soul, it is comforting to know that he can find bargains in September when everyone was leaving the market in disgust. But this isn't surprising for someone who practises value investing. Another point of note is to realise that it is not uncommon to see a stock price going up 50% or down the equivalent 30% within a short period of 1 year. 3 stocks in this portfolio have gone up about 50%. The gains in the other 4 stocks are in the teens. Who said that you have to invest in "lousy" penny stocks to seek such gains?
However, the long term performance of this fairly concentrated portfolio will track the earnings growth of the individual stocks. For this, Simple Soul has certainly selected his stocks well.
This is a story of a caring father who is investing for his daughter Nora. Warren Buffett started his investing at the age of 13 years, and seriously so in his early 20s. As Nora has a good 20 years headstart in her investing career and knowing the power of compounding, I shudder to project her networth when she too reaches her age of 80s. :-)
Well, Nora will realise someday how lucky she is having a caring father who has such a foresight. Happy Investing to Simple Soul,
