Full year Model Portfolio evaluation-2024
Being accountable
Note: Since inception, meaning from the day I published the stocks to the year-end, the returns are presented on a cumulative basis.
Nobody could have predicted the market's sustained strength following last year's exceptional performance. The S&P 500 achieved a total return of approximately 26% in 2023 and has risen by about 23% in 2024.
The longer I invest, the more I believe in the adage: "Time in the market beats timing the market," as higher-quality companies consistently outperform the rest over time.
Changes
If you’ve noticed, I have significantly reduced the frequency of stock postings (Only 4 this years). This is because great stocks are supposed to be rare, and I believe in quality over quantity.
I only share ideas when I identify a genuinely compelling opportunity, ensuring that each post adds meaningful value rather than simply contributing to noise.
Underperformance
Sources: Financial Times: Europe is not a business backwater
It’s quite interesting to note, as highlighted in a chart from the Financial Times, that if we exclude Nvidia, the European market would actually outperform. Of course, if we exclude the exception, we will naturally do well—but what’s the point, right?
It reminds me of Terry Smith’s remark that if we exclude all the exception, any companies would outperform. This perspective emphasizes the importance of addressing reality as it is, rather than selectively removing factors to construct a more favorable narrative.
Finding excuses won’t help, but continuous learning and striving to get better will. Even Buffett, renowned for his disciplined approach, had to adapt and evolve—just as he did when he first invested in tech (IBM) but failed miserably. However, he never stop there and continue to learn.
As a result, he invested in Apple when everyone thought that smartphone has saturated the market. It became one of his biggest winner to date. Mistakes are inevitable, but what matters is using them as stepping stones for growth and improvement over time.
Under-followed stocks
For my long-term readers, you would have noticed that I intentionally exclude the "Magnificent 7" from my write-ups, as these companies are already extensively researched and widely covered by analysts. Instead, I focus on highlighting opportunities in less-discussed, high-quality businesses where analysis can add unique value.
Sources: Eugene Ng
This approach allows for a deeper exploration of overlooked investment opportunities, ensuring readers gain insights beyond the mainstream narratives. Additionally, I wanted to see if these underfollowed companies can actually outperform the best of the "Magnificent 7"—a challenging benchmark, given how exceptionally strong these companies are. (look at the diagram above)
However, time is the best friend of any long-term investor. It has only been two years so far and the real test will be in 5 to 10 years. Only then will we truly see how these underfollowed opportunities perform compared to the "Magnificent 7" and whether this approach delivers meaningful outperformance over the long haul.
Personal portfolio
Some of you might ask why I am not sharing my full personal portfolio? My answer is that I prefer not to share the specifics of my personal portfolio at this stage, as I believe I am not ready to do so.
However, I fully "eat my own cooking," investing in alignment with the principles and strategies I advocate. In fact, if you’ve noticed, I do invest in some of the stocks I’ve pitched, reflecting my conviction in the ideas I share and my commitment to practicing what I preach.
Besides, even if I wanted to share, there is no way I can prove this to you unless my account is audited, but my model portfolio is timestamped, providing transparency and accountability for the ideas I present.
I strive to be transparent in sharing both successes and failures, as I believe this is the foundation for earning the trust of my readers. By openly discussing my journey, including the lessons learned from mistakes, I hope to build credibility and provide meaningful insights that resonate with those following my work.
New add
For those curious about what I’ve added this year, it would be LVMH. It’s a high-quality business that, in my view, is currently facing temporary issues. I believe these short-term challenges present an attractive entry point for a company with such strong fundamentals and long-term potential.
I also initiated a small position in MTN as I believe that it has potential to regain it status as the renowned ski resorts in the world. However, their recent actions did shocked me for a while. For those who are curious, I have shared the news here: Park City skiers said their resort vacation became a mess after a ski patrol strike shut down much of the mountain)
Great companies create value for their stakeholders, including employees, by fostering an environment where everyone benefits. I firmly believe that they should continue to focus on creating win-win situations for all parties involved—whether it’s customers, employees, shareholders, or the communities they operate in. This approach not only drives long-term success but also ensures sustainable growth and a positive impact on society.
Special situation
I do have a significant loser this year—Capri. (Luckily, it is a small stake) Unfortunately, we’re not all Buffett, and mistakes are part of the investing journey. Capri stands out as my biggest loss this year, serving as a reminder that even well-considered investments can go wrong. It’s all part of the process, and the key is to learn and improve with each experience.
All of you are welcome to grill me for this!!
Conclusion
I will continue to keep track of these underfollowed opportunities and consistently monitor their performance over time. Additionally, I remain committed to introducing new ideas, ensuring a steady flow of fresh perspectives and potential investment opportunities.
This long-term approach aligns with my dedication to evaluating the effectiveness of this strategy and providing valuable insights for readers as the results unfold over the years.
Disclaimer: I might have positions in the above posts and receive no fees for writing the post. I am not affiliated or have any role with the company. This post is just for educational purpose and it is not an advice to buy or sell the stocks. Invest at your own discretion.