A great portfolio is in my opinion a group of stocks of high quality and wonderful companies bought at fair prices. With such a portfolio you basically don’t lose money. The stock prices may swing, but the earning power of the portfolio will generally increase over the long term when you own a group of wonderful businesses.
The below diagrams show the development of my stock portfolio vs the Nasdaq 100 since I started reading and studying Warren Buffett and Berkshire Hathaway more intensely. There’s not many who can say they’ve beaten the U.S. stock market the last few years! The portfolio reflects what I’ve learned from the history of Berkshire Hathaway, and it comprises of companies that I would classify as wonderful businesses with durable competitive advantages bought at fair prices. I’ve been in and out of cash during the period as I’ve discovered opportunities and stocks of wonderful businesses at a fair price.
As you can see, the portfolio has doubled in roughly three years. I aim to get at least 10-20% yearly, and beat the market averages of about 7-10%, and so far it looks pretty good! Last year was north of 30%!
Update October 10th 2019:
In the last 12 months the portfolio has gained nearly 50%. The yellow line in the diagram below is the NASDAQ 100.
I consider myself a long term net buyer of stocks, and it is in my interest that prices stay low. If you were going to be buying hamburgers for the rest of your life, would you want the prices to go up? I’m interested in buying stocks and earning power cheap in the long run, and I’m hoping for a decline in stock prices, so that I can get more bang for the buck in the future.
I’m thinking about sharing insights into which stocks I am invested in and which stocks I have on my watchlist. Would you be interested in having a look into which stocks and cash position I am holding right now, so that you might get ideas for your own portfolio? Show your interest by signing up here, and I’ll set up a page to share it with you on a regular basis if there is demand for it.
Update April 2021
Here’s the three-year performance since I started sharing my performance in the Philosophers’ Legacy Portfolio. It’s still beating the market by a large margin, even though my two largest holdings aren’t the ones moving the needle the most. That’s because I have my largest bets where I think I will lose the least. Then the upside will take care of itself.
