Thursday, June 30, 2011

Q2 2011 Returns

Well it looks like we've got another quarter under our belt, so that means it's time for another performance update.  However, this time around I've added some new exhibits I think you'll like, so read on!
  • I came into the year with $126,967 and since then deposited $35,000 into my account.  YTD my holdings have appreciated by $8,340, leaving me with $170,307 as of 6/30/2011.
  • YTD my IRR has been 12.4%, whereas the IRR of my hypothetical S&P Portfolio is 11.3% (assumes dividends are reinvested AND the $35K I deposited was used to buy additional SPY shares at that day's closing price).
Below I included a waterfall graph that compares my results vs. the hypothetical S&P - the blue bars are beginning and ending balances, the green bars represent appreciation, and the red bars show deposits (click to enlarge).

Additionally, I've also included a summary report that compares my portfolio to the S&P from 2006 through Q2 2011.  As you can see, the differing IRR's have had a huge impact on the respective ending balances.
Lastly, I wanted to take a sentence or two to talk about my holdings and the market in general.  With regards to the market I have absolutely no idea whether it's under or overvalued, although my gut tells me to err on the side of caution (which is why my cash balance is so high).  As for my specific holdings I'm actually pretty optimistic - I think CSCO and BAC are significantly undervalued and should do well over time.  As for LUK and TTT I expect the owner/operators to continue deploying capital and earning attractive returns for shareholders.  Lastly, I think SHLD and JOE are both undervalued and misunderstood (AND they are also controlled by two of the best capital allocators out there) - so while I have no idea what the future will bring I think the market is significantly underestimating the upside at these prices.  Anyway, see below for a snapshot of my portfolio as of 6/30/2011 (click to enlarge).

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