Here's the damage This month, managing the Thrifty 30 portfolio has been like playing that fairground game where a gopher pops up out of a hole in a table and you have to smack it back down again with a mallet before another appears from a different hole. Eventually they pop up so fast you can't keep up, and the fairground owner keeps the prize.
True to form I'm not reviewing performance, how much money the portfolio is making and whether the shares in it have gone up or down, until the Thrifty 30 experiment has run its course in 2015. I cannot extrapolate meaning from monthly price movements, and guessing would be a waste of time.
Performance issue needs addressing Although it’s January, and I feel compelled to review the Thrifty 30’s annual performance, I’ll refrain because I just don’t think it’s productive. There’s another way of looking at performance, though, and I don’t think I did very well in 2011.
Last year ended introspectively, with a failed trade in Armour that was both expensive and misguided, but before then I felt I was losing my grip on some of the constituents in the Thrifty 30 portfolio.
My resolution this year is a simple one to make and perhaps a more difficult one to achieve. It’s:
Only to add a company to the Thrifty 30, or hold a company, if I can articulate my reasons in less than two minutes in words a teenager can understand.
Maybe simple statistics do trump judgement Every time I read a review of ‘Thinking Fast and Slow’ by Daniel Kahnemann, a psychologist who won the Nobel prize for economics, I think I should read it. Especially in the light of a decision that is weighing heavily on me.
One month in the life of the Thrifty 30 November was such a frustrating month. Every new idea crumbled into dust. The result: £7,500 of the Thrifty 30 portfolio in cash and one demoralised investor. I started with high expectations. The addition of Smith & Nephew would be a departure. Valued by the market at £500m, it’s ten times bigger than any the companies in the Thrifty 30. It’s also expensive, trading at nearly three times book value.
No place for the feeble Below is the list of Thrifty 30 companies whose year ends have passed and I have yet to review. The reviews help me decide whether to hold the companies for another year, eject it from the them, or add more shares.