Well, since it’s the last day of the financial year I thought I might take a quick look at how I did. As you can see below, my money weighted return for FY 2020 was about 28%.
While this was an acceptable result relative to the market, I really dropped the ball in a number of ways. My worst mistake was to sell Pushpay too early. It’s a good business model and suffice it to say this atheist lacked faith.
On top of that, I also sold out of Temple and Webster (ASX: TPW) way too early, despite events pretty much flowing exactly as I had expected. It’s a real pity, as a longer hold there would have made a big difference, too.
The lesson I learnt on these two stocks was that anything that replaces enhances social distancing will actually do quite well, at least in the early stages of a recession. There’s no need to overthink it and if a thesis is working I should sell gradually rather than suddenly.
That’s a simple lesson, but it definitely yields me better results. For example, I sold a massively overvalued stock called Novita Healthcare (ASX: NHL), now Tali Digital (ASX: TD1) quite slowly, even though I thought it was too expensive. As a result, I received a much higher average price than I otherwise would have. I usually sell too early when a stock is still going up, so I should at the very least sell more slowly.
May I remember this lesson well.
For the sake of interest, I’ll also review my biggest winners and biggest losers, (based on both absolute and percentage gain) below:
Biggest Absolute Losers Of FY 2020
- Audinate (ASX: AD8) – blindsided by a virus which will prevent large gatherings. I own a tiny position, having sold down.
- Vista Group (ASX: VGL) – failed to see their investment cycle (rebuilding software to transition to cloud). I do not own.
- Easton (ASX: EAS) – just a large position that has not recovered from Covid related falls. I still own.
Biggest Percentage Losers Of FY 2020
- Connexion Telematics (ASX: CXZ) a tiny position I capitulated on near the lows
- Rectifier (ASX: RFT) a small position in a very decent company that I bailed on near the lows.
- Gentrack (ASX: GTK) a genuine thesis blow up — sales growth has stalled suggesting they may not be competing effectively.
Biggest Absolute Winners Of FY 2020
- Energy One (ASX: EOL), a small software company covered here.
- Pro Medicus (ASX: PME) a world beating software company covered here.
- Tali Digital (ASX: TD1) a short term trade based on a view that the company would get hyped up, which it was — intention to sell broadcast here (to supporters).
Biggest Percentage Winners Of FY 2020
- Tali Digital (ASX: TD1)
- Energy One (ASX: EOL)
- Alcidion (ASX: ALC) another small software stock gaining traction with its products.
As always, Supporters can see my full portfolio here.
Of the companies mentioned above, I currently own EOL, ALC, PME, AD8 and EAS.
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