42% Return on these 3 Stocks

The performance of any fund during the past 3 or 6 months is commonly touted amongst managers.

The return of the Canadian Index for this year so far is 5.25%, and for the past 12 months, it's 11.2%. It’s frankly a useless statistic. The past has nothing to do with the future, and in the next six months, the markets could be down 50% or more.

I bring up my 6-month return to do an exercise to make sure I continue to realize it’s a useless statistic. What was your impulse when you saw the headline? Get the names of the three companies that gave me that return and start buying. That would likely be a mistake.

After doing my research, I invested in 3 companies, all three discussed in previous newsletters.

They are:

1. BTB.UN is up 1.5%. It’s an industrial and office REIT that owns Real Estate primarily in Quebec.

2. Slate Office has increased 2% since I purchased it. It is in trouble with debt payments, but I think it sells for about 10 cents on the dollar or at a 90% discount.

3. Vital Hub is up 62%. It owns several companies that provide software solutions to hospitals and the healthcare industry. It generates a significant profit from royalties on that software.

These companies are owned in my TFSA. In Canada, we can invest in this registered account, which is tax-free when the monies are withdrawn. You can withdraw the money for any reason, but in my case, it’s for retirement.

You may argue that it is extremely risky to have three stocks in the entire portfolio. Perhaps that is the case, but in this week’s podcast, I discuss my strategy in more detail. As you can see, one stock alone contributed to this return. That is a more common occurrence than you think. 

Overall, the portfolio's return year to date is 14% in all accounts, with stocks such as Medical Facilities (down 7%), European Residential REIT (down 7.5%), and a few shares of Reliq Health (down 13% and likely going to Zero). On weakness, I continued to wade in and purchase the first two stocks.

The point of all of this is to realize that fluctuations over 3, 6, or 12 months are meaningless. I write this without emotion as I don’t really care about the gains or the losses.

Only the long-term matters. What will it look like five or ten years from now?