If you look for magic formulas to get rich this column is NOT for you. At Bullsandbears.it, we are convinced that an investment strategy based on sound and long term analysis can guarantee returns above the average. Preparation, perseverance, patience (and a little bit of luck) can make investors get the financial satisfactions they deserve (and that alone – probably – they would struggle to get).
Why did we choose this name for our Portfolio? In the imaginary of many people, one million dollar represents a symbolic goal towards economic well-being and the realization of dreams and projects cultivated for a long time.
- We will invest in stocks listed on US markets. We prefer to limit the field “a priori”, concentrating the energies on the markets (NYSE and Nasdaq) that for size and accessibility, liquidity and transparency, are ideal for any investor. As a consequence, the benchmark for our portfolio is Russell 3000 (^RUA)
- We will start with a “virtual” capital of 150,000 Dollars with the aim of multiplying it 7 times and transforming it into 1 million dollars in 15 years. This equates to a compound annual return of around 13.5%. Considering that the average yield of shares over the last 89 years has averaged media pari al 9,5%, and that Warren Buffett, the investor with the best long-term track record, has achieved an average annual average return over the past 52 years around 19%, we assure you that the goal is really challenging and the performance … Excellent!
- There are no limits to the amounts invested and / or the cash held in the portfolio. Depending on the situation, we may decide to invest all of the capital or keep a more or less relevant part of it liquid to seize subsequent opportunities
- We will invest in companies that have a reasonable discount compared to their fair value or that we believe have a significant competitive advantage or are in special situations (briefly explaining our valuations)
- It will be possible to sell some stocks short, without speculative intent but to profit from temporary situations in which some actions appear to us to be extremely overvalued compared to their fair value
In our “challenge” we will not consider the costs of commissions and taxes on capital gain; we will do this in order to be able to correctly compare with the benchmark, even though we know that in the real world both brokerage costs and taxes have a negative impact on the final performance (independent of the investor and his choices).
Every time we perform a virtual operation, we will indicate with a message on the blog all the relevant details (name and ticker of the title, quantity purchased / sold, price).
Once a month, in the newsletter and on the blog will be available a summary of the operations performed and an updated situation of the portfolio with the monthly performance, YTD (cumulative in the year) and cumulated from the beginning of the “challenge”, compared to the benchmark.
All that said, we can only invite you to follow us on this journey and share with us your comments and your experiences as investors!