Value by George Portfolio 2014 Results

Investment results for 2014 were good on an absolute and a relative basis, they are presented below.

VBG 2014 Portfolio Results

The 2014 Portfolio had a total return of 21.4% almost half of last year’s return (41.2%) but I am more than satisfied with these results. Last year was just one of those rare years you can always hope for but never count on, and for that matter we can say the same about this year’s results. We also compared favorably to the S&P 500’s 14.0% total return in 2014 which was less than half of last year’s total return for the index.

On a cumulative basis our portfolio is up 107% for the three year period (2012-2014) for 35.7%/year annualized compounded return. The cumulative results also compare favorably to the S&P500 cumulative total return of 74.3% in total or 24.8%/year annualized. You can see the magic of compounding at work here.

The one sale this year was Genworth Financial Inc. for a little less than a 6% gain in 2014 but a total gain of about 218% over about a 19 month holding period. The timing of the sale was fortunate as Genworth fell almost 50% later on unexpected LTC reserve issues.

The one purchase this year was Kinder Morgan Inc., in October after they announced a merger with the other independently traded segments of the company. We expected good things from KMI and the 29% gain in 2014 was a pleasant surprise for the 2½ months we owned it. We are expecting more over the years but will need to be patient as gains rarely happen that quickly.

Keep in mind the results over the past years have benefited from a good market and a rising tide lifts all boats. When the market declines, as it eventually will, even good investments will decline in price. So, our focus must be on the long term because markets fluctuate and investments often require 3-5 years to come to fruition.

Let’s pause for a moment and enjoy this year’s 21% total return and then get back to looking for opportunities in this brand new year!

Wishing you and yours the best for 2015!

George

 

 

 

 

Speak Your Mind

*