And just like that the last quarter of 2017, and the year, has finished. What a great year it was as 2k Hedge Fund wrapped up the first year of existence! First off let me start by saying thank you to all the people that have taken the time to follow along and read as I post my thoughts about the market and the stocks that I love. It has been an amazing ride thus far and I am looking forward to beginning 2018!
THE FUND REVIEW
The dividend fund had great success in its 1st year of being, right along with the entire stock market. Now I am not going to get cocky because I was still behind the overall S&P in terms of percentage gains which means that I would have actually made a few points more in an index fund. But where's the fun in that right?
Anyways here is what we looked like at the end of year one:
As you can see overall I did solid in picking undervalued winners that continued to ride as the market chugged along the entire year.
The fund produced a nice 16.7% gain for the year, as compared to the S&P 500's 20.49%. That is a crazy development for the market and honestly I have to say that I feel great about my gains since I was continually adding money (read lowering total percentage) and also only sold out of 4 holdings! This was a primarily passive gain picking individual companies!
Another thing that I love about the current state of my portfolio is that even with the large percentage gain I still sit at a yield of 4.5%. This is about two times the current yield of the S&P and really gets me excited about the passive income that I am creating. This will really help in the long run and hopefully I will be able to continue these yields in the future.
It is always funny to see what the end of the year winners are as the markets do their shifts from one sector to another and, to be honest, I didn't quite predict that my best returns would come from the end of year winners.
To close out 2017 I ended up with 3 positions that netted an over 35% gain! This is astounding especially as the three are from completely different industries. The three major victors came from Consumer Goods, Basic Materials, and Financial. Who were these three? V.F. Corporation (VFC), Valero Energy Corporation (VLO), and Xinyaun Real Estate Co., Ltd..
Now don't get me wrong, I thought (and spoke freely about) all of these companies were severely undervalued when I purchased them, but for a ~40% gain in all three to end 2017? No chance!
To be honest I really didn't end up with any big losers to end 2017 but did have 2 positions in the red, Big Five Sporting Goods Corporation (BGFV) and China Mobile Limited (CHL). BGFV at one point was down about 50% from my original purchase price (mistake of timing) but I added and it recovered to only a single digit loss. CHL has declined about the same percentage since I purchased but I still believe both are undervalued and honestly may look to add again in the near future.
Another point to make is about the Nokia Corporation (NOK). At one point in 2017 I was up over 50% on my NOK position. Instead of selling a portion of this and waiting for a drop to add I continued to hold and ended up with a gain of just under 10%. This was a big hit to the portfolio and actually could have put me close to that 20% YTD mark but you live and learn.
REVIEW OF 2017 GOALS
If you remember way back at the beginning of 2017 I set three goals for myself by the end of the year:
- Have a total portfolio value of $12,000
- Have a total gain of 10% or higher
- Total Estimated Yearly Dividend Income of at least $450
Well I crushed all of those goals! I am not going to lie, I did set pretty conservative goals going into 2017 but it still feels great to accomplish all three of them!
So I have been doing a lot of thought in this and I have set 3 new goals for the portfolio and another two for the actual 2khedgefund.com website.
- Total portfolio value of $30,000
- Have 2018 gain of 10% or higher
- Total Estimated Yearly Dividend Income of $1350
These goals are a bit more aggressive and the 10% gain is really going to be set in stone for the foreseeable future. The total value means that I will need to save a bit more, but I have sat down and constructed a budget that should be able to make it happen.
- Create a webapp version of the D30 evaluation
- Post 3x per week
I am currently working with a web developer, trying to make a web application of the D30 evaluation that everyone can use (and update on a quarterly basis). I believe in this method and want it to be available for everyone.
Second, I am going to work hard to post three times per week and keep pumping out information about the market. I have been getting great feedback from a many number of you and look forward to keeping it up.
actually wrapping up
2017 was an amazing year and I have learned a lot about not only about the market but also about web development, blogging, and social media. I hope to continue my success this next year but I am going into it cautiously and carefully.
As always leave any comments below!