The Oracle of Kanooka Grove

Summary (2018 - Jan 2022):  

• CAGR: 15.3%,  weighted average 10/2018 - 1/2022
• Total Return: 29.2% with a 1.8 year average holding period (div + cap gain)

Holdings: SRG AMI PLS^ KGN NAB SSG HVN BLD SGP NTD PGC MXI CLH* TGR HLO ANZ TER 4DX PTL SXE MMI NZ IOU FFT MVP RRL RVR MLD KAR NIC NWH ADH NGI MYE.

I've been investing since 2018. This page documents my experience and purchase decisions for future reference (because it is getting really confusing the more stocks I buy). It summarizes why I bought a stock at a point in time, and is in no way a recommendation to buy a stock now or in the future*. It is listed from newest to oldest.

Part 1: Purchase decisions.
Part 2: Current investment strategy
Part 3: Portfolio snapshot

*I am not a financial advisor. This page does not contain  any financial advice or recommendations. My typical purchase is less than five figures and I consider investing a hobby.

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PURCHASE DECISIONS

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29/4/22 $$ ASX:PTL Pental (69m) - the archetype durable consumer goods small company. This is the company that are behind some really popular domestic brands such as White King Bleech, and the main australian distributor for Duracell, LUX, and Huggies. No debt. Stable 7% franked dividends. Price is rock stable. Covid. No Covid. Rate hike. Still about 40c/share. PE 10, PB 1. Solid fundamentals. Downside is that is is a rather small company.

1/2/22 $ ASX:RVR Red River Resources (93m) - 0.19c. effectively zero debt. paid off debt, rising free cash since 2020. positive cash flow with PE 16.7. PS 0.8. Starting to turn a profit after a few years. Antimony, zinc, copper and other base metals. Making money and is should be starting to make more.

16/12/21 $ ASX:MYE Metarock (107m)- zero debt; PB 1.4; PEG 0.4; During the california gold rush, most speculators got burnt, but the general store owners and the companies that sold supplies to the speculators made bank. Metarock provides services to the mining sector - the modern day general store to the miners. It's a meta way to get into the mining industry!

8/12/21 $$ ASX:NRW NRW (721m)- PE 13; PB 1.3; PEG 0.6; 16% debt:equity; insider buying around market price; Similar to MYE. Company that supplies the construction and mining industry.

8/12/21 $$ ASX:ADH Adairs (610m) - zero debt; PE 9.6(!); PEG 1; PB 3.7; DIV 6.44; Furniture shop. Solid fundamentals. Very reminescent of HVN and SSG back in 2018. With the CV19 crisis coming to an end, consumers should be back in stores. I see them doing ok in the medium term.

8/12/21 $$ ASX:NGI Navigator Global industries (336m) - zero debt; PE 8.9; PEG 1.6; PB 0.6(!); DIV 8.1(!) - They manage US36b of assets. I've never been a fan of hedge funds and index fund investing... but what about owning part of a hedge fund? This is to diversify from other recent purchases, and this company has really solid fundamentals and seems well priced, with some insider buying to boot. 

LEGEND:

^ sold - at profit, with capital redeployed.
* sold - at loss, covers cap gain tax.
$, $$, $$$ (Small / Medium / Large) investments.

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CURRENT INVESTMENT STRATEGY

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2022 Investment strategy:

• Cannot get greedy in 2022. It's a high risk investing environment at the moment. Market is currently at a high point recovering from lows from CV19. Crash is possible. Lots of bubbles with high priced companies not really earning anything. Durability and ability to survive a recession is key.
• Investing is still a good idea as low interest rates means that money is becoming more worthless (Every US dollar in existence dropped in value by about 6 percent in 2021)
• Good news is that the gamblers seem to be throwing money at speculative stocks of companies that have never earnt a dime - which means that there are some small/mid cap stocks not getting much attention.
• It's time to focus on the boring side of the market. Anecdotally, my most solid picks of durable companies (KGN, SSG, MXI, NTD, HVN) weathered the last dip (CV19) and came out stronger - despite investing at a market high point before the pandemic.
• Investment Criteria:
• low/zero debt. positive cash flow.
• quality earnings with PE < 15
• Undervalued (DCF) by more than 30%.
• TL;DR - Buffet style "fair company at a wonderful price".
• As usual, reasonable diversification between industries.

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PORTFOLIO SNAPSHOT

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