My Return for 2023

Each year, as you follow the financial press, you learn of different clever ways to create juicy returns for different investments.  For example, you will hear that the NASDAQ dropped by 32% last year.  It is a collection of stocks of companies primarily in the Technology area.  Ouch, you think, that would stink.

You will hear that the Toronto Exchange was up 8.12% while the American DOW was up 13.77%.  Gold, something I’ll discuss in a future newsletter, was up just under 14% in 2023.

Your brain is probably telling you to make decisions on these recent returns. You don’t want to own any technology stocks, but on the other hand, gold and most other companies look good.

Basing any decisions on recent past performances can be a significant mistake.  As a reader of this newsletter, you know I focus on businesses traded on public exchanges.  I invest in companies, not stock markets or stock prices.

When I look at my performance, my portfolio consists of just ERE.UN, SOT.UN, BTB.UN all real estate REITS, Bank of Nova Scotia and a small holding in Vital Hub lost 6.2% in 2023.  I just purchased a few shares back into Reliq Healthcare as it stinkbombed down to .23 a share.  I expected that my chances of a full loss were 50/50 at that price, so I took a small flyer.

What do I compare that to?  Well, nothing.  It doesn’t matter to me, so I don’t compare or care how things are going after one year.  It’s a 10-20-year process of being a value investor and investing like a honeybee. 

I understand if you feel a loss of 6.2% is a failure.  But for me, it is not.  I continually bought ERE.un as the price dropped to $2.16 and added to my holdings.  When VHI increased by 25% shortly after I purchased it, I harvested some profits but continued to hold a significant number of shares.

Yearly changes do not matter for several essential reasons.

1. If the underlying business and climate remain the same, I buy more of that great-value stock when prices drop because of other market forces.

2. When prices increase to what I think the company's value is, I harvest money but maintain a holding until the prices become outrageously high.  I then sell and wait for other opportunities to buy when prices come back down. I harvested some Vital Hub profits recently.

3. Long-term averages in something like gold do matter.  Over some 100 years, the price of gold has gone up 7.78% each year.  Some years it goes up, others down, it doesn’t matter.  I like having some as a security blanket against inflation and world problems.

4. I continue to collect dividends on most of my stocks regardless of what happens to the base price.  Cash flow is a great thing.

 There are all kinds of ways to make anything look like a win.  My 6.2% loss looks excellent compared to the 32% loss in tech stocks, the 9.89% loss for the BMO ETF for REITS, or the 6.23% loss in the BMO ETF Bank index.  But none of those matters.  I only do the comparisons in this newsletter because, in January, it’s usually the topic of most investing conversations.  Please ignore it.  Keep your head down and invest.

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