Recap: Investing by Numbers

A few months ago, I wrote a post regarding investing by book value, and wonder if this portfolio will be able to beat the Hang Seng Index.

6 months has passed. How time flies!

The returns of this portfolio is a mere 0.79% without accounting for dividends. My calculation told me that HSI returned 1.94%.

As expected, there isn't a significant difference. I wouldn't expect dividends to make much a difference in 6 months.What are the advantages of investing in this manner (by book value)? I believe if one were to invest by index, there are probably frothy years where there isn't a huge Equity Risk Premium (difference between returns by index and bonds). But there will always be companies with temporarily problems. If one is to be more selective, e.g. by investing with a special emphasis in net-current-assets or even sustainable dividends, the rewards are there for the taking.

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Little Portfolio Returns, YTD: 11.9%
Tracker Fund of Hong Kong: 14.8%
SPDR Straits Times Index ETF: 4.24%

The Hong Kong index is proving to be hard to beat. No significant purchase is made since Feb.