I’m rereading one of Peter Lynch’s books and forgot that he mentioned one of the strategies I’ve implemented over the last decade in my own investing philosophy.

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He talks about finding the best performing businesses in an underperforming sector or industry. I used this strategy successfully with oil stocks on one occasion, and banks on another occasion. I just look for the worst performing sector of the prior 12 months, and go find the best 4-5 businesses in the space, easy as it gets. It fits right into my value based, out of favor stock selection method and has never let me down. If anything, I sell too early and miss out on half of the gains I could’ve earned.

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Now that I track my data a little better, I can share the results of utilizing this strategy during 2022/2023. I actually did this in 3 separate industries last year.

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When inventories were high and everyone feared recession, I bought some retail businesses I believed were undervalued.

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When the housing market was getting beat down, I bought my favorite housing stocks.

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When the chip shortage was underway and semiconductor stocks were getting beat up, I did the same there; but I basically had my own semiconductor fund in that sector with 12-13 stocks, where I’d usually pick 3-5 of the best businesses in a sector.

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Many of these buys are short-term plays and I sell relatively quickly. As I’m studying my own performance and habits from 2022-2023, I realized I should stop selling so fast and not be so happy with a 30% gain in a short time period. I will sell a “not forever” position at 20-40% usually because I don’t want to be greedy. If I can take a 30% gain in 2-5 months, I’m happy with that. However, these results shocked me today, looking into my purchases and seeing the ratio of winners to losers and the gains I’d be sitting on if I wasn’t so quick to take a profit.

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Initially I looked at all my buy orders, and figured the % gain from the cheapest buy point, if stocks were held through today, August 8, 2023. That article with all my buys will be coming soon.

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Next, I decided to start with the stocks I had recommended on CommonStock in 2022 and see what the returns would be from the day each article was written, if all purchases had been held through August 8, 2023. If we’d bought the stocks I recommended on the day the article was written, how would we be doing today. Am I worth following and are my stock selections criteria sound and profitable?

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I learned a valuable lesson during this exercise, one that I already know, just don’t always apply. Although I know many of these buys are shorter term positions, I need to hold onto them longer than what I am, not to be greedy, but not to be so quick to sell either.

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A couple articles written in 2022 offered up retail & housing stocks I liked. Here are the results:

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We’ll start with retail stocks that I recommended on 8-8-22. Inventories were growing, recession fears were rampant, and retailers were being punished. Gains or losses represent buy and hold from 8-8-22 through 8-8-23.

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$DDS +36%

$WSM -10%

$DKS +43%

$BKE +24%

$BBW +56%

$LULU +20%

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Nothing out of this world, but nice gains in all but one position for 12 months time.

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Next the housing stocks I liked on 4-4-22 and consequently ended up buying all of. If bought on 4-4-22 and held through 8-8-23, these are the gains we’d be sitting on.

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$DHI +66%

$MDC +39%

$PHM +99%

$KBH +71%

$LEN +54%

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Again, no 100-200% gainers, but clearly this little portfolio would’ve beat the market handily.

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Semiconductors I never wrote an article on, not sure why. However, I found all kinds of companies I liked in this sector. These are the returns I’d be sitting on had I not sold anything since my decision to buy. Dates of purchase range from April through September of 2022.

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$TXN -3%

$MU -6%

$LRCX +56%

$AMD +31%

$AVGO +69%

$HIMX -3%

$TSM +5%

$UMC -2%

$ASX +33%

$KLIC +27%

$NVDA +234%

$ASHR +41%

$KLAC +44%

$INTC +33%

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The few losers here were such small losses, they’re relatively insignificant. With 20-70% gains everywhere and a whopping 234% from $NVDA alone, I’d say this group did exceptionally well.

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This was an interesting exercise for me, just to show where I’d be with solely a buy and hold strategy, instead of taking profits so quickly. Many of these stocks could’ve been sold for a higher return if sold closer to their 52 week highs, but I wanted to compare returns if held through the present to keep the parameters identical for the other lists. We know it’s a fairy tale to think we could’ve sold at the top anyway.

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Two other groups of stocks I calculated returns for came from screens I presented in separate articles in 2022 on CommonStock.

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One was a John Neff screen using his 2:1 total return : p/e ratio in which earnings growth + dividends = at least 2x the P/E ratio. If one had bought the resulting stocks the day the article was written, May 14, 2022 and held through August 2023, here’s how their returns would shape up.

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$NUE +42%

$STLD +38%

$HBB +11%

$MATX +9%

$WIRE +35%

$WGO +19%

$BCC +55%

$PATK +26%

$CCS +44%

$HVT +28%

$NAVI +23%

$AIG +5%

$LYB (-4%)

$GS +15%

$LU (-73%)

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Nothing is absolutely mind blowing but I like to see all the 20-50% gains with so little loss. On a side note, I bought $LU and sold within a few weeks for >20% gain. These numbers represent buy and hold, so even the negative returns listed could’ve been profitable had we sold while the stock was up.

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Another is a screen I created using the Value Line top 100 growth stocks of the last 10 years as the starting pool and screening for quality from there. I like screening like this because I start with very high quality companies to begin with, reducing the stocks further ensures I only deal with the cream of the crop. This article was written on May 17, 2022, gains are assuming positions were held through August 8, 2023.

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$GOOGL +15%

$MSFT +25%

$TSM +5%

$LOW +13%

$AMZN +26%

$AVGO +52%

$ADBE +32%

$AAPL +24%

$BKNG +58%

$INTU +35%

$ON +84%

$SBUX +19%

$LAD +1%

$TMO +3%

$NFLX +134%

$MA +19%

$NVDA +152%

$SWKS +7%

$AMAT +34%

$KLAC +48%

$LRCX +47%

These results are a little mind blowing. Not only is there not one single losing position, but of 21 stocks, only 4 had single digit returns, the rest returned 13-84%, while 2 of them, $NFLX & $NVDA are sitting on 134% & 152% gains.

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Besides learning that I need to hold all positions a little longer and not be so quick to take a 30% gain, I also learned that Value Line’s information is of the highest quality and is a great source to use as a starting point for discovering wonderful companies at fair prices.

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These are some of the reasons my investing philosophy is difficult to explain. I use lots of data, study lots of guru’s philosophies, and have different strategies I use, gleaned from books I’ve read about the greatest investors. I typically use the strategies and philosophies of Warren Buffet, Peter Lynch, Ben Graham, John Neff, David Dreman, Joel Greenblatt, and Philip Fisher primarily; and I never stop reading, always looking for new tools to add to the tool belt.

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This article demonstrates the success of one of my strategies, touted by Peter Lynch, the power of John Neff’s 2:1 total return standard, and the quality of Value Line as a source of information.

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Next I will show the returns based on a buy and hold strategy, from the actual date when I got my lowest price point on each position. In that article, I will list every position I bought in 2022 and demonstrate the gains if I’d held the stocks through August 2023.

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Another nugget I tend to use of Peter Lynch’s philosophy is that great companies can be found anywhere. I’ve never held 1,400 stocks, obviously, but I buy a wider assortment of stocks than anyone I’ve met. I don’t diversify for the sake of diversity. I just buy wonderful companies at fair prices and don’t give a damn what sector they’re in. I couldn’t care less about sector weighting. If they’re performance and valuation matches what I’m looking for, I’m game.

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You’ll see the crazy amount and variety of positions I actually held throughout 2022 in the next article.

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Glad to be back, missed y’all🤙

Hello everybody, I’ve been distracted by a succubus for a few months but I think I finally got her hooks outta me, I should be around a little more often.

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The reason I joined CommonStock was to start publicly tracking my portfolio, to show others like myself that you don’t need Ivy league education or an economics degree to beat the market.

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I just wanted to share the results of my personal portfolio and my smart portfolio as well as some of the best trades from each account.

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It’s no world beating results, but I’m happy to beat the S & P 500 in 10/12 months. I studied for years and used virtual investing with play money u til I was confident in what I was doing.

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My entire education comes from $0.50 books from Goodwill and I basically keep it as simple as Buffet & Lynch tell me I should. I’ve also got a lot of Ben Graham, John Neff, and David Dreman in me. I am naturally a value focused, intelligently contrarian investor. I don’t go against the crowd for the hell of it, but I understand that historically, industries that have been down the last year have a higher probability of outperforming what’s been hot the last year. I find the best companies in the most unwanted or out of favor sectors so I can get what I like cheap.

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Here’s a few shots of my primary two portfolios I have linked from Stash.

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Any comments or concerns are welcome! I was shocked to see such outperformance while Beta was so low. Seems like that destroys the theory that beta somehow relates to risk. I’m with Buffet on that one, makes no sense.

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Smart Portfolio: Tip Ranks

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Smart Portfolio vs S & P 500

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Personal Portfolio

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Personal Portfolio Bs S & P 500

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Here are a few of my top trades (that everyone clowned on me for buying at the time, mostly Coinbase & Meta)

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Thanks for checkin it out, let me know what you think or if anyone knows of any issue with Tip Ranks’ portfolio tracking service.

This is exactly why Nexo only got the initial $100 every crypto platform started with in my investments. The yields were 16%-36% on random crypto currencies that didn’t offer ANY yield on most platforms; Axie, Fantom, & Polygon for example. Been waiting on this shoe to drop since the crypto lenders with unsustainable yields started failing. I’m comfortable putting more money into the 4%-10% yielding assets, but >30% without risk is just BS for suckers.

I found this article for you: - https://www.investing.com/news/cryptocurrency-news/nexo-risks-50-drop-due-to-regulatory-pressure-and-investor-concerns-2903389

I have a relatively safe/defensive dividend portion of my portfolio; $INTC yielding >5% yield is crazy. It had a position in that wing of my portfolio yielding >3%, this is just silly. They just gave up #1 spot in market share to Samsung recently if I remember right. I’ve added some growth semi companies recently, but this seems obvious as a long term buy for defensive positions with excellent yield. Even with slowing growth.

This won’t be a popular pick, but I don’t beat the market annually doing what’s popular!✌️

This is one of my favorite 4-5 pot socks and one of two I am currently holding. If I had large enough positions elsewhere , there’s at least three more pot stocks I want to add to my little “Big E THC ETF” that are either profitable, or very near profitable with the most impressive growth, sales, efficient cy and ratio

Listening to the Value Investing with Legends again today; loved the guest the interview on this episode. Hog insight to investing opens up new ways to look at investments. Similar to myself, he was blinded by valuation early in his career and has shifted to quality first, then value after. Another great episode from one of my new favorite podcasts.

It always surprises me on days like today where I can see 190/200 stocks I watch be down 3%-9%, but then see my Fidelity 500 fund in my 401-k be positive for the day.

Can anyone make sense of that for me?

Just like I buy into irrational drops, I sell into irrational gains. Data shows investors overreact to both good news & bad. While these clinical trials may show excellent promise, 20% moves in one day are just plain irrational in my book. It was a very small position because it’s not an industry I like to dabble in. Perfectly content taking a ~16% gain on the position and adding to something I have more conviction in.

Great episode of The Canadian Investor. Title mentions Canadian housing and tech (specifically SaaS), the latter is why I’m sharing. Braden talks about the dramatic multiple compression of some of these barely profitable, or not yet profitable, software as a service companies. I’m sure people hit the jackpot occasionally, but there’s a reason I don’t reach for stratospheric valuations. It’s usually indicative of a bubblish environment and with a little patience one can get into these great companies after the correction that inevitably comes.

I’ll let you listen to get the details, but they explain why some of us have never seen 60%-80% losses on a position and it’s not because I use stop loss orders, I’m not a trader. To be fair, I’ve only been in the game ~11 years, so it may happen someday, I’m not arrogant or foolish enough to believe it couldn’t happen. But I was taught that the best way to win in the stock market is to not lose (Buffet’s rule #1 and #2, his only rules). I believe this is some of the most under appreciated advice I see among many newer investors who start during a bull market and are confused when they get a reality check. Not gambling on hopes of future growth & faith in execution protects the investor from getting their head busted.

In the meantime, I’m excited to be able to start legitimately looking into some of the companies now that they’ve fallen back to earth.

Growth should always come at a reasonable price, as long as you’re investing and not speculating, and not lying to yourself about which of the two you’re doing.

Been interesting watching my 70 position portfolio be all red, or all green most days last week. Friday was really insane with so many positions down 4%-8%; entire portfolio combined for a 4.18% loss on on day (Friday). Those are my favorite days because I like to accumulate great companies at attractive prices, as a long term value investor.

The interesting part is that while the entire portfolio is RED, my cannabis stock is up 20% over the prior 5 days. I initially invested in a cannabis fund, then those clowns moved into all tobacco and “cannabis invested” conglomerates like Scott’s Miracle Grow, Constellation Brands, etc. so I narrowed my focus and found the 4-5 cannabis companies who are profitable or closest to profitability and demonstrating best growth/efficiency metrics.

Verano was my first choice. As a medical marijuana customer I have access to and use these products first hand. Verano has superior vapes and I love their execution. But as someone who adds small amounts frequently to my investments, these are over the counter and more expensive for me to accumulate as I do other investments. I will write a post soon about the few and only few companies that I would invest in in the cannabis space. But Verano was my number one choice. Not a bad 5 day run up but this is a longer term play for me.