Amateurinvestor beats S & P by 21% in 2018.

I must first apologize for letting my blog writing lapse earlier this year. I was preoccupied by some personal affairs.  I thank you for your continued support.

My portfolio total return performance beat the broad market index as of 12-31-2018 as follows:

Amateurinvestor 1 yr: 16.7%, 3 yr.: 19.1%, 5 yr: 19.2%, 10 yr: 22.6%

S & P: 1 yr – 4.38%, 3 yr: 9.2%, 5 yr: 8.49%, 10 yr: 13.12%

Amateurinvestor  outperformance relative to S & P:

1 yr: 21.08%, 3 yr: 9.9%, 5 yr: 10.71%, 10 yr: 9.48%

That is, my performance is more than double that of S&P for 1, 3 and 5 years, and handily beat it for 10 years.

As for portfolio holdings, I was compelled  to distribute some of the portfolio during the year.

I reduced holdings of CNI to a token amount. Canadian National Railroad, while a solid business with a sustainable competitive advantage, simply does not have the growth rate comparable to the other stars, MSFT, ADBE and VISA, primarily because its market is not growing at the same rate. I kept a token amount because it is a solid business with inimitable competitive advantage, with the thought that in future I will invest in this only when the stock is truly depressed.  I realize that would not be rational if the growth rate of the others continues to exceed.

The businesses of Visa, Microsoft and Adobe remain strong with bright futures. It is a testimony to the design of my portfolio, which is built exclusively with companies which possess an unassailable competitive advantage, that even while too preoccupied with personal matters to keep completely up to date on company news, and minimal trading, I still outperformed the broad market  index, while thousands of professional money managers and traders labored furiously to achieve a worse outcome.

Briefly, as businesses digitize their marketing information and creative content and related analytics, Adobe will continue to thrive as it has dominance in these areas.  As businesses move their information to the cloud, Microsoft will continue to be essential to business on this planet.  Even if there is a slowdown in spending, the market for visa will grow as the cash economy is progressively digitized.  None of these businesses will be fundamentally hurt by a slowdown in global growth, should this occur.

I look forward to this year with renewed energy and spirits.

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