This article is a website version of our weekly FREE Best Ideas Newsletter sent on 23.01.2023. Sign up here to get it in your inbox every Tuesday.
Last year turned out to be surprisingly good year if you think of wars and high interest rates.
Best performance according to JP Morgan was the S&P 500 with a return of +26.3%, next developed markets excl. USA and Canada +18.9% then US small cap equities +16.9%.
The worst performing was commodities at -7.9%. Second worst was US 1–3-month Treasury Bills +5.1%.
Quite respectable I am sure you will agree.
How did your portfolio perform? Were you happy with this performance and how do you feel about investing this year?
What about 2024
This is all very interesting but what does this mean for 2024!
Were where should I invest?
That's the $1m question that no one can answer, not even the clever sounding analysts. The thing is she has no better idea than you have!
Think about it, if the forecasters were right even once, they can put on such a leveraged position that they can retire the following year.
But they are still working for that investment company and making a new forecast next year.
Here is an idea for 2024…
Japan looks very attractive
I have been positive on Japan so long you probably don’t want to hear it anymore.
So here is GMO saying despite the good performance last year Japanese companies are likely to have a +12% return this year.
This is based on:
- +4% investment return
- +4% increased from small company outperformance
- +4% gain from the weak yen appreciating
We keep on finding attractive ideas there. Here are three examples from the last newsletter:
An owner and operator of 24-hour fitness clubs trading at Price to Earnings ratio of 9.0, Price to Free Cash Flow of 6.0, EV to EBIT of 3.7, EV to Free Cash Flow of 4.1, Price to Book of 1.6 and it pays a dividend of 2.3%.
A manufacturer of textiles and chemicals trading at Price to Earnings ratio of 11.6, Price to Free Cash Flow of 9.3, EV to EBIT of 6.3, EV to Free Cash Flow of 9.7, Price to Book of 0.5 with a dividend yield of 2.4%.
A manufacturer of sensors. It is trading at a Price to Earnings ratio of 9.3, Price to Free Cash Flow of 8.1, EV to EBIT of 4.0, EV to Free Cash Flow of 5.6, Price to Book of 1.0 and pays a dividend of 1.1%.
Here is my best advice on how to be successful every year…
Good investment system
For investment success this year and for the rest of your life you must have a good investment system.
A good system consists of a time-tested investment strategy that fits your nature so you can stick with through good and bad years.
You must also have clear rules on:
- When you will buy
- When you will sell
- How are you going to stay diversified (country, industry sector, currency)
- How are you going to keep losses low so that you can stick to your strategy
Here are three articles to help you:
- How to find your best investment strategy – not the one you expect
- How to get started with Quant Investing
- How we select ideas for the newsletter – Look at the flow charts at the bottom of the page
Investing is not hard
Investing may sound hard and complex, but in the end it all comes down to the above few steps.
That is all for this week.
Quant Value newsletter update
The run up in the markets last year increased the newsletter’s performance very nicely. Here are a few best examples from the current portfolios:
- North America: Celestica +182.5% since May 2023
- Europe: Höegh Autoliners +69.1% also since May 2023
- Asia: SK-Electronics Co. +155.5% since March 2023
Looking at all the ideas currently in the portfolios here are the average returns subscribers have in their portfolios:
- North America +44% across 7 companies
- Europe +18% across 14 companies
- Asia +29% across 30 companies
- Crash portfolio (2022) +49% across the remaining 4 companies
If these ideas sound interesting, you can find more information here: Your Treasure Map to Europe, Asia, and North America's Hidden Gems!
Shareholder Yield Letter update
Performance was dragged down at the end of 2023 because of the large energy part of the portfolio. Average performance since May 2023 has been +2.1% across 34 ideas.
This is nothing to get excited about, but we are very positive as 2023 results and dividends will be announces over the next two months, increasing performance.
As things stand today the portfolio has an average historical dividend yield of 5.5% and bought back 4.4% of their stock last year. This gives you an average Shareholder Yield of 9.9%!
If this sounds like the kind of companies, you would like to invest in you can find more information here: Invest big, win bigger with our market beating large-cap strategy!
Your, helping you get the highest returns in 2024 analyst
PS To find great companies that exactly meet your investment strategy right now click here.
PPS It is so easy to forget, why not sign up now before you get distracted?
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