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This the editorial of our monthly Shareholder Yield Letter published on 2024-02-13. Sign up here to get it in your inbox the first Tuesday of every month.

More information about the newsletter can be found here: The best large cap investment strategy ever


This month you can read what separates good from great investors.

But first the portfolio changes.


Portfolio Changes

Buy Three – Sell One

Three new recommendations this month as the MSCI World index is above its 200-day simple moving average.

The first is a $50 billion US-based pharmaceutical company with a shareholder yield of 6.7%. Over the past 12-months it has bought back 2.2% of its shares and paid a dividend of 4.6%.

The second is a $42 billion US-based telecommunications and media company with a shareholder yield of 9.3%. It made share buybacks of 6.5% and paid a dividend of 2.7%.

The third and last recommendation is a fast-growing GBP 1.4 billion UK-based facilities management and transformation company with a shareholder yield of 5.9%, made up with share buybacks of 3.0%, and a dividend yield of 2.9%.


Stop Loss – Sell

Sell Marathon Oil Corporation at a profit of 1.7%.



What separates good from great investors

When thinking of how to convince you that it is not the best investment strategy that will give you the best returns (it must of course be one of the great time-tested strategies) but the way you implement it.

At the same time I read a great article Strategy vs logistics by Joachim Klement that it explains it perfectly. (His newsletter Klement on Investing is well worth signing up for!)


You can read the whole article (at the above link), below is an extract with my comments.

I am a fan of history and if you dabble in military history for long enough you may come across a quote attributed to General Omar Bradley:
                   “Amateurs talk strategy, professionals talk logistics”.


Great investors think logistics

If you think about it, investing is very easy. You buy undervalued good companies, wait for them to go up and then sell them for a profit. If they do not go up or fall you sell them. (This is an amateur talking strategy)

You know the BIG problem in following the above steps is emotions, and STRONG emotions when it comes to losses!

So, if you are going to be successful you must find a way to manage your emotions so that you can stick to your investment plan. (This is a professional talking logistics.)


Logistics let you stick to a great strategy

In the investment world, it is a common complaint that people don’t talk about strategy and strategic asset allocation enough, which is true, but it is also an unfortunate reality that too often little to no thought is given to the logistics needed to sustain a strategy over time.
In my career, I had to learn the hard way that one needs to have the logistics in place to sustain a strategy. When I was advising private clients that meant having enough liquidity at hand to ensure the client could cover her cash flow needs for the next three to five years without having to touch their equity portfolio.


Three years of cash

Three years’ worth of cash was one of the main things I implemented when I started advising my parents on how to invest in retirement.


You must have a cushion

The idea was to have a cushion and not need to sell stocks should there be a correction.

In good years the cushion is topped up, so they always have three years of cash to sit out a market correction.

I do the same with my financial planning. I keep less cash as I still have income but I make sure I have enough cash (and NO leverage) so I can sit out a market correction without being forced to sell. 


How to put good logistics in place

When I was managing equity portfolios for institutions, I introduced stop losses and other risk management techniques even in value portfolios.
Why? Because this way I could make sure underperformance wasn’t going to last many quarters in a row. This way, my investors didn’t have to suffer through several quarters of reporting discussion and explanations of why I underperformed.
This obviously meant giving up some upside in cheap stocks in the short run, which is why I complimented my stop losses with re-entry triggers based on the price momentum of these stocks, so I would buy cheap stocks again, once they showed signs of a sustained recovery.
All of that is to ensure I have enough logistics in place to help my investors through a soft patch of extended underperformance.
Throughout much of my career, I was guilty of being in love with strategy and thinking constantly about it. Over time, I have learned to love the seemingly mundane tasks of logistics.
The term logistics is more like a metaphor.
What I mean are techniques that help you not run out of money, like stop losses or ways to frame your investments so you are not scared when they do something different than expected.
Or ring fencing your play money from your long-term investments in a separate portfolio, so you don’t change your strategy to save your play money. The possibilities are many.


You know, this is exactly what we do with the newsletter.

We have a strict trailing stop loss system, and we stop buying when markets are falling and only start buying when they are moving up again.


Only get in if you know you can get out

I'm sure you have experienced it too; it is a lot easier to buy a stock if you know you can get out with a small loss should things go wrong. This is important as it lets you act even if you are uncomfortable, because you have the right logistics in place!


Your analyst wishing you profitable investing!


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