2021 Performance Review – 22.9% Average Annual Investment Returns The Last Decade
In today’s post I’m sharing my 2021 performance review and how I’ve produced 22.9% average
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How To Avoid Investing In Stocks That Underperform
As a group, we’d just finished putting in more than 100 hours of research into a stock during a group case study in our Value Investing Masterclass.
At the end of this analysis, we each individually decided there was too much risk to invest in it… Except for Shafeeque. He still wanted to buy the stock.
But before I get to why… You need to understand how we got here and why we were analyzing this stock together.
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Shafeeque – one of our Masterclass students – brought this stock to our Masterclass group and said it looked promising after his first look.
At this point, Shafeeque and this group of Masterclass students and I had been together for several months, so everyone knew how to find and evaluate great stocks fast.
So, when Shafeeque brought this to the group we all knew it had the potential to become a great investment.
Because of this, we set a schedule to meet over Zoom to begin analyzing this stock as a group.
We did the initial preliminary analysis where it looked great… It had large margins and produced consistent profits and cash flows. Plus, its balance sheet was strong too.
We then did the full preliminary analysis where it still looked great… But even better it looked undervalued.
Huge and consistent profits combined with undervaluation… These are the stocks we aim to find in the Masterclass.
But, because of the strict criteria we use to find these stocks, only 1 out of 10 companies pass these first two stages of the analysis. When this one did, we all got even more excited.
Even me as the teacher/facilitator of the group.
But I reminded everyone we still needed to dig into the annuals, quarterlies, and proxies before we get too excited.
We then scheduled more live group trainings to analyze the stock to begin digging deeper.
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Over the next few weeks while analyzing the annual reports, quarterly reports, and proxies what we found wasn’t great.
By the end of the analysis, we were all against investing in the company due to the risks we found… Except Shafeeque.
We then looked even deeper into its older annual reports to find any info that would support the investment.
We also looked at Google separately for any information we could scour.
Even after this further research, everyone came to the same conclusion… None of us thought it was a good investment anymore.
Except Shafeeque.
After hundreds of hours of combined research, individual research, reading and analyzing years of financial reports, and our Google ninja skills I asked Shafeeque why he wanted to invest in the company still?
Not because I wanted to prove him wrong… I wanted to understand his reasoning. Because as I tell all students, we will disagree on investments – maybe often – after you learn the basic principles from the Masterclass.
But I wanted to understand his reasoning for continuing to want to invest in the stock… Mainly to see if me and the other students were missing something.
While I don’t remember exactly what we both said, the conversation went something like this…
“We’ve put so much time into researching this stock… Isn’t there any way this investment makes sense?”
I remember smiling and saying… “For me, no. There was no way I could invest in it in the portfolios I manage. The risks were too high for me.”
“But what about all the time we put into researching the stock… Isn’t that wasted if we don’t buy it?”
As a group, we’d put in hundreds of hours of researching this stock.
As individuals, we each put in probably another 10 or 20 hours.
Is this wasted effort if you don’t buy a stock after putting in this amount of research?
Only if we never use that information, knowledge, and experience again.
You CAN’T get emotionally invested in any stock you own or are researching.
No matter how much time you put into researching to.
And no matter for how long you may own the stock after buying it.
If the data and information you see is telling you not to invest in it… You shouldn’t invest in it. No matter what.
Why?
Because if you still end up investing in something or keeping something just because you’ve put a ton of time into it you will take on more risk… And this will lead to lower investment returns.
This is one of the hardest things for any investor to learn.
To illustrate this point… Since deciding not to buy the stock we studied together, its only up 15.6% since October 1st, 2018 when we evaluated the stock together.
This is an average annual return of 5.2% per year.
While this is okay.
The market in that same time has returned 31.6%… Or 10.5% per year on average.
And the portfolios I manage have returned 59.6% over the 3 full years from 2018 through 2020 end of year. Or an average of 19.9% per year on average.
NOTE – I only do my performance reviews once per year at the end of each year, so I don’t have my full or even partial 2021 returns done yet.
This is why you MUST listen to what the data is showing you when analyzing an investment.
Because even though the stock is up since then… It underperformed the market and other great stocks we’ve found to invest in.
We aim to beat the market.
But how do you learn how to do this? How do you learn to let a stock/investment go after huge amounts of time and resources spent on evaluating something?
How do you learn to read annuals, quarterlies, and proxies to find major red flags to avoid?
How do you learn to avoid investing in mediocre stocks that underperform?
You can do so in our Value Investing Masterclass.
Where not only will we do these kinds of live group trainings to find and evaluate stocks together.
But for the first 10 students to sign up to the newly relaunched Masterclass you’ll get more than $9,000 in bonuses for FREE. Including two brand new ones we just added.
Two Brand New Bonuses Worth More Than $9,000 For The First 10 People To Join
- Four Free 1 on 1 trainings with me – $4,000 Value Yours Free
In these sessions you’ll learn anything you want to with me and the 15+ years of experience I have…
This includes everything from learning the terminology one on one all the way up to and including you and I evaluating stocks and reading annual reports together.
2. The Value Investing Blueprint – $5,000 Value Yours Free
My team and I aren’t even selling this yet, but we will next year for $5,000.
The Value Investing Blueprint is the exact step by step process I’ve developed over the last 15+ years to find, evaluate, and value stocks fast.
This Blueprint allowed me to evaluate 3,943 stocks in 73 different countries in 40 days last year during the Covid Crash.
And it’s also a huge reason I’ve produced 23.5% average annual investment returns in the portfolios I manage in the last 9 years.
Returns that legitimately make me one of the best stock pickers on Earth over the last 9 years.
These bonuses are so new we haven’t even had the chance to add them to our sales information for the Masterclass yet.
I wanted to let you know about them today because they’re only available to the first 10 people that sign up to the Masterclass.
And as of this writing, we’ve already got 2 spots confirmed… With another 2 potentially joining us in the next couple days.
If you want to take your value investing and stock analysis skills to the next level with the Masterclass AND these free bonuses… Make sure to join before the bonuses are gone.
Always in your service,
Jason Rivera
P.S. We believe in the Masterclass so much, that we’re giving it to you for free for 14 days after you sign up.
Meaning, you don’t pay a dime for the Masterclass – or the bonuses – until day 15 of the Masterclass.
P.P.S. To learn more about this, and our other bonuses you’ll get for joining the Masterclass today click the link above or below.
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