Railroad Fund Status July 31, 2020
On July 31, 2020, the Railroad Fund balance, the fund I’ve written about a dozen articles about, stands at a fair market value balance of $10,985.10. Here is my schedule:
49.060606 Shares of Norfolk Southern Corporation – Closes at $192.21/Share FMV = $9,429.94 (Avg Buy Price/Share = $203.83 for Basis of $10,000.00)
Cash Position including recent dividend payment from NSC = $1,555.16
Total Fund Balance = $10,985.10
FMV Gain as a % Since Inception: = 9.85%
Gain on the initial fund basis of $10,000 is $985.10.
Dow Jones Industrial Average on Oct 22 at opening: 26,828
Dow Jones Industrial Average on July 31st 2020 at closing: 26,428
Market Change as a Percentage Decrease: -1.49%
As stated in the first few articles about this fund and the application of value investing for this fund group, value investors will outperform the market if they adhere to the principles of value investing. These principles consist of:
- Using business ratios to evaluate and analyze stock investments;
- Identifying a pool of similar investments whereby the criteria for membership is for all intents and purposes the same;
- Creating buy/sell triggers based on ratio results;
- Set buy/sell points for the respective stock investments;
- Acting on those buy/sell points without emotional attachment; AND
Even with the market change associated with the COVID-19 pandemic; this fund continues to outperform the DOW Jones Industrial Average. In addition, I have only made about half of dozen trades in the last 9.5 months. Again, adherence to the buy sell points with the model. My sell point for Norfolk Southern Corporation is $219.88. It is still my conviction that this value will be reached prior to Oct 21, 2020 when the fund started. If interested in understanding this form of investing; please read the series from the beginning through today.
Today is August 11, 2020. At 11:17 AM, NSC’s stock price peaked at $211.65 per share. The current DOW Jones Industrial Average is 27,687 for a gain since last Oct 21, 2019 of 3.2%. My current fund balance as of close of business today the 11th is $11,711.74 including a dividend receivable from NSC of $46.17. Thus the DOW has increased by 3.2% and this fund has increased 17.12%. I am using the close of business trading price of $206.08 for NSC.
Act on Knowledge.
Do you want to learn how to get returns like this?
Then learn about Value Investing. Value investing in the simplest of terms means to buy low and sell high. Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.
There are four key principles used with value investing. Each is required. They are:
- Risk Reduction – Buy only high quality stocks;
- Intrinsic Value – The underlying assets and operations are of good quality and performance;
- Financial Analysis – Use core financial information, business ratios and key performance indicators to create a high level of confidence that recovery is just a matter of time;
- Patience – Allow time to work for the investor.
If you are interested in learning more, go to the Membership Program page under Value Investing section in the header above.
Join the value investing club and learn about value investing and how you can easily acquire similar results with your investment fund. Upon joining, you’ll receive the book Value Investing with Business Ratios, a reference guide used with all the decision models you build. Each member goes through three distinct phases:
- Education – Introduction to value investing along with terminology used are explained. Key principles of value investing are covered via a series of lessons and tutorials.
- Development – Members are taught how pools of investments are developed by first learning about financial metrics and how to read financial statements. The member then uses existing models to grasp the core understanding of developing buy/sell triggers for high quality stocks.
- Sophistication – Most members reach this phase of understanding after about six months. Many members create their own pools of investments and share with others their knowledge. Members are introduced to more sophisticated types of investments and how to use them to reduce risk and improve, via leverage, overall returns for their value investment pools.
Each week, you receive an e-mail with a full update on the pools. Follow along as the Investment Fund grows. Start investing with confidence from what you learn. Create your own fund and over time, accumulate wealth. Joining entitles you to the following:
- Lessons about value investing and the principles involved;
- Free webinars from the author following up the lessons;
- Charts, graphs, tutorials, templates and resources to use when you create your own pool;
- Access to existing pools and their respective data models along with buy/sell triggers;
- Follow along with the investment fund and its weekly updates;
- White papers addressing financial principles and proper interpretation methods; AND
- Some simple good advice.