DVP uses fundamental analysis to create stock portfolios that help deliver market outperformance over the long-term
Deep Value Portfolios is a get-rich-slow-and-keep-it newsletter, rather than a get-rich-quick-then-lose-it-all one. Well-run value investing strategies normally earn annual returns of 15%+, over the long haul. R100 000 invested at a compounded annual growth rate (CAGR) of 15%, would turn into around R400 000 after a decade (excluding taxes). That same R100 000 growing at a higher CAGR of 20% for a decade, would turn into roughly R600 000 (excluding taxes). Those who fantasize about instant lottery-ticket winnings are not the type of subscriber DVP tries to attract. The subscribers we’d like to have are disciplined, with a long-term mindset, and understand the benefits of a patient, realistic outlook over the course of an investing lifetime.
For rational people with the required will power and of reasonable intelligence, the returns just described shouldn’t be ignored. The same R100 000 invested at a 15% CAGR for twenty years would turn into almost R2 million (excluding taxes). R100 000 compounding at a 20% CAGR over twenty years would be worth about R4.5 million (excluding taxes). Clearly a smart, deep value investment approach and good amounts of patient discipline can generate highly impressive, long-term returns.
As of January 2021, average returns for the JSE over the past 120 years have been around inflation plus 7% annually. South African government bonds currently yield just over 8% per year. A regular bank account will pay you about 5% interest annually on cash in a call account. In other words, a 15%+ long-term CAGR is undeniably attractive when held up against the many traditional alternatives.
We’re confident the portfolios posted in our quarterly letters will produce average annual returns of 15% or more, over the long-term. That’s the goal (which we regularly measure ourselves against in the “Our track record” section), and enduring performance of that caliber would put Deep Value Portfolios in Seth Klarman, John Templeton, and Peter Cundill territory, as far as investment CAGRs are concerned. For a patient and disciplined individual interested in learning how to generate market-beating lifetime returns, please feel free to follow along by subscribing to our quarterly newsletter.
Keep in mind that the links, insights, portfolios, and more, in our letters are provided for educational purposes. None of our content should be considered investment advice or a solicitation to buy/sell securities. We’re an informational newsletter providing our own personal opinions and materials, so contact an investment advisor before making any financial decisions. For more on this, refer to the disclaimer at the bottom of this website. Please invest responsibly.