Episode 547:

Starts around the 2 minute mark.

  • Someone asked again to see TK’s historical returns 
Year Return
FY03 10%
FY04 98%
FY05 35%
FY06 38.4%
FY07 41.4%
FY08 -19.9%
FY09 -31%
FY10 115%
FY11 32%
FY12 0.8%
FY13 39%
FY14 6.5%
FY15 6.6%
FY16 14.3%
FY17 12.4%
FY18 1.2%
FY19 -10%
FY20 14.2%
FY21 19.4%
FY22 -15.9%
FY23 -15%

From Episode 442:

Tony [00:50:35] Yeah, short answer is I don’t, and it’s a little difficult because things will happen at different time periods. So the 3PTL came in after the GFC as a way of trying to prevent my portfolio from taking that kind of hit again, and checklist came a bit later. I think I’ve be doing a checklist formally for about seven years now, maybe eight years. Came out after – I started using it after the book about checklists – “The Checklist Manifesto” was published and then price to operating cash flow got elevated in its prominence, you know, at a different time. So it’s pretty hard to work out. I haven’t kept a date when all those things happen, but all I did do to try and answer this question was I went and looked at performance pre-GFC and post-GFC. And even that’s not going to be a good test because they’re different time periods. So pre-GFC. I had been investing for about eight years and the GFC lasted for a couple of years. And then what’s it about? It’s been about 14 years, 13, 14 years since the GFC, so they’re not the same time period. And but interestingly enough, if I use the pre-GFC/post-GFC analysis, The All Ords had similar returns during those those two time periods. So pre-GFC for the time I was investing those eight years, the All Ords returned 8.6%, post-GFC 8.3%. So I’m not including the GFC years in that analysis, so it’s pre-GFC/post-GFC.

Cameron [00:52:05] What’s post-GFC? When does that start?

Tony [00:52:08] It would be starting in 2008? Probably. I think from memory.

Cameron [00:52:12] That’s when the GFC started.

Tony [00:52:13] GFC, started GFC started late 2007, went through 2008. And so it was March 2009 when everything started to take off. So yeah, I back a little bit before that, which was kind of rock bottom for me. And that’s part of this analysis. The start that you use is really important, right? Because if you use a low base, it looks better. If you use a higher base, it looks worse. But anyway, as much as I can, I can sort of dissect this with a sledgehammer. Pre-GFC, I was getting about 16% per annum post-GFC 24% per annum. Oh, but again, that’s from the lows of the GFC. When I saw those numbers, my first thought was “Okay, well, if you use the GFC post-GFC – everything’s been recovering, including the share market. But if I looked at the all ords, it was pretty similar in its return, both pre-GFC and post-GFC.” I think there’s enough there to say it’s improved. Those numbers can be manipulated. I think a couple of things to say about that analysis in the pre-GFC days. I mean, for the really early years, in the pre-GFC days they would look nothing like QAV does now. So it was in the first year or so it was just, you know, taking stock tips and making all the mistakes. Then it became a value. I became a value investor. But, you know, I didn’t really systematize things. I was basically, you know, looking at what was then called Huntleys’ Newsletters and now called Your Money Weekly. So the Morningstar Newsletter, I was looking at the stocks that will be reported each month as being as part of the Wilson Asset Management portfolios, looking at star stocks in Stock Doctor. And sort of picking stocks out of those that look like they might be on the cheap, undervalued basis, using probably more p than anything, but some of the things in there and then making investments. So it was really early days in the value investing January’s post-GFC a lot more systematic than pre-GFC. And that sort of thinking and systematizing of things led to priced operating cash flow being important. The check was being important, 3PTL being important. So it kind of evolved in that time.

Cameron [00:54:15] So when we quote your performance of your investing period career in 25, whatever years and we say 19.5%, that’s including the years when you didn’t know what you were doing, and it’s including the GFC crash when you didn’t have 3PTL sells as a stop loss to get you out.

Tony [00:54:36] Yep.

Cameron [00:54:36] So I just twigged that we’re kind of marketing that as almost like that’s the result that QAV has returned you over twenty eight years, whatever. But if you’d actually been doing QAV as it is now, over that twenty eight years, it would probably be a lot higher.

Tony [00:54:52] Yeah. So I just did the post-GFC number of 24% there, but that doesn’t include the GFC, which would lower it. So I’m kind of happy with 19.5% / 20%.

Cameron [00:55:01] Yeah. But if you had your 3PTL rules in place during the GFC, you would have got out a lot earlier and got back in and so would have been a lot better. Oh man, yeah, we’re underselling this thing.

Tony [00:55:15] Well, yeah, yeah, possibly. But.

Cameron [00:55:18] No, we should break that down. Like, I think that’s important. Like nineteen and a half over twenty five plus years is a nice thing to say, but I think we should break it down. If you have the opportunity to go well, you know this was your return up to this point. Then you introduced the checklist and the 3PTL and this kind of stuff. This has been your return since doing that, and we can break it down into two different time periods. So I think that’s a more accurate reflection of the QAV sorts of returns.

Tony [00:55:47] Yeah, it is. But you know, it’s also during a period when the market’s been going up. So there’s also that to take into account, but we can go back to the All Ords. I did go when we started this two years ago. I did go back and look at 10 years worth of data and it came out at around at 19.5%. So again, that’s different to post-GFC, which is, you know, 12, 14 years worth of data. And I also for that analysis I just read out there used didn’t use my overall performance because there’s lots of ins and outs, particularly in the last two years, but also in the very early days when I was just basically using my bank account, which was also being used to pay bills from and all that kind of stuff as well. So that’s…