It is time, yet again, for the monthly airing of my private financial laundry. My hope is that maintaining a journal of my savings will help provide additional motivation to save and allow me to spot trends. It will also serve as a record, so that I can look back and analyze.
In August, my portfolio basically sucked wind due to the underperformance of foreign stocks. Well, this month the EAFE was up about .90% and the S&P 500 was up almost 60%. As I have mentioned before, I am “overweight” foreign stocks. See Media Pin of the Week – More GMO, Weekly Media Pin – Grantham on Graham, Best Foreign Value Factor ETFs, Resource Roundup: More CAPE, and Foreign Value Factor ETFs Update.
I still have about 50% of my liquid assets allocated to foreign stocks. As I mentioned before, The Capital Spectator is a good blog that does that does a monthly asset class returns summary.
I am still plowing into foreign stocks. I buy that they have higher future returns, in expectation. It’s kind of just math. Also, I don’t buy all these comparisons that normalize for sector exposure.
First, sector exposure is like 50% of all security returns historically (if memory serves), and I think that misses the point that the sales, margins and therefore profits of most foreign sectors haven’t rebounded as much as U.S. companies since the GFC, so yeah the one year trailing or foreign earnings ratios might look similar, sector adjusted, but that’s why the CAPE and Tobin’s Q and other metrics that smooth the earnings have demonstrated superior predictive powers; because they limit some of the noise from the economic vicissitudes. At least, that’s my take.
Another material impact on the portfolio was a negative reaction to the most recent quarter from CAG. I basically gave back a ~20% gain in the stock after the most recent quarter. I will probably hang in with it at this valuation, despite what I view as elevated risks due to a large merger integration (Pinnacle Foods).
That being said, let us turn to the personal finance diary.
In our last episode (end of August), I was able to grind up to a little over $186,000 in investments. As a reminder, I only include liquid investments in these monthly figures, as I don’t think it is very helpful to start marking my real estate and other illiquid assets monthly. I will mark those at year end.
As of the end of September, I was up to just over $188,000.
Spending was again pretty elevated as the medical bills from my kids’s surgical procedure continued to roll in. After receiving at least 4 different bills from four different providers, of which I struggled to make heads or tails, I THINK I am done paying for this minor surgical procedure. I am coming around to the view that the U.S. healthcare system is totally broken and we should probably try emulating the rest of the developed world at this point (nationalized/medicare for all). I agree with Charlie Munger that this is the next likely step.
One other reason that I’ve not been posting as often is that I have been “up in the gym” a lot more. I am starting to really notice a change in my body composition, but the weight loss has slowed down a lot.
I wanted to make a couple of recommendations related to this topic that I would find valuable if our places were reversed.
First, these over the ear/noise cancelling headphones are really good for the price. They aren’t Bose Quiet Comfort quality, but they are definitely the value investor pick. Second, I discovered this supplement/vitamin testing site Labdoor. They provide independent ratings/testing of vitamins and the like to see if they match their labels and/or contain questionable other ingredients. I thought it was neat and hope you do too.
For example, check out the EPA and DHA content in the Kirkland brand fish oil pills. Probably not what you would expect from a “quality” store brand like that.
To sum up, this month was just another grind. I made about $2,000 in contributions to my investment accounts. Overall, my investments basically did nothing.
I am still hoping to cross $200,000 by the end of the year.
As far as investing, I did finally buy some BRX. I’m down about 5% on that as of now, but I plan to hold/DRIP it for a while.
Until next time, thanks for reading. Raider loves you!