33% Off Everything In the Value Investing Journey Shop Until Tuesday

33% Off Everything In the Value Investing Journey Shop

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While I announced the opening of the Value Investing Journey Shop last month, because I’ve been so busy I didn’t announce it to many people.

To make up for that oversight, I’m offering 33% off everything in the Value Investing Journey Shop for the next three days only.

This includes all issues and the All Past Press On Research issues package where you get all past issues for one set price.

This means for the next three days you can pick the individual issues you want most for $65 instead of the regular $97.

And that you can get All the Past Press On Research issues in one package for $628 versus a normal price of $997.

33% off all items in the Value Investing Journey Shop until Tuesday

But only until Tuesday…

I won’t do discounts often – if at all in the future – so if you’ve wanted to see my latest stock recommendation issues at a discount you better buy them now.

As of this writing, each pick is up a combined average of 50.3%.  And these picks are crushing the market.

Below are some of the highlights from all the issues…

  • The average gain for all 12 recommendations is 50.3% as of this writing…  These picks are crushing the stock market since April 2015.
  • As of this writing, the stock market has only produced a 15.8% return.
  • Meaning, my picks since April 2015 have outperformed the stock market by 34.5 percentage points.
  • Two companies I recommended grew from sub $500 million market caps to $1 billion plus market caps as of this writing.
  • One company as of this writing has now surpassed a $2 billion market cap since I recommended them.

So you’re probably wondering what you have to do to get the coupon code.  And the answer to that is nothing…

The coupon code is – 33%OffGrandOpening

The discount won’t show up until you input the code when the item is in your cart as you’re getting ready to check out.  So make sure to put the coupon code in before you hit the payment button or you’ll have to pay full price.

You can go to the Shop here and begin getting your deals now.

And this is the only place to see my most recent stock recommendation issues.

If you have any questions contact me using the Drift App – the blue icon in the bottom right third of the page – to message me through this site and I’ll get back to you right away.

Happy shopping smart value investors.

2016 Performance Review – Five Full Years Beating Buffett and Crushing The Market

2016 Performance Review – Five Full Years Beating Buffett and Crushing The Market

The above quote from Benjamin Graham is one of my favorites.

It means in the short-term emotion and psychology drive the market.  But in the long-term the market – and individual stocks – get judged on how well they’ve operated and grown over time.

This is great news for us as long-term oriented value investors.

If we can find a few great companies at cheap to fair prices and hold them for the long-term, we’ll have great returns over time.  Why?  Because…

“Time is the friend of the wonderful company, the enemy of the mediocre.”  Warren Buffett

With this as a backdrop, below is the 2016 performance review.

For links to 20122013, 2013 updated numbers, and 2014 and 2015 performance reviews go to the previous links…

Also, as noted above I made multiple mistakes in 2013 when calculating my returns.  The numbers below – which show the five full years between 2012 and 2016 – are correct.

2016 Performance Review

The hard work, extreme patience, discipline, and low returns from 2014 and 2015 paid off in 2016.

I only bought and recommended three new companies all year for the portfolios I manage and for Press On Research subscribers.

But the companies I still own from 2014 and 2015, combined with the three new recommendations in 2016, produced a fantastic 32.8% return on average in 2016.

Here are the highlights…

  • One of the companies I recommended while working at the investment newsletter got bought in 2016.
  • Another company I recommended to Press On Research subscribers merged with its parent in 2016.
  • Another two Press On Research picks from 2015 more than doubled in 2016.
  • None of the 12 total picks I’ve made for Press On Research were down in 2016.
  • At the time of their recommendations, all companies were well below $1 billion in market cap.
  • I now own two companies – the two that more than doubled – that are worth more than $1 billion in terms of market cap.
  • The average market cap at the time of my 12 recommendations was $246.4 million.
  • The average market cap of the 11 companies I still own – not including company that got bought – is now $413.3 million.

Below is the full spreadsheet…

2016 VIJ and POR Performance Review

If you’d like to know what the companies are you need to subscribe to Press On Research.  And remember Value Investing Journey free subscribers get a 50% discount on a Press On Research subscription.  If you’re a Press On Research subscriber I’m sending an unedited version of the spreadsheet your way.

What does this mean for cumulative full five-year returns now?

Five Full Years Beating Buffett…

I don’t compare myself to Buffett because I want to be the next Buffett.  But because everyone knows who he is as he’s regarded by most at the best investor ever.

I want to be known as the first Jason Rivera when my career is over.  At the end I want to be known as a better investor and capital allocator than Buffett and to produce better returns over time than he has.

At least for now – five full years into my career – I am achieving this lofty goal by beating Buffett when compared to the first five years of his career.

In the first five years of my career I’ve now produced average – non-compounded – returns of 29.7% each year.  Or a total cumulative return of 148.3% over that period.

In the first five years of his career Buffett produced average – non-compounded – returns of 25.4% each year.  Or a total cumulative return of 126.9% over that period.

This means in the first five years of our careers I’ve produced returns 4.3 percentage points better each year than Buffett did in the first five years of his career.

But what does this 4.3 percentage point excess return per year mean in dollar terms over this period?

Assuming we both started with an asset base of $10 million at the beginning of the five-year period I would have grown that $10 million into $36.7 million after five years.  Buffett would have turned his investors $10 million into $31 million in that time.

This is why every point of excess returns is so important.  And why you need to be aware of any fees charged to your account by your money managers.

Over a long period – or in this case five years – “only” an excess 4.3 percentage points each year would have made investors $5.7 million extra.

Not only am I achieving my lofty goal of beating Buffett through this time, but I’m also crushing the market as well.

And Crushing The Market

From 2012 through 2016 the Dow Jones Index produced a total cumulative return of 37.4% for the five years or 7.5% per year on average.

The S&P 500 produced a 43.2% total return for the five years or 8.6% per year on average.

And the Russell 3000 index – closest thing to a small cap index – produced a 43.5% total return or 8.7% per year on average.

I’ve produced returns in excess of these indexes by 21%, 21.1%, and 22.2% points each year over these five years.

Assuming a $10 million asset base I would have produced $21.5 million more for investors over this five-year period than the Russell 3000 index would have.

  • $36.7 million minus $15.2 million the Russell 3000 would have produced.

I started posting my results publicly in 2012 because this is when I began doing “real”, in-depth, investment research and analysis instead of speculating.

Results have been great thus far…  Better than I expected… But there’s still a lot of work and improvement necessary to continue this.

Other Highlights From 2016

Thanks to sales of How To Value Invest and Press On Research subscribers we continued helping Mhicaella and her family in the Philippines.

The last letter we received from her mother told us that Mhicaella is now in kindergarten.  She loves P.E., singing, and drawing, and is learning to read and write so she can begin writing letters to us soon.

Here is a recent picture of Mhicaella…

Mhicaella Picture

With your help, some of the things we’ve been able to help provide for her and her family over the last year are school supplies, medical and dental care, and Christmas gifts for her entire family.

A percentage of all sales of my books, services, and products sold will continue going towards charities like these well into the future.  And I plan to expand and sponsor more kids and families in 2017 now that Rivera Holdings is up and running.

Thank you so much for helping with this.

***

Other highlights from 2016 are:

  • Started Rivera Holdings LLC.
  • Began raising capital.
  • Grew personal connections by an exponential amount due to capital raising efforts.
  • Grew from 320 subscribers between Value Investing Journey and Press On Research to now 455 total subscribers between those two services and now also the Rivera Holdings Mailing List.
  • Read between 50 and 75 books this year.
  • Grew from 720 followers on Twitter as of the beginning of 2016 to 1,008 now.
  • Grew from 790 connections on LinkedIn as of the beginning of 2016 to 896 now.
  • As mentioned above we continued helping Mhicaella and her family in the Philippines survive and thrive.
  • For the first time in three years expanded my circle of competence in terms of industries.  I now understand and feel comfortable evaluating three new industries – marinas, hotels, and multifamily real estate.
  • Also expanded knowledge and experience into the private equity/investment arena as well.

Conclusion Thoughts

As mentioned above the patience of the last two years paid off this year in a big way.  Going forward I wouldn’t expect results to continue this trend.

Due to the still ever rising market and valuations it’s become harder to find great cheap companies to buy.  I only recommended three companies in 2016 and all those were in the beginning of the year before the market took off again.

Barring a major sell off I expect to add few to no companies again in 2017.

As I’ve mentioned already mentioned to Press On Research subscribers I will only buy something that meets my ultra-strict criteria.  Under no circumstances will I buy something because I haven’t bought in a while.

This helps keep us only in great companies and should help us continue producing exceptional returns over time.

No matter what the market continues to do though over time I’m confident we’ll continue to beat the market by a wide margin.  And continue to compound our wealth over time.

I’m still raising capital for my new investment holding company so if you’d like more information about how you can invest with me and the market-crushing returns I’ve produced thus far email me at JasonRivera@valueinvestingjourney.com, call me at 605-390-3157, or sign up for the Rivera Holdings mailing list.

As always 2016 wasn’t all great news…

Up next will be a post detailing my major failures in 2016.

***

Here’s looking forward to an even bigger and better 2017.

Thanks so much for everyone who’s been a part of this journey so far.  And please let me know how I can continue to improve things going forward in the comments below.

Jason Rivera

Chairman, CEO, and Founder of Rivera Holdings LLC

April 2016 Press On Research Issue

April 2016 Press On Research Issue

Below is an excerpt from the unfinished 40 page April 2016 Press On Research issue to release exclusive to subscribers tomorrow April 19th.  If you’d like to subscribe to Press On Research go to the links above or below.

Press On Research High Def

Investing In The Greatest Investment Secret In The World Again

To Earn Up To 71%

April 2016 Press On Research Issue

By Jason Rivera

Press On Research Volume 2 Issue 1

If you ever think of insurance companies like I do – yes I know this is odd 🙂 – one of the first things that may come to mind is catastrophes.

Everything I’ve ever read about the business of insurance has talked about catastrophes both natural and manmade.  And how insurance companies lessen the risks of these disasters.

Disaster is the business of insurance.  But insurance companies insure against risk to protect clients.  And reinsures against them to protect themselves from financial disaster.

Until humans can control hurricanes, tornadoes, fires, death, theft, floods, health issues, and other disasters the business of insurance will be a great one to invest in.

And I love investing in businesses that should remain great for generations.

This is one of the many reasons I love insurance companies.  And today this is the industry we’re heading back to again.

As an investor I try to stay away from risk as much as possible but the entire insurance industry is based on the probabilities of risk.  When something bad will happen not if it will happen.

There’s no way to avoid risk in insurance.  This is because the business of insurance is all about shifting risk to other parties so you’re not crushed when disaster strikes.

When investing in insurance companies you have to make sure the company reserves its premiums well and conservatively.  That you can trust management to keep doing this.  And that management is more focused on underwriting profits than growing revenue.

These are the most important things when evaluating insurance companies.  Because if a company doesn’t do these things well it will go out of business at some point.

Today’s pick does all these well.

It’s a (MARKET CAP REMOVED) million life and property and casualty insurer that pays a 1% dividend.  Is undervalued by 28.8% to 71%. Has produced an underwriting profit in six of the last nine years.  And has produced cumulative redundancies every year of the last nine.

I’ll explain all this below but it’s all great.  And this isn’t all that’s great about the company.

Its float supports 3.49 times its operating assets or 349% of its operating assets.  And its float is also better than cost-free because of the company’s ability to consistently produce underwriting profits.

This acts as a better than cost-free loan the company can use to invest and grow the business.

Another advantage we have over other investors is that we’re willing and love to invest in insurance companies.  Most others hate this business.

Investing In Insurance Part 2

Most people won’t research insurance companies.  I wouldn’t early in my investing journey.  And many professional analysts stay away too.

This is because insurance companies are hard to understand at first.  Have new and confusing terminology to learn.  And normal profit metrics don’t matter for them.

But if you learn how to evaluate them not only will you learn they’re easy to evaluate once you know what you’re doing.  But you can use the same repeatable process on every insurance company.

And Buffett has continued to buy into insurance – his favorite industry – constantly over the decades.  This is one reason he’s so successful.

In reality insurance companies are easy to understand.

Insurance companies take premiums as payment for insuring things like businesses, equipment, health, life, etc.  Premiums are the insurance version of revenue.

The insurance company doesn’t have to pay you a dime of the money it earns over the years until there’s some kind of damage or theft of whatever’s insured.

When this happens they pay the agreed upon insurance rate out to the policyholder minus a deductible from you when you make a claim.

While the company continues to earn money – premiums again – it invests some of it so it can pay back your policy in the future.  And also make a profit in excess of the amount earned, invested, and paid out.

If the company writes its policies and invests well over time it will earn underwriting profits.  This is the main profitability metric to care about when evaluating insurance companies.  And grow the assets it can use to write policies and invest more money.

When done well this can turn into a virtuous circle for insurance companies and shareholders producing great profits and returns for both.

When done poorly this can also turn into a negative cycle for those involved.

If it doesn’t do things well the company will go out of business when a major disaster strikes.

Think of insurance companies like investment management companies.  But instead of only earning management fees insurance companies earn underwriting profits on top of investment earnings.

These effects can double profits over time…  If management is great at what they do.

The insurance business while easy to understand is one of the hardest businesses to be great at.

Other than being a low-cost operator like GEICO owned by Berkshire Hathaway.  There are no competitive advantages in this industry.  And it also experiences wild swings of huge profitability than massive losses on a regular basis.

But if the company writes policies and invests money well over a long period they can grow to great sizes at almost no extra costs.  The only new costs may be to hire more staff.

Insurance companies also hold the greatest secret in the investment world…  Float.  This is how Buffett built his fortune.  And how we’ll start to build ours.

But before we get to this we need to know why float is so important.

Brief Berkshire Hathaway History

Buffett began buying Berkshire Hathaway stock in 1962 when it was still a textile manufacturer.  And when he still ran his investment partnership.

He bought Berkshire stock because it was cheap compared to the assets it had.  Even though the company was losing money.

He continued to pour millions of dollars into Berkshire to keep up with foreign and non-union competition.  But none of this worked.

In time Buffett realized he was never going to make a profit again in the textile industry.  So whatever excess funds Berkshire produced he started buying other companies.

The first insurance company Berkshire Hathaway bought was National Indemnity Company in 1967.

Since then Berkshire’s float grew from $39 million in 1970 to $84 billion in 2014.

Float compounds like interest does if you use and invest it well.  But not only does float compound, if you use it well it also compounds the value of the company that owns the float.

Since buying National Indemnity in 1967 Berkshire’s stock price has risen from $20.50 a share to today’s price of $210,130.  Or a total gain of 10,250%.

This is the power of insurance companies when operated well.  And today’s recommendation is an insurance company that operates the right way too.

But before we get to that I need to explain how float makes this possible.

The Biggest Investment Secret Revealed Part 2

‘Float is money that doesn’t belong to us, but that we temporarily hold.”  Warren Buffett

Float is things like prepaid expenses.  Billings in excess of expected earnings.  Deferred taxes.  Accounts payable.  Unearned premiums.   And other liabilities that don’t require interest payments.

But they are the farthest thing from “normal” liabilities.

With normal liabilities you have to pay an agreed upon amount within a certain period or your customers and suppliers will stop paying you.

Float are things you won’t have to pay back for a while the company uses in the mean time to grow the business.

Instead of paying this money out now like normal liabilities.  Companies can use these “liabilities” to fund current operations.

Float is positive leverage instead of negative leverage like debt and interest payments.

Think of float as the opposite of paying interest on a loan.  Instead of paying the bank for the cash you’ve borrowed.  The bank pays you interest to use the money you loaned.  And you can use this money to invest.

A nice example is long-term debt versus unpaid premiums.  Both liabilities listed on the balance sheet.  But each is far different from a real world perspective.

With long-term debt you get money in exchange for agreeing to pay back to loan at an agreed upon rate for an agreed upon period.  If you don’t you can go into bankruptcy and/or go out of business.

With unpaid premiums you get paid a monthly amount from a customer – say for house insurance – and only have to pay back any amount when a disaster occurs.

If your clients don’t make big claims for a long time – or ever over the life of an individual policy – the company keeps using this “liability” to continue investing and growing the business.

Now let’s keep going with this example…

If you own a home with a mortgage you have home insurance in the United States.  The ranges of this vary but let’s say you own a home and pay $300 a month towards home insurance costs.

This $300 a month – $3,600 a year or $36,000 after 10 years – goes to the insurance company every month.  Year after year even if you never claim any insurance.

The insurance company holds this money on the balance sheet as a liability because the assumption – probability – is you’ll make an insurance claim at some point.

In the mean time the insurance company invests this money to grow assets.  This way it makes sure it has enough money to pay claims when it has to.

Now imagine this multiplied by thousands, tens of thousands, hundreds of thousands, or even millions of customers.

If the insurance company produces underwriting profits on top of the float it gets and invests this money well over a long period this money compounds exponentially.

This is how Buffett and Munger grew Berkshire to the giant it is today.

Using better than cost-free float to fund operations can improve margins by up to a few percentage points each.  And this happens when a company produces consistent underwriting profits.

The best way to explain why float is so important is with the following quote:

“Leaving the question of price aside, the best business to own is one that over an extended period can employ large amounts of free – other peoples money – in highly productive assets so that return on owners capital becomes exceptional.”  Professor Sanjay Bakshi adding to something Warren Buffett said about great businesses.

I said in a past issue: “When a company’s float/operating assets ratio is above 100% it means the company is operating with “free” or cost-free money.”

But this isn’t true with insurance companies.

For an insurance company to operate on a cost-free basis it has to produce underwriting profits for a sustained period.

I look for underwriting profits of at least five years straight to consider its float cost-free.

And the company I’m going to tell you about today has earned an underwriting profit in six of the last nine years.

Cost-free float and the power of positive leverage it generates is explained more in my posts in a still ongoing series about float:

When you come across companies that generate all the above on a consistent basis you should expect exceptional returns in the future.

This is because when a company operates its entire business on a cost-free basis it means several things. 1)  It’s a great business.  2.)  It’s an efficient business.  And 3.) That float magnifies margins which will compound value in the company for shareholders over time.

So what is the wonderful company that checks all my – and Buffett’s – marks for a great insurance company?  But also fits into the criteria of Press On Research focusing on small companies?

***

I go on from here to reveal and detail the company in full in this 40 page issue.  I also compare it to a past Press On Research pick and some of its competitors

To find out what this great company is subscribe to Press On Research.

And if you’re a Value Investing Journey subscriber remember you also get a 50% discount on a one year Press On Research subscription.  Or you can join for only $49 to get tomorrow’s released issue and all back issues.

Similar newsletters to Press On Research sell for several thousand dollars at a big newsletter company so you’re getting a great value here.

If you have further questions about Press On Research please go to the link in this sentence or email me at jasonrivera@valueinvestingjourney.com.

March 2016 Press On Research Issue Released Tomorrow

Below is an excerpt from the March 2016 Press On Research issue to release exclusive to subscribers tomorrow March 15th.  If you’d like to subscribe to Press On Research go to the links above or below.

Press On Research High Def

What Do You Do When A Company You Own Drops In Price?

March 2016 Press On Research Issue

By Jason Rivera

Press On Research Volume 1 Issue 10

What do you do when a company you own stock in drops in price?  What about when it drops a lot in price?

Do you panic and get anxious?  Do you buy or sell more without doing any extra work?  Do you ask your buddies what they think of the company even if they know nothing about investing?

If you do any of these things don’t worry as you’re not alone.  This is how most investors react when something they own drops significantly in price.

But the goal of Value Investing Journey and Press On Research is not only to find the best investments possible to build long-term wealth.  But also to teach so we can become better investors and thinkers.

And a major trait of any great long-term investor is the ability to control emotions.

If you can’t control your emotions it doesn’t matter what you invest in because you’ll always buy and sell at the wrong times.  This is what most investors do.

Study after study shows most normal – average – investors buy at the height of stock prices and sell at the bottom of the price swing.

This is awful and is one reason most people don’t beat the market over time.

So how can you stop being an average investor?

There are several ways but today I want to talk about how to control emotions.

If you can’t control your emotions it doesn’t matter how great of an analyst you are you’ll still be a terrible investor.

In April 2015 I recommended what I thought was a great asset manager NAME REMOVED.  Since then the stock price has dropped ~35% depending on what price you bought at.  And I’ve gotten email from several readers asking for an update on the company.

Because of this today’s Press On Research isn’t a normal recommendation issue.

We’re going to reevaluate NAME REMOVED to see if I made a mistake in my analysis last year.  And to show you the step by step process I take when reevaluating companies I own to take emotion out of my decision making processes.

***

I go on from here to reanalyze the company in full and show the step by step process I use so you can learn to do this yourself.

I found that while the company has dropped in absolute dollar terms and the economics have deteriorated a bit that the company is cheaper now than it was last April compared to its profits.  And the business model and economics are still fantastic.

The company has an FCF/Sales of 40.3%.  Pays a huge dividend.  Is selling at only ~2 times its estimated 2015 full year profits.  And is now selling below its book value by a significant margin.

I found nothing new that would destroy the investment thesis I laid out last April.  And I was so happy after reevaluating the company that I recommend subscribers up their position in the company.

To find out what this great company is and to learn a valuable lesson on what you need to do when reevaluating a company you own subscribe to Press On Research.

And if you’re a Value Investing Journey subscriber remember you also get a 50% discount on a one year Press On Research subscription.  Or you can join for only $49 to get tomorrow’s released issue and all back issues.

Similar newsletters to Press On Research sell for several thousand dollars at a big newsletter company so you’re getting a great value here.

If you have further questions about Press On Research please go to the link in this sentence or email me at jasonrivera@valueinvestingjourney.com.

2014 And 2015 Portfolio Reviews – Still Kicking Mr. Market’s Ass

2014 and 2015 Portfolio Reviews

Still Kicking Mr. Markets Ass

The above quote from Benjamin Graham is one of my favorites.

It means in the short-term the market is driven by emotion and psychology more than anything.  But in the long-term the market – and individual stocks – get judged on how well they’ve operated and grown over time.

This is great news for us long-term oriented value investors.

If we can find a few great companies at cheap to fair prices and hold them for the long-term, we’ll have great returns over time.  Why?  Because…

“Time is the friend of the wonderful company, the enemy of the mediocre.”  Warren Buffett

With this as a backdrop, below are the 2014 and 2015 portfolio reviews for all companies I’ve recommended.

For links to 20122013, and 2013 updated numbers portfolio reviews go to previous links…  Cumulative gains below combine 2012, 2013, 2014, and 2015 results together.

2014

I realized when doing my 2015 portfolio review that I didn’t do a review of 2014.  So I’ve included both 2014 and 2015 portfolio reviews in this post.

I didn’t do much in 2014 because I started a business at the beginning of the year.  Didn’t buy or sell anything for almost a full year.  And got hired by the investment newsletter in September 2014.

These are why I didn’t write a portfolio review for 2014 here.

Below are 2014 portfolio results.

  • CMT gained 2% in 2014.
  • VIVHY gained 3% in 2014 before I sold my position on June 4th 2014 for a total gain of 50% in less than two years.
  • BOBS lost 15.4% during 2014 before getting bought on May 2015 for a total 129% gain.  I’ll get back to this in the 2015 section.
  • PARF lost 21.7% in 2014.
  • Cash earned 0% in 2014.  And this was my biggest position after selling and getting bought out in several positions.

Average gain in 2014 was 3% after including 50% realized gain from sold Vivendi position.

For context on the following numbers please read the 2012 and 2013 portfolio reviews linked above.

Cumulative average gain for my stock picks at the end of three years is 101.1%.  Or an average gain of 33.7% each year. (Not a compounded gain).

Cumulative average three-year portfolio gain equals 64.9%.  Or 22.6% each year over the last three years after accounting for cash position.  Cash made up more than 50% of portfolio for most of 2013 and 2014 after selling several positions.

Not a great year by earlier years standards but I expected a drop in results after huge years in 2012 and 2013.  I’ll explain why at the end of this post.

For now let’s got to 2015.

2015

I included two picks I made while working at the investment newsletter in 2015’s results.  The spreadsheet is below.

2015-VIJ-and-POR-Performance-Review

I’ve blocked out the names of the picks above for non Press On Research subscribers.  If you’re a Press On Research subscriber I’m sending an unedited version of the spreadsheet your way.

If you’d like to know what the companies are you need to subscribe to Press On Research.  And remember Value Investing Journey free subscribers get a 50% discount on a Press On Research subscription.

Press On Research picks gained on average 5% as of the end of 2015.

Like in 2014, 2015 wasn’t a great year for my picks either.  Even with this down year we still beat most investors.   Almost 70% of investors lost money in 2015.  And unlike the investors who lost money we continued to grow our money.

As noted above I sold out of BOBS after it got bought out in May 2015 for a total gain of 129%.

Cumulative average stock gains for my stock picks at the end of four years are 168.1%.  (Not a compounded gain)  Or an average gain every year for four years of 42%.

Cumulative average four-year portfolio gain equals 109.6% after accounting for cash position.  Or an average gain every year for four years of 27.4%.  (Not a compounded gain)

Cash made up more than 50% of portfolios for most of 2013, 2014, and 2015 after multiple sales of companies.

What does this mean?  That we’ve kicked Mr. Market’s ass over the last four years.

What’s Mr. Market Done Since 2012?

From the beginning of 2012 to the end of 2015 the Russell 3000 index gained 38%.  Or an average gain of 12.7% every year.  This index includes the 3,000 largest companies listed on US stock markets.  This is the closest thing to a micro cap index.

This means my stock picks have crushed the market by 130.1 total percentage points.  And the whole portfolio beat the market by 71.6 total percentage points since the beginning of 2012.  Even when over the last three plus years the portfolios I manage had more than 50% cash positions earning zero.

How big of a difference is this over time?

Let’s say you invested $100,000 in my stock picks at the beginning of 2012 until December 31st 2015.  At the end of four years – with no new additions in money – your money would have grown from $100,000 to $406,587.

If you followed the same above, but instead invested 50%+ of your portfolio in cash like I did, your $100,000 would turn into $263,438 at the end of the last four years.

The Russell 3000 index would have turned your $100,000 into $161,323 after the last four years.

I could have made you $102,115 and $245,264 in excess of what the market would have.

I started posting my results publicly in 2012 because this is when I began doing “real”, in-depth, investment research and analysis instead of speculating.

Results have been great thus far…  Better than I expected… But there’s still a lot of work and improvement to do as seen from the last two years subpar results.

Conclusion Thoughts

As expected my average gain per year over the last two years dropped a lot.

With the market’s continued rise I’ve sold or gotten bought out of most positions.  At one point the portfolios I managed held only two companies.  And until late 2014 I wasn’t able to deploy any of the cash towards better use.

At its height after multiple sales of companies cash in the portfolios I manage was 85% of the portfolios.  This of course means lower returns.

I also knew I wasn’t going to repeat the huge gains earned in 2013 due to the markets ever rising valuations.  This made it harder to find great and cheap companies.  In 2012 and 2013 the market was still fairly to a bit overvalued making it easier to find cheap companies then.

No matter what the market continues to do, over time I’m confident we’ll continue to beat the market by a wide margin.  And continue to compound our wealth over time.

But this isn’t all we’ve done in the last few years…

Since Value Investing Journey started on a free WordPress site until now on a paid WordPress site there have been more than 200,000 total views on the joint sites.

And after coming back from the investment newsletter at the beginning of 2015 there have been a lot of changes and improvements on the blog.

The major change being the blog is now dedicated towards helping others instead of myself.

Some other highlights from 2015 are below.

Here’s looking forward to an even bigger and better 2016.

Thanks so much for everyone who’s been a part of this journey so far.  And please let me know how I can continue to improve things going forward in the comments below.

Jason Rivera

P.S.  And remember if you want access to my exclusive stock picks that are crushing the market over the last four years you need to subscribe to Press On Research.  And free Value Investing Journey subscribers get a 50% discount on a year-long Press On Research subscription.