Value Investment Fund Status Week 6 – 3.2X DOW Jones Industrial Average
During the week ending December 5, 2020, the Value Investment Fund reports a 3.88% gain in one week. Whereas the DOW only reported a 1.2% gain. Thus, as happened multiple times this year to date for the fund and during Year One of the fund; the fund simply outperformed the DOW Jones Industrial Average. Why?
Quality stocks purchased at deep discounts tied to intrinsic value and quantified by excellent financial analysis.
At the beginning of the week, the Investment Fund’s status stood at $114,576.71 (see the end of November report) and then on Friday night after closing (December 4, 2020) the Fund’s balance was $119,024.01. This was a 3.88% gain in one week. The following is the Fund’s respective individual balances by pool along with cash and dividend receivables:
REIT Pool # of Shares Cost Basis Market Price* Fair Market Value
– Equity Residential 574.459 $30,000 $62.37 $35,829.01
– Essex Property Trust 48.9644 10,000 251.73 12,325.81
– UDR 606.9803 20,000 39.68 24,084.98
Sub-Totals $60,000 $72,239.79
– Union Pacific 114.9557 20,000 205.05 23,571.67
Dividend Receivables (Norfolk Southern & Union Pacific) 203.89
Cash on Hand (Sale of Norfolk Southern & Options) 23,008.66
Totals $100,000 $119,024.01
*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 DOW increased during the past week driven by positive signs from Congress related to additional economic relief. The main driver of the fund’s increase in value is tied to the REIT’s Pool of investments. The long-term benefit of economic recovery drives the value of real estate rentals higher and thus, the huge gain that exists in this pool. Specifically, look at the value change in the past 48 days since purchase of the respective shares with a cumulative cost basis of $60,000. Gain since inception is 20.4%. 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.
© 2020 – 2021, David J Hoare MSA. All rights reserved.