Turtleinvestor Portfolio 2014 Strategy

For those of you who are new to my blog, just a background recap for you.

I created a game for myself when I first started this blog in Feb 2008 when KLCI was around 1417. I started with seed money of RM 3,000 and with monthly saving of RM 888. The game will run for 15 years or 180 months. The goal was to generate annual compounding return of 10%.

I have completed about 71 months or 39% of the journey.

Just some key statistics as at 31 December 2013

Cash RM 68,788

Capital RM 64,356

Book value RM 72,616

Profit RM 8,119

CAGR:

Period = 22 months(Dec 2009) 5.22%
Period = 35 months(Dec 2010) 10.28%
Period = 47 months(Dec 2011) 3.67%
Period = 59 months(Dec 2012) 2.51%
Period = 71 months(Dec 2013) 3.00%

You must be thinking why was I not able to generate spectacular returns at the depth of 2009? One of the reasons available cash was too little, starting with RM 3,000 and monthly savings of 888, the cash available for deployment was only about RM 12k. As time went on, the accumulated savings grew but unfortunately Turtleinvestor portfolio stayed out of the market for almost 2 years. The other reason was I overweight China which happened to be one of the worst performers. But this is certainly not game over for me yet.

Based on the goals that I set above, I should have about RM 90,929. Unfortunately, I only managed to achieve RM 72,616 or fall short of RM 18,313. To catch up, based on the cash on hand of RM 68,788 I would need make a return of about 26%(18,313/68,788*100%). In my humble opinion, it is not difficult to catch up provided I don't make any unforced errors now. Cash of RM 68,788 is not that difficult to deploy. Just deploy about RM 17,197 for 4 investment ideas during market corrections or bear market would do the job.

The rule # 1 in investing is "Don't lose money". I have been very cautious, perhaps too cautious especially for public portfolio like Turtleinvestor portfolio, that cost me CAGR of 3% only. I am however quite satisfied because I did not lose money since the beginning.

The other rule is to be patience. Investing is a life long journey. Investing is really about getting a LIFETIME ACHIEVEMENT AWARD. I am sure everyone can agree to this. The moment you start earning says at 24 years old till you go back to haven is a long time. Assuming you go back to see the Lord at 74 years old, that will be 50 years. Any dumb mistake a person make can be devastating. If someone is fully invested at the peak of the market and losses 50%, RM 100,000 will go down to RM 50,000. To just get back to even of RM 100,000, a person will need to make 100% return on RM 50,000. At 10% CAGR, it will take a person 8 years to do that. Can you avoid losing self control not even a moment, over a period of 50 years?

To be honest, my ego was really bruised and tempted many times to make a few quick trades to make up 26% for Turtleinvestor portfolio. So what if I achieve that? I realize if I did that, I would have lost. Why? I would  have lost all the opportunities to let my readers to see my recovery process and how a real life investing is.

Don't get me wrong that I am preaching process is more important that results. It is NOT OK if you get the process right and NOT achieving the results. A successful investor is about getting the right investing process AND achieving results. My ultimate goal is to live the successful investing principles AND achieving the 10% CAGR goal.

So what is the strategy for 2014?

WAIT.

I realize that despite of my extremely low writing activities, many of you still coming back very regularly to check on my blog. I am very grateful for that. I hope to be able to share and write a little bit more in 2014.

Happy New Year!