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September 15, I started the challenge to reach $ 1,000,000 in my account savings free of tax (CELI) from a capital of $ 101,622. As promised, monthly updates allow you to follow the evolution of the challenge. During the month of September, I have proceeded to any transaction and the market value of my portfolio at the end of the month amounted to $ 100,011 for a negative return of 1.6%. Here are the yields of the various indices from September 15 to September 30, 2014:
- TSX Composite = - 4.3%
- S & P500 = - 1.6%
- Russell Microcap = - 6.0%
- TSX SmallCap = - 8.7%
Note that the TSX Venture did even worse with a yield of 11.2%. This index is dominated by values related to natural resources; for this reason, I am of the opinion that it is not appropriate to use the index as a point of comparison. In a context of generalised correction of the market, my TFSA has therefore better performed as the main benchmark indices.
The MicroCaps Conference
For my column for the month of September, I would like to share with you my experience at my first conference of investors: The MicroCaps Conference, last 1 and 2 October in Detroit. The private event organized by the MicroCapClub, brought together about 70 investors and 13 companies in a entire innovative concept: cocktail October 1 and 'speed dating' Oct. 2 - in Group of 5 or 6 persons, 15 minutes and question period 10 minutes with the management of each company-, followed by a group dinner. Usually, conferences can bring together several hundred companies and investors in a more impersonal format. Here, the cream of the crop!
This exceptional opportunity made me realize two important success factors:
(1) access to the management
To get higher yields, it is not enough to read the annual reports, quarterly management reports and analyst reports, when available. You must demonstrate due diligence in your research on the industry, the sector, the competitive environment, so forth. An essential element: discuss with management. It is possible to learn more in a discussion of 30 minutes with the CEO of the company which you are studying the investment opportunity than in any other activity related to your research and analysis process. Doing your own research by checking the information conveyed by others, you will be able to arrive at your own conclusions and gain an advantage in the market.
(2) having a mentor or be part of a community of investors
There's no better way to learn than to rub shoulders with the best in its field. When Aaron and I began to be interested in the last year, we discovered three communities where abound the ideas and constructive exchanges: