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The $1000 Portfolio Turn of Events


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Written by

Jae Jun

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What You’ll Learn

  • Update on the positions and current performance
  • What’s been going on with the portfolio in early 2018
  • A change of events in the portfolio

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6 months into the INVEST1000 portfolio, we have some big changes.

First, a quick overview for the folks who joined the blog recently.

The goal of this portfolio is very simple. Invest and grow $1,000 using the OSV Action Scores to quickly filter and select fundamentally sound companies.

Lester is the owner of the portfolio and for a detailed look at how this case study came about, click through the following links.

  1. Intro to INVEST1000 and Lester’s $1000
  2. Episode 1: How to Pick Stocks with $1000
  3. Episode 2: INVEST1000: This is the $1000 Portfolio

Lester is also not the typical value investor. His forte is in technical analysis and he is new to value investing and fundamental stock analysis. He is smart in that he has a game plan and is focused on utilizing his strengths in technical analysis as opposed to trying to learn everything about accounting, fundamental analysis and stock valuation. Put simply, he leverages Old School Value to do the value investing work for him.

With the portfolio having started mid last year, his portfolio ended 2017 looking like this.

Lester's Invest 1000 6 Month Portfolio

Lester’s Invest 1000 6 Month Portfolio

Small caps and value stocks did not do well last year. To see his portfolio stay ahead of both the Russell 2000 and S&P is an impressive start.

The INVEST1000 portfolio returned 14.1% vs the S&P’s 13.4% and Russell2K’s 10%.

Enter 2018

2018 started the way 2017 ended. Up close to 10% before we that speed hump in the road at the end of January and early February.

Lester shot me an email with the following update on his take on portfolio management during this period.

Learned a few gems in this market “correction”:

  1. Using a brokerage without advanced trading orders stink.  Happy I did it with a small amount of capital.  Side note: Robin Hood improved their order types, so now I can finally place stop loss and target profits.  I was going to move to Interactive Brokers, if they didn’t implement this.  
  2. Starting to expand into the API/Algo for stocks now.  Thank you so much for doing OSV.  I would have never would have learned so much so fast without you.  I’m mainly staying with Robin Hood due to the commission free trading and advanced order types.  Will move to Interactive once I see if it is easier to do algo trading on Robin Hood or Interactive Brokers. 
As for the Invest1000 portfolio itself, I did not place any advanced order types, since I was not aware of it until today.  So, I’m going to close all open trades due to the continuous lowering of prices and reenter once things start looking better with stop losses based on technical analysis.  The portfolio is ending roughly 2.1%+, since inception.  

The “close all open trades” isn’t quite correct because what Lester really meant was to do a rebalance by selling off stocks that didn’t look good from his techincal metrics and going with better ideas. With many stocks taking a breather during the correction, it’s not a bad idea.

Here’s the last snapshot I have.

INVEST1000 Going Through Rebalancing

INVEST1000 Going Through Rebalancing

Once Lester updates the latest transactions, the blue line in the red box will be different. One thing of concern is that by selling at the bottom, Lester’s INVEST1000 portfolio will likely be lagging as it did not participate in the recovery.

Portfolio Snapshot

Although Lester is using technicals, he is not overly trading.

The current “total portfolio value” is low because of the recent sell transactions. The new buys have not been updated yet.

By using Robin Hood, the INVEST1000 fee is currently at 0%. If you have a smaller portfolio and don’t mind entering orders from your phone, Robin Hood seems like a very good platform. Remember Zecco? They were a free trading platform that eventually raised commissions to $4.95 and got bought out by tradeking. Hopefully, Robin Hood will be around longer than Zecco.

Coming Up

In the next update, we’ll take a look at the new holdings for INVEST1000 and get some input from Lester on what he is looking at to pick stocks.

What is Old School Value?

Old School Value is a suite of value investing tools designed to fatten your portfolio by identifying what stocks to buy and sell.

It is a stock grader, value screener, and valuation tools for the busy investor designed to help you pick stocks 4x faster.

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