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A&Co July Result

After 3 months beating the market constantly, the Jakarta Stock Index (JKSE) finally beat our portfolio by 0.87%, not much, but it is still a disappointment.
The grey line represents the abnormal return (Portfolio return - Index return) of the portfolio. Despite that, we made 74% from BSIM, and officially sold it on the 21st of July when the price suddenly jump 20% in just one day - which we thought a little bit weird and looks like it's going to be a rough ride going forward - hence we let it go.

Despite the weird action, BSIM was one of our top stock, its monthly average was 19.92%, whereas its median is 0%, LITERALLY 0%, the high average is due to the sharp movement of 20% in one day. Our second top stock is ELSA, this stock also had a weird sharp movement on 13th of July, it jump to 58% in just one day, almost double in just one day. Unlike BSIM though, ELSA has a fairly high liquidity, thus we weren't very surprise on the big movement, and still have big hope with ELSA - despite the lower oil price. The two other stocks that we are still holding are CTRP, which has a return of 0.34% and ACES of 0.21%, which is pretty standard because the average return on JKSE is 0.24%. We currently still own MTDL, but not much - so it doesn't really affect the overall performance of the portfolio. Below is the distribution of stocks in the portfolio as of July.
Please do excuse of the cash portions, this happen because we've sold BSIM and have not have the chance to shop around to buy new stock at the moment. Even though we have more exposure on "migas" or O&G than consumer goods, the big portion of the consumer goods is due to the price difference back when we bought the stock. Hopefully we will slice the above chart by the end of this month so we will have more exposure to the market and hold less cash.

Overall, the portfolio's performance is 2.48% more than JKSE year to date, below is the flowchart of our portfolio and JKSE.
 A&CO        JKSE
Average 7.4% 4.95%
Std. Dev. 8.01% 4.30%
Sharpe Ratio                0.31

As for standard deviation, our portfolio is much more riskier than JKSE, which make perfect sense due to the higher return. On the contrary, Sharpe Ratio shows only 0.31, this means that it is safer to invest on JKSE than our portfolio, considering the risk is much higher (3.71%), and the average return difference is only 2.48%. In conclusion, are we a good money manager? Theoretically...According to William F. Sharpe (Founder of Sharpe Ratio), probably not, but being able to beat the market is what matters most to us, and to be able to create a higher return with a manageable risk (noticed manageable) is what important for our portfolio.

Overall, since inception the portfolio has an overall return of 76.72%, whereas the JKSE is at 23.66% during the same period, but note that the portfolio's standard deviation is at 21.83%, whereas JKSE is only 7.71% - meaning the portfolio is 3 times more riskier than JKSE, but the return on the portfolio is 2 times higher. Below is the overall result since its inception.

Our August target will be trying to hit our next psychological level of 78% return (inception) or hitting the 9% range for year to date figures. The future outlook of the market seems pretty good, especially with the tax amnesty is happening, there will be a big flow of money coming from abroad, which will create an increase in the stock market and also in the bond market as well. If the index can keep its momentum, it may reach back to its highest point in 2015, which is above 5,500. And if it hits the 5,500 barrier, this means that JKSE will continue its bullish movement, and upside momentum will be dominating the market. 
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Comments

  1. UnknownSeptember 6, 2016 at 1:10 PM

    Great article ... Just one comment, is that capital gain which been realised from selling the stock was added to your returns, coz this figure should be reflected into your portfolio performance as a profit from sell in order to produce accurate portfolio returns and thus it will have positive affect..

    ReplyDelete
    Replies
    1. adrityaSeptember 18, 2016 at 4:49 AM

      Hey Mu,

      Thanks for taking the time to read my blog.
      Yes, I have account all realized and unrealized into above calculations.

      Delete

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