Sunday, June 01, 2014

The April Fool's Portfolio : The End.

I'm stopping the April's Fool portfolio. All stocks were liquidated last Friday.

There are two issues with a Current Net Assets Value portfolio :

a) It has a "J-curve" characteristic.

The experience from folks who employ this strategy often experience a slight dip before it starts rocketing ahead. I felt that the wait will be substantial and have to prepare my funds for law school, so it does not make sense to continue with this portfolio.

b) You need more stocks for this to work.

I would expect a 20 stock portfolio to be more successful. This strategy is actually waiting game and we're waiting for investors to start being interested in these counters again. More stocks would increase the probability of hitting a jack-pot.

c) There's something to be said about investing purely in a quantitative manner.

I thought I should add this point. When i started working on the Bloomberg terminal on back-testing this portfolio, I made a decision not to consider the narrative for these stocks. This is probably a mistake. Investing is a science and an art. After considering a portfolio of stocks, it may be useful to some qualitative research. Perhaps these stocks are bargains because somehow value was being destroyed.

ISIN CODENAMEPRICESHARESTotal ValuePrice PaidOriginal Value
E18ECS Holdings0.64200012800.651300
KI3Hu An Cable0.08100008000.1021020

Fortunately, this is not the end of the CNAV strategy. Other financial bloggers do experience success with this investment startegy.

I recommend that you visit BigFatPurse if you would like to watch a similar portfolio in action :

1 comment:

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