Eleven Month Update of MBP
Up 13.75% in the last eleven months
*Link to the spreadsheet for anyone interested in how we calculate returns
This is the eleven-month update of the Market Brothers Portfolio, or MBP. It is a mock portfolio of our favorite investing ideas. Since it began in November 2018, the MBP is up 13.75% vs. the S&P 500’s 12.69%. All prior monthly updates can be found here.
Not a great month for us. We are still outperforming the S&P 500, which is our goal, but not as much as prior periods (you can see that visually in the chart above). We invest for the long-term and are still confident in the businesses we own, but the returns haven’t shown up in the public markets lately.
If you’ve read our previous updates (and if you have not, I’d recommend checking them out here) you know that beating the market for nine months is not our goal. Our goal for the MBP is to show that spending 1-2 hours with one “trading” day a month can outperform heavily managed funds.
Here are the rules we have set to try and mimic a real portfolio as closely as possible:
We can only change our asset allocation on the 20th (or around then) of each month. All other days are off-limits, meaning we can only add or subtract from our allocation once a month. (We’re not the day trading type anyways, so this should not affect our investing philosophy).
No derivative securities (options or futures).
We are not reinvesting dividends, for calculation purposes. Although we highly recommend that you do so in a real scenario.
We cannot incorporate any commission fees so we will act like we are investing through Robinhood
We are competing against the S&P 500 so the benchmark for the portfolio will be how much it has beat or lagged the market since its inception.
Shares Held 9/20 – 10/19/19
*Including Dividends
**Not time-weighted. From the initial purchase price.
Top Performer
Nvidia: Shares of the semiconductor and GPU maker shot-up this month, for reasons unknown to us. However, it did give us an opportunity to sell our shares, as we aren’t bullish on the stock for the long-term.
Worst Performer
Spotify: The audio streamer had a rough month, and is still down from its IPO two years ago. We are very confident in this company and think they can be the leader in the audio market over the next ten years, but the public markets do not agree with us at the moment.
Dividends Paid
Buying and Selling
Spotify: As we mentioned above, Spotify is one of our favorite stocks. And with the price being discounted by a fair amount, we thought it would be opportunistic to pick up some shares.
Axon Enterprises: With little competition in a non-cyclical market, Axon is setting itself up to be the leader in law enforcement software and technology. It still only makes up 3% of the portfolio, but we could see it being one of our largest positions in a few years.
Yext: Our latest addition to the MBP. Yext helps businesses organize their information across all types of digital platforms (Google, Amazon, etc.). They have little competition, high margins, and provide a lot of value to customers.
Target: This is one of our short-term value plays. With the stock up over 80% from when we bought it, and the earnings multiple back in the ’20s, we decided to trim some of our position.
Nvidia: Like we mentioned above, are thoughts on Nvidia can be summed up to “eh.” It is a quality company, but not our favorite. So why would we own it?
Allocation for Next Month
See you in a month,
Brett and Ryan