Investing Round Table (May 2023)

We have One Job. Actionable ideas. Our cadre of stock selection knights will share some of their best current ideas while maintaining a tracking portfolio of monthly selections that now spans nearly eleven years. The Knights are Ken Kavula, Cy Lynch, Hugh McManus and Mark Robertson. The Round Table tracking portfolio has beaten the Wilshire 5000 since inception (July 2010) by 5.1 percentage points. The annualized rate of return is 15.3%.

The Manifest Investing Mid Michigan Chapter hosted their May 2023 Investing Roundtable, featuring Ken Kavula, Mark Robertson, Cy Lynch, and Kevin Gillagli discussing the performance of their tracking portfolio and presenting four new stock ideas for potential inclusion. The portfolio has maintained its goal of outperforming the Wilshire 5000 benchmark by 5 percentage points, achieving a 15.3% return versus the market's 9.9% return over its history. With 14 years of consistent methodology, the team reviews their top 20 holdings and identifies challenge stocks that may need reconsideration based on projected annual returns and valuation metrics.

The discussion highlighted strong performers including Microsoft (selected five times, grown from $5,000 to $81,000), Google, and Green Brick Partners, which have recently surged in value. The team examines stocks on the "hot seat" including Nvidia, Agilon Health, and Micron Tech, evaluating whether they should remain in the portfolio or be replaced. The speakers emphasize their core investment philosophy of buying quality companies at reasonable prices, using the PAR (Projected Annual Return) methodology, and maintaining discipline with non-core holdings at less than 25% of portfolio value.

Key takeaways include using the stock selection guide's three key metrics (financial strength, EPS, and quality columns totaling 225 or more for core stocks), understanding that analyst valuations can overshoot in both directions, and recognizing that portfolio decisions require ongoing evaluation rather than reactive trading based on short-term momentum.