Value Investment Fund Status Week 11 – Good Week
During the week ending January 8, 2021, the Value Investment Fund expanded 1.3%. Whereas the DOW reported a stronger uptick of 1.5%. Again, exceptional growth for the fund is held in check due to the continued poor performance of the REIT Pool. The concerns about the ability of folks to pay rent during this lockdown period is holding the pool in check. Many institutional investors in these stocks are waiting for the 4th quarter reports; the preliminary reports are due out in two weeks.
At the beginning of the week, the Value Investment Fund’s status stood at $116,231 (see End of December 2020 report). On Friday, Union Pacific was sold at $215.17 as that particular stock soared that day. In total, Union Pacific had a 23.66% return in only 72 days. This was another successful full transaction. This transaction added $4,620 to the realized returns total of $9,177.38 including dividends earned of $1,122.12 in 79 days. This is tracking for a 42% annual return. The Investment Fund is still adhering to the expected return of at least 34% during 2021.
The current status is as follows:
REITs Pool # of Shares Cost Basis Market Price* Fair Market Value
– Equity Residential 574.459 $30,000 $57.26 $32,893.52
– Essex Property Trust 48.9644 10,000 232.89 11,403.32
– UDR 606.9803 20,000 36.38 22,081.94
Sub-Totals $60,000 $66,378.78
– No Current Holdings
– Comerica Bank 369.9593 20,000 60.38 22,338.14
Dividend Receivables (Comerica Bank, Essex, Equity, UDR) 918.23
Cash on Hand (Sale of Union Pacific, Options & Dividends) 28,259.15
Totals $100,000 $117,894.30
*Net of transaction fees of $1.00 per share; thus the amount in the schedule equals the actual market price per share at closing less $1.00.
The Investment Fund’s overall status for the eleven weeks to date for the new year against three of the top indices is as follows:
DOW Jones Industrial Average 1.8X Higher
S&P 500 1.7X Higher
S&P Composite 1500 1.7X Higher
Overall, the fund is outperforming the market. One of the core four principles of value investing is patience. Since the COVID-19 vaccine has started distribution to the country, it is just a matter of time to see recovery and acceleration with REIT stocks. While most of the market has already displayed market price recovery from the market decline back in March of 2020, REIT’s have not recovered due to the higher than normal unemployment status nationwide. As this begins to turn positive, REIT investments will accelerate with their market price recovery back to pre-COVID prices. It is just a matter of time.
New Activity During Week 11:
- Sold Union Pacific Railroad for a net gain of $40.19 per share on a $174 per share for a 23.66% return in 72 days.
- Earned $218.51 in dividends from UDR, Inc.; UDR issued a dividend of 36 cents per share on 01/08/2021.
New Information Released During Week 11:
- Sold Union Pacific – 23.66% Return
- Value Investing – Industry Standards (Lesson 13)
- Intrinsic Value of Essex Property Trust
As covered in multiple articles and lessons, patience and adherence to the respective buy/sell models within the Value Investment Fund will generate far superior returns with value investing over any other investment model. 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.
© 2021, David J Hoare MSA. All rights reserved.