Update on my portfolio selected using Graham’s techniques

On 5 December 2008, I selected a portfolio of 11 stocks using techniques detailed by Benjamin Graham in his book The Intelligent Investor (see the original post here).

The initial portfolio value was $1 million with approximately $90,909 invested in 11 companies as follows:

Company	Buy Price	No. of shares	5-Dec-08 Value	2-Jan-09 Value
Caltex	$6.18	14,710	$90,908	$106,206
Harvey Norman	$2.35	38,685	$90,910	$102,515
Soul Pattinson	$8.33	10,913	$90,905	$100,400
Sims Metal	$11.74	7,744	$90,915	$137,611
Flight Centre	$8.30	10,953	$90,910	$95,072
Hills Industries	$2.90	31,348	$90,909	$95,925
Beach Petroleum	$0.75	122,026	$91,520	$114,094
ASX	$31.60	2,877	$90,913	$95,027
Austereo	$1.11	82,271	$91,321	$102,016
WA Newspapers	$4.70	19,342	$90,907	$104,253
Milton Corporation	$14.02	6,484	$90,906	$93,953
Total			$1,001,024	$1,147,072

As can be seen above, as at 2 January 2009 this portfolio had appreciated by 14.6% to $1,147,072. The All Ordinaries Index had appreciated by 6.7% over the same period. So I’m well ahead of the index (for the time being anyway!).

I noted in my original post that ASX, Austereo, WA Newspapers and Milton Corporation were not selected using Graham’s methods – most of those companies are much more to Warren Buffett’s tastes than Benjamin Graham’s. However, I do have confidence in those companies at the prices that were paid above.

It’s pleasing to see a fairly even contribution by most of the companies. The return was not achieved by one company increasing very significantly in value. Sims Metal (up 51.4%) and Beach Petroleum (up 24.7%) were the stand outs but very good contributions were also made by Caltex, Harvey Norman, Soul Pattinson, WA Newspapers and Austereo. In fact, every company had a market value of more than the purchase price.

But let’s not get carried away, this is only one month’s performance and while it is exceptionally good, it doesn’t mean very much. I will keep holding this portfolio and see how it goes. I’m a longer term investor and am happy to ride the ups and downs as long as I have confidence in the underlying values.

Note: None of the above constitutes financial advice. You need to do your own research and consult appropriately qualified people for advice (where necessary).