Valueinvesting.de Stock Portfolio vs. S&P 500

Buy a dollar for 50 cents. So simply was the philosophy according to Benjamin Graham (*18th May 1894 ; + 21st September 1976), consultant, investor and lecturer at the Columbia Business School – in whose honors later a chair, the so called Graham/Dodd chair, was set up as well as author of the standard works Security Analysis and the Intelligent Investor.

My name is Mario Wolff. I am a german value investor and operate a detailed stock portfolio with emphasis on the so-called High Return On Assets Stocks, thus shares from companies, the high net yields resulting from the capital invested by them.

INVESTMENT STRATEGY

The Valueinvesting.de stock portfolio is led against an own capital funds benchmark – the American shares index Standard and Poor´s 500. In the meanwhile the selected investment strategy plans a strong concentration of the assigned capital on a limited number of companies, which have in the long term incredible economic prospects to be sold at attractive prices. The focus is less on the annual movements of their share quotations as it is on the increase in profits of the companies themselves. Because of this as soon as the economically consolidated companies´ profits grow (Warren Buffett shaped for this term Look-Through-Earnings), will the Valueinvesting.de share depot also finally win on market value.

In the meantime the portfolio consists of ten different companies. On the basis of the estimated companies´ profits of the current year lies the average exchange – profit relationship at a value of 12. This corresponds to a net yield profit of 8.3%. In comparison to this, the German rotating net yield which is a standard of the interest level on the pension market amounts to 4.3%. The dividend yield of the share depot corresponds (with 3.9% after tax deductions at source) to the average net yield (before taxes) of all presently in circulation securities (loans) at fixed interest.

The represented period in which a detailed data acquisition was accomplished, represents the absolute minimum for a net yield comparison. At the same time the largest deficiency lies in a missing period which was characterized by a declining total market.

Crucial is not the short term but the performance over a long time. Since the attainable net yields of the total market – here represented by the Standard and Poor´s 500 – will lie in some years by plus 20 or 30% however fail negatively in other years, is the data in view of one or two years not important. A meaningful period extends usually over a period of at least five years whereby, here both the upswing and downswing phases should be included.