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Weekly Update: New Year’s Resolutions

Monday December 31, 2012

Dear Motley Fool Share Advisor Member,

We know, we know… we told you that we were taking today off, and that you’d hear from us next on January 7th.

We just couldn’t help ourselves (and anyway, we like to under-promise and over-deliver)!

If, like us, you’re planning to have a few days off (or if you’re already on holidays), we thought we’d add a little Foolishness to the holiday season.

Whether you’re a long-term member, or a brand-new Fool, we firmly believe that investing well is equal parts a) finding great companies and b) developing an appropriate investing temperament.

After all, there’s little point in finding wonderful companies only to buy high, sell low and trading way too often. Equally, you can be the calmest and most rational investor alive (and you’d give Warren Buffett a run for his money in the temperament stakes) but if you don’t find quality businesses trading at attractive prices, that mindset would simply go to waste.

In that vein, today’s short update is designed to enlighten, encourage — and hopefully amuse — you.

We’ve also updated our Motley Fool Share Advisor scorecard at the end of this email, so if you’re looking for new investment ideas, the companies whose names have green backgrounds in that list are our current Buy recommendations, and great places to start.

New Year’s Investing Resolutions

If you’ve been with us for a while, you’ll remember that in early July we offered you some suggested resolutions for the new financial year.

In that vein, here are those same — timeless — resolutions for your consideration. We’d love you to stop smoking and get fit (we want to have you around for many years to come), but if you’re looking to add some financial resolutions to the list, here are a dozen we think you’ll benefit from:

1) I will live below my means — spending less than I earn.2) I will save money into a rainy-day fund so I’m ready for what life might bring.

3) I will invest money I don’t need for at least 3-5 years to build my nest egg.

4) I will regularly add to my investment account.

5) I will learn more about investing, taking control of my financial future.

6) I will invest in quality businesses, buying a slice of the company, not just a code on a screen.

7) I will buy shares in a company with the intention of holding them for the long term.

8) I will sell when my investment thesis fails, the company is overvalued or I have a better idea.

9) I will avoid anchoring my decisions to the price I paid for my shares.

10) I will remember that the market can be moody and over-react, both on the upside and the downside.

11) I will expect volatility, and I won’t let it spook me into selling.

12) I will let the market offer me prices (be my servant), not dictate my mood or actions (be my master).

We replicated that list in an article for today’s Fairfax press websites, adding:

“At The Motley Fool we’re in the ‘time in the market, not timing the market’ camp. Investing regularly and letting the creative power of capitalism do the heavy lifting works for us.

It’s an approach decried as unsophisticated and ‘old-fashioned’, but that’s okay with us. Warren Buffett has been accused of that many times — he ignored the jibes and was proven right. We’re not comparing ourselves to the Oracle of Omaha in terms of investing results, but we’re happy to follow in his footsteps when it comes to ignoring the so-called ‘smart money’.”

Recent Foolish Reading (and Recommendations)

If you’re looking to catch up with our recent emails, you might want to check out:

Our most recent issue, where we recommended Retail Food Group (ASX: RFG).

Our most recent weekly update (where we presented a Foolish Night Before Christmas).

Our most recent (and popular) new feature: Best Buys Now.

Our first ever Motley Fool Share Advisor Live Chat.

And if you haven’t yet read it, you might also want to check out Investing The Motley Fool Share Advisor Way, which will give you an insight into how we approach investing (and our service).

Foolish Holiday Reads

If you’re sitting at the beach, reading this on a laptop or tablet, you have our envy!

Whether you’re at home or away, if you’re looking for some enjoyable reads, here’s the list of books we featured in our last issue. Grab your tablet or Kindle, or head down to the bookstore or, even better, support Motley Fool Share Advisor recommendation Amazon.com (Nasdaq: AMZN) and buy one or more of these online:

Tap Dancing to Work: Warren Buffett on Practically Everything

The Most Important Thing

The Millionaire Next Door

The Innovator’s Dilemma

Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger

Barbarians at the Gate

All The Devils are Here

Liar’s Poker

In The Plex

Lastly, if you want a refresher, or if you’re just starting out, you might want to check out A letter to a new investor which has some thoughts about investing and some additional reading recommendations.

The Motley Fool Share Advisor Scorecard

If you haven’t had a chance to pick up some of our recommendations, we still think there’s great value to be had in all of our Buy recommendations.

For those who’ve come in late, reading the scorecard is simple. Company names highlighted green are Buy recommendations, while companies highlighted in yellow are HoldsCompany names highlighted in red are Sells.

The ‘Return’ column shows the return of each recommendation since we recommended it, and is coloured green when the return of that company is beating the market and red when it lags the market return.

Please also note that the ‘Then’ price is automatically adjusted by our data provider to show the cost base of each company, including dividends. The ‘Now’ price is the current market price, or the price on the date we decided to sell a recommendation. In that instance, the All Ords Total Return is also frozen as of that date.

The All Ords Total Return is similarly dividend-adjusted, making for a fair and more accurate comparison than share prices alone.

Company Rec Date Then Now Return All Ords Total Return
Retail Food Group (ASX: RFG)buy 20-Dec-12
2.95
3.15
6.8%
1.0%
3D Systems (NYSE: DDD)buy 20-Dec-12
49.10
49.20
0.2%
1.0%
Domino’s Pizza (ASX: DMP)buy 22-Nov-12
9.39
10.50
11.9%
5.9%
Westinghouse Air Brake Tech(NYSE: WAB)buy 22-Nov-12
77.45
83.55
7.9%
5.9%
Codan (ASX: CDA)buy 25-Oct-12
2.07
2.41
16.4%
4.2%
Priceline.com (Nasdaq: PCLN)buy 25-Oct-12
544.59
586.44
7.7%
4.2%
Seek (ASX: SEK)buy 27-Sep-12
6.73
7.02
4.3%
7.4%
Google (Nasdaq: GOOG)buy 27-Sep-12
723.66
674.21
-6.8%
7.4%
Corporate Travel Management(ASX: CTD)buy 23-Aug-12
2.30
3.51
52.9%
8.0%
Starbucks (Nasdaq: SBUX)buy 23-Aug-12
45.73
50.70
10.9%
8.0%
Metcash (ASX: MTS)buy 26-Jul-12
3.12
3.34
7.1%
15.0%
Netflix (Nasdaq: NFLX)buy 26-Jul-12
58.02
86.04
48.3%
15.0%
OrotonGroup (ASX: ORL)hold 28-Jun-12
6.94
6.90
-0.5%
17.5%
Westport Innovations (Nasdaq: WPRT)buy 28-Jun-12
35.37
24.96
-29.4%
17.5%
Amcom Telecomm.(ASX: AMM)buy 24-May-12
1.02
1.50
46.8%
17.3%
Teradata (NYSE: TDC)buy 24-May-12
72.07
58.45
-18.9%
17.3%
Sirtex Medical (ASX: SRX)hold 26-Apr-12
6.24
13.18
111.3%
8.9%
Titanium Metals (NYSE: TIE)hold 26-Apr-12
13.59
15.88
16.9%
8.9%
Industrea (ASX:IDL) 22-Mar-12
0.98
1.21
23.5%
2.2%
WisdomTree (Nasdaq: WETF)buy 22-Mar-12
7.83
5.76
-26.5%
11.0%
Vocus Communications(ASX:VOC)buy 23-Feb-12
1.70
1.80
5.9%
11.7%
Amazon.com (Nasdaq: AMZN)buy 23-Feb-12
168.85
236.15
39.9%
11.7%
QBE Insurance Group (ASX: QBE)buy 26-Jan-12
11.20
10.90
-2.7%
13.4%
Dolby Laboratories (NYSE: DLB)buy 26-Jan-12
30.45
27.91
-8.3%
13.4%
Thorn Group (ASX: TGA)buy 22-Dec-11
1.48
2.01
35.7%
18.5%
Apple (Nasdaq: AAPL)buy 22-Dec-11
387.98
490.81
26.5%
18.5%
Integrated Research (ASX: IRI)buy 5-Dec-11
0.40
1.37
240.6%
12.3%
Coach (NYSE: COH)buy 5-Dec-11
59.34
52.30
-11.9%
12.3%

All figures are accurate as of 2:10pm on Monday, December 31, 2012.

As a reminder, the prices of the U.S. recommendations are in Australian dollars and all start prices are adjusted for dividends. As we explained from the outset we wish to be totally transparent with our scorecard and to ensure all returns account for dividends, capital gains and currency movements.

Coming Soon — Heading into 2013 with a vengeance

Our next regular weekly update will hit your inbox after the market closes next Monday, January 7 — hopefully the reading above will tide you over until then!

Our January Best Buys Now will be sent out on Thursday, January 17 and the next issue of Motley Fool Share Advisor, complete with our latest ‘best of the best’ ASX stock pick, will arrive on Thursday 24th January.

As always, if we find opportunities or have information we need to share with you, we’ll let you know via a special email alert.

If you’re on Facebook, you can like us here, or you can follow us on Twitter.

Happy New Year, Fools!

Bruce Jackson and Scott Phillips

Motley Fool Share Advisor

Visit the Motley Fool Share Advisor website to view past issues and weekly updates.

Disclosure: Of the companies mentioned in this email, Bruce Jackson owns shares in Corporate Travel Management, Thorn Group, Vocus, Woolworths, 3D Systems, Apple, Google, Starbucks and Titanium Metals. Scott Phillips owns shares in Corporate Travel Management, QBE Insurance, OrotonGroup, Woolworths and Amazon.com. Click here to view The Motley Fool’s disclosure policy.

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