loader from loading.io

107 - Investing Goals for 2021

The DIY Investing Podcast

Release Date: 01/18/2021

111 - Eliminate your investing mistakes show art 111 - Eliminate your investing mistakes

The DIY Investing Podcast

A focus on eliminating your investment mistakes is the easiest way to improve your investment returns. Don't repeat the same mistake twice by making sure you learn the right lessons. Signal vs Noise. Process vs Outcomes.

info_outline
110 - How I am incorporating Momentum into my Investing Process show art 110 - How I am incorporating Momentum into my Investing Process

The DIY Investing Podcast

Both momentum investing and value investing provide excess returns. This episode outlines how I plan to profit from both forms in my investing process. Specifically, price and business momentum will be added to value investing. The use of price momentum should limit my losses when mistakes are made. Meanwhile, by analyzing business momentum I am likely to reduce the probability of making mistakes.

info_outline
109 - How much time should you research a stock before buying? show art 109 - How much time should you research a stock before buying?

The DIY Investing Podcast

The process of researching stocks requires a significant amount of time investment. You should optimize the time you spend researching by focusing on three questions: Cheap? Good? Safe? You should be able to answer in ten hours or less.

info_outline
108 - Coffee Can Portfolio Investing show art 108 - Coffee Can Portfolio Investing

The DIY Investing Podcast

In this episode, I discuss the coffee can portfolio approach to investing. This investing strategy involves never selling a stock once it is bought. Therefore, you must seek high-quality companies with long runways for growth and high returns on capital.

info_outline
107 - Investing Goals for 2021 show art 107 - Investing Goals for 2021

The DIY Investing Podcast

In this episode, I outline my top investing goals for the new year. I aim to identify 2 new companies worth buying and my goal is to attain a 20%+ annual return for 2021. I also cover process-based goals relating to how to go about investing research. Finally, I would like to pass the Series 65 exam so that I can begin managing money for outside clients. 

info_outline
106 - When to Sell Stocks show art 106 - When to Sell Stocks

The DIY Investing Podcast

Many value investors lack a clear strategy on when to sell stocks in their portfolio. This decision ought to be based on opportunity cost, potential investment mistakes, intrinsic value, and return differential between old and new companies.

info_outline
105 - Investing vs Speculation vs Gambling show art 105 - Investing vs Speculation vs Gambling

The DIY Investing Podcast

An investment is any investment operation that utilizes a margin of safety, provides an adequate return of 10% or more, earns that return from fundamental cash flows, is a positive-sum game, and bounded by a range of prices and terms.

info_outline
104 - Terminal Value and Why Intrinsic Value grows over time show art 104 - Terminal Value and Why Intrinsic Value grows over time

The DIY Investing Podcast

Terminal Value is the net present value of all future cash flows discounted back to a specific year in the future. Intrinsic value is fixed, but your estimate of intrinsic value will change over time.

info_outline
103 - The Deflation Myth show art 103 - The Deflation Myth

The DIY Investing Podcast

The Deflation Myth has been accepted primarily because economists have used false assumptions in their analysis and because debtors, namely world governments, tend to hold massive political and cultural power. It is in their best interest to convince you that deflation is bad so that they can inflate away their debts. Yet, most investors are harmed more by inflation than they would be by deflation. 

info_outline
102 - Don't use Enterprise Value - Here's Why show art 102 - Don't use Enterprise Value - Here's Why

The DIY Investing Podcast

Be conservative when valuing companies. Don't give managers credit where they don't deserve it. Enterprise value should only be used when companies hold debt. Yet, you should only buy companies with net cash.

info_outline
 
More Episodes

Mental Models discussed in this podcast:

  • Goals and Habits
  • Concentration vs Diversification
  • Signal vs Noise

Please review and rate the podcast

If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. 

Follow me on Twitter and YouTube

Twitter Handle: @TreyHenninger

YouTube Channel: DIY Investing

Support the Podcast on Patreon

This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron.

Show Outline

The full show notes for this episode are available at https://www.diyinvesting.org/Episode107

2021 Investing Goals

  • Identify 2 new companies worthy of holding a 20% position in my portfolio
    • Actually, build those new 10-20% positions by selling out of 2 of my current holdings. (I have already identified which ones to sell)
  • Become more comfortable with high levels of concentration.
    • My current largest holding is 35% of my portfolio. It's grown to this size from 20% and if all goes as I expect, it will likely continue to grow as a percentage of the portfolio. I need to become comfortable with 50% of my portfolio in a single stock if that company earns it through business performance. 
    • I may also sell 2 of my current positions before I have found the two new positions. Consequently, I need to tolerate holding less than 5 stocks for part of the year.
  • Earn a 20% annual return for the year 2021.
    • I earned a return of 22% in 2020, beating the S&P 500 by 3.7%. 
    • I believe I can match or exceed that return again this year.
    • My discount rate is 10%, but that is used solely for the fundamental analysis portion of my stock analysis. With the current setup of my portfolio companies, I am often seeking 10% of the cash flows of the business, and an additional 10%+ from multiple expansion.
    • I am optimistic that I can achieve this rate of return and perhaps substantially exceed it due to the types of companies I currently hold. We'll see how that comes to fruition.
    • This is clearly an inferior goal as it is results based instead of process-based. I'm simply documenting it s that I have it as a reminder.

2021 Business Goals

  • Pass the Series 65 Exam
    • Needed to become a Registered Investment Advisor
    • Will allow me to take on clients interested in me managing their portfolio.
    • If you'd like information about this and are perhaps interested in joining a waitlist, you can reach out for my information at my email: trey [at] diyinvesting.org
  • Marketing Goals:
    • 5,000 Twitter Followers (Currently just over 2k)
    • 1,000 YouTube Subscribers (Currently just over 300)
    • At least 1 outside investing client
  • Useful research goals:
    • Screen X number of companies this year (Say 100)
    • Write-up 12 companies this year
    • Read a 10k a day or a 10k a week, etc...

Goals I will no longer pursue

It used to be my goal during 2020 to move to only checking stock prices once a week. 

Going forward, I will no longer have that as a goal. I have found that my focus on illiquid stocks means that I'm often monitoring stocks frequently because it takes a long time to build a stock position. If I had completed that prior goal, my results would have been worse.  

Summary:

In this episode, I outline my top investing goals for the new year. I aim to identify 2 new companies worth buying and my goal is to attain a 20%+ annual return for 2021. I also cover process-based goals relating to how to go about investing research. Finally, I would like to pass the Series 65 exam so that I can begin managing money for outside clients.