Q1 2011 Portfolio Performance Review

Posted April 3rd, 2011. Filed under Holdings Stock Updates

After a steady decline from mid-February, the S&P bottomed out on March 16 – roughly break-even for the year at that point – before rallying strongly to close out the first quarter of 2011 up 5.9%.

The ValueUncovered model portfolio has continued to fare well, outperforming the S&P by 5.53% since inception.

Value Uncovered Model Portfolio - Q1 2011 Performance Review

While I am pleased with this performance, it is becoming harder to track this model portfolio – see additional thoughts below.


I’ve updated the Holdings page to reflect the current positions and prices as of March 31, 2011. The portfolio currently holdings 12 standard positions, along with 2 work-outs (TNFG, NEXC).

Nine out of the twelve long positions are currently in positive territory, but only seven of those nine are outperforming the S&P.

Interestingly enough, the laggards in the portfolio are primarily my oldest positions, going back to late 2009 and early 2010.

My investment philosophy has changed a great deal since starting this blog, and hopefully my analytical skills and business sense have improved as well, reflecting in the better performance for newer positions.

(That’s what’s I tell myself at least, even though it’s probably just random!)


New Frontier Media (NOOF) is currently the biggest loser in the portfolio, down 12.81%, although the price is up slightly since 12/31.

NOOF reported a significant revenue increase in the fiscal third quarter, and should benefit from an upcoming office move and equipment investment.

Not to be outdone, APT fell sharply during the quarter after reporting an 85% decrease in annual earnings. I knew the company would be facing difficult QoQ comparables as it made the transition to the lower-margin building supply segment, but the market reacted more strongly than I thought to the news.

APT’s balance sheet remains strong.

In January, NEXC surprisingly reported a substantial restatement of its estimated liquidation distribution, from the initial $0.12 – $0.16 per share to no more than $0.09 per share.

I am shocked by the news, as I thought that incentive arrangement would be a catalyst for the company to rapidly and efficiently wind down operations.

This was my first liquidation work-out, and it doesn’t appear like it’s going to work out very well.


Access Plans (APNC) and Techprecision (TPCS) continue to lead the way, with gains of 109% and 72% since the original write-ups.

APNC reported a whopping 69% increase in first quarter earnings, and continues to explore strategic alternatives. While the stock is up significantly, earnings should continue to improve throughout the year and further potential exists to unlock shareholder value.

TPCS is one of my favorite stocks, and the company continues to execute superbly at the hands of the new CEO. The new Chinese subsidiary has already contributed millions of dollars in new sales and appears to just be getting started.

AML Communications (AMLJ) was bought out at $2.10 per share, allowing for a 60 day turnaround and a 64% gain.

Pink Sheets Project

During the quarter, I completed a major research project, going through 3,698 pink sheets stocks individually in the search of bargains.

It has been the most commented post so far on ValueUncovered, and I received quite a few emails from readers praising the accomplishment.

I learned a great deal during the experience, and now have a nice watchlist of stocks for further review.

While all of them are cheap, I’m really trying to understand the business models, and determine if there are any upcoming catalysts to quickly reach intrinsic value – many of them have been cheap for years, so I’ve been selective with my purchases so far.

Portfolio Tracking

Due to the Pink Sheets project and a general focus on even more obscure and illiquid securities, I’m having second thoughts about continuing to track my positions in the Value Uncovered model portfolio.

Many of the stocks I’m currently buying are extremely small, and it is not uncommon for prices to change by dozens of percentage points with a single trade.

For example, one of my largest (still undisclosed) positions dropped nearly 50% on a $99 trade. Only a few days ago, ELST fell 16% on a 369 share purchase (the total volume for the day!) before recovering several days later.

Other stocks require patience over weeks or months to pick up enough shares for a decent-sized position.

All of these factors combine to make tracking in my current format very difficult, and causes the model portfolio to significantly trail my personal performance.


I’m definitely open to suggestions regarding the current model portfolio.

Should it be scrapped all together? Is it better to just announce my average entry points for particular positions rather than using a specific close price?

Or should I just post my actual portfolio results, even though some positions are not disclosed?

I initially started the tracking portfolio as a way to keep a public record of my stock selections. As I continue down the path, I’m finding that this disclosure (at least in the current manner) might not be the best route.

What do you think?


Long all stocks in this article, except closed positions.

If you have enjoyed this entry. Please feel free to bookmark it using your favorite social bookmarking site

12 Responses so far

  1. Parker Bohn says:

    I’d be interested to see the actual portfolio results, whether or not you continue to maintain the model portfolio. If you ever form your partnership, you will probably find it valuable to release verified historical performance data in any case.

    I’d also be interested to see something like a monthly standard deviation of returns as compared to the market, since this is something I track on my own portfolio.

    Personally, I track and record my portfolio results on a monthly basis, and any new funds I add are at the start of a month, which means the only data I need to do this are my online brokerage’s monthly statements.

    • asues says:


      Good points. I’ve gotten several emails from readers who have explained similar thoughts. In reality, I’m hoping to attract serious investors who will comment (and hopefully help improve) the analysis, which is the real point of the posts.

      I’ve also came to the conclusion that trying to ‘track’ something publicly ultimately isn’t very valuable. As you mentioned, any investor will want to see verified broker statements to confirm performance anyways, rather than relying on the timing of my blog posts..

      Btw, do you normally keep track of your performance in an excel spreadsheet? If so, would you be willing to share the template?

      I’m still using an old one from Jae over at OSV (and desperately hoping he finds time to come out with a new and improved version!) but always on the lookout for what others are using.

  2. Teresa says:

    I rather enjoy looking at other investors’ portfolio results. I’m not sure how honest some of these bloggers are, but I think comments from serious, long time investors could be valuable. We all have different strengths, and I’m usually happy for someone to point out something I’ve missed.

    • asues says:


      Agreed. The main goal of the site and the posts is to hear from other outstanding value investors with their thoughts and opinions on the various stocks. The model performance was a sort of side project, to see how my ‘picks’ would do when posted and time-stamped publicly. However, I think I’m going to retire the model portfolio and focus on my personal performance (which largely mirrors the model portfolio anyways), and not worry so much about posting everything publicly.

  3. Jae Jun says:

    Hey Adam,

    Great performance especially in these difficult times.

    For portfolio returns, I think following the approach of the funds is a good idea. I like the way Whitney Tilson does it. If you look at his quarterly report, he does it the same as how I do it now. Monthly, cumulative, quarterly etc. By doing it like this, you can draw up a performance vs benchmark graph.

    At the same time, you can also keep a separate spreadsheet to monitor stocks.

    I wish I had more time too :(

    • asues says:



      I really like the funds approach as well, but am still trying to wrap my head around all of the numbers (getting from annualized return – > cumulative; comparing to benchmark returns mid-year, etc). I’ve went back and forth on several different methods:

      1. The XIRR method based on cash flow ins and outs. Used your new spreadsheet and just grabbed my balance numbers at the end of various periods from my broker.
      2. Using your old portfolio spreadsheet, of comparing each stock purchase to an equivalent amount of shares of the SPY, the adding up the total outperformance. I’ve always struggled with accounting for dividends and other cash transactions using this method.
      3. I’ve also experimented with the NAV approach here: http://www.fool.com/FoolFAQ/FoolFAQ0056.htm

      Seems like most funds and professional investors use the XIRR method? But then I think you lose some of the pick-by-pick analysis that you get with method #2.

      I came across this article: You asked for it: More than you wanted to know about tracking performance

      Seems like the Modified Dietz is the way to go if you are making cash deposits/withdraws throughout the year rather than at specific intervals (like the end of the quarter). Anyone familiar with this method?

      I’d love for others to weigh in with their portfolio tracking methods and/or spreadsheets.

      Most online trackers aren’t customizable enough (and usually require manual entry of purchases/sales), and many of the spreadsheets I’ve seen seem are too simple…I’d love to find a nice combination of flexibility and ease of use!

  4. TC says:

    It’s not convenient or flexible, but calculating the time weighted rate of return is the most accurate method and is the only way to really standardize results. You do have to value the portfolio at each cash in/out flow unfortunately.

    • asues says:

      I’ve done some more research, and it seems like time-weighted rate of return is the standard. However, at least based on the USA today article that I linked to above, it looks like they only include the starting balance, ending balance, and date of each cash inflow/outflow.

      Unless I’m reading it wrong, it doesn’t appear like you need the account balance on the date of each cash flow though?

      • TC says:

        The article actually says: “Technically, you need to know the value of your portfolio every day to get a time-weighted rate of return. Few of us keep records that complete.”

        In reality, the purpose is to calculate a series of holding period returns (around the cash flows) and then link them together (multiply the period returns). You need the ending balance just before the cash is put in the account to calculate the return up to that point. The next day, your investable assets now include the cash, and your base (demoninator) for the next holding period has grown by that cash amount. Hope this makes sense.

        • asues says:


          So in the spreadsheet example at the bottom of the USA today article(with the formulas), it doesn’t appear that the balances are record on the date of the cash inflows, only for the beginning and end dates. Is the example then calculating the return incorrectly or is that method just using an approximation?

          • TC says:

            Correct, that is the modified dietz approach, which is an approximation of the real TWRR. It is not incorrect in that it is viewed as an acceptable proxy for a daily weighted return, but IMO if you’ve come this far you might as well go all the way. :)

            If you only make 1-2 contributions/withdrawals a year then you’re only adding 2-4 more calculations.

  5. Jae Jun says:

    One thing about the XIRR function. It doesnt require a regular cash inflow/outflow for it to work. Irregular cash flows work fine.

Leave a Comment