What I've Learned From 5 Years Of Running A Growth Portfolio

Summary

• The Project $1M portfolio, a tracked growth portfolio on Seeking Alpha, turns 5 years this month.
• The portfolio has returned 22% p.a. over this period, providing satisfactory performance vs. the S&P 500 and the Nasdaq 100.
• Having competitively advantaged positions with tailwinds to drive growth has helped, and buying them when nobody wants to own them is even better.
• Founder risk is particularly pronounced in the portfolio, as is regulatory risk.
• This idea was discussed in more depth with members of my private investing community, Sustainable Growth. Get started today »

In November 2015, I started a publicly tracked growth portfolio on Seeking Alpha with the intention of turning approximately $275k into $1M by November 1st 2025. It seems a long time ago. Barack Obama was still the US president and the Denver Broncos were the NFL champions. In the meantime, the portfolio has been through the Brexit crisis, fears of Chinese economy collapse, taper tantrums about rising interest rates, and of course, a global pandemic.

While much has changed in the intervening 5 years, the objective of the portfolio was intended to illustrate the power of a long-term investment program which would stay the course, irrespective of political, economic and social change. What a time of dramatic change it has been in between!

The project was inspired by the late, great Jack Bogle who, at that time, bemoaned the fact that the S&P 500 was likely to only return "low single digits" for the next decade. I wanted to achieve something better with my investment capital.

The methodology and strategy behind the project was a fairly simple one. The identification of the best businesses that had dominant competitive positions that were led by visionary driven founders with meaningful skin in the game to incentivize them to create sustainably growing franchises.

More simply stated, I was throwing in my lot with the likes of Marcos Galperin of MercadoLibre (MELI), Jack Ma of Alibaba (BABA), Pony Ma of Tencent (OTCPK:TCEHY), Jeff Bezos of Amazon (AMZN) and Mark Zuckerberg of Facebook (FB) to steward my investment capital to long-term success. The plan from the outset was to make and set the investment, monitor the business progress, take no action if things were tracking and then have the market tally up the totals and indicate the portfolio worth in 10 years.

Here is the

Analyst’s Disclosure: I am/we are long CRM, NOW, PMCUF, MA, V, FB, AMZN, ADBE, GOOG, LVGO, VEEV, CSLLY, TCEHY, BABA, MELI, TEAM, NNCSF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.