Categories
Financial Literacy Investing

True Story: My First Investment

Back in 2013, I became interested in the idea of investing.

I was watching a tv show that featured a brief clip about how Warren Buffet had started investing at a young age and was now worth $40 billion dollars!

Hearing this piqued my interest.

I was 25 and envisaging a wealthy future for myself based on a long-term, systematic wealth building method.

So, I started a search for knowledge on everything I could about Buffet.

I read The Intelligent Investor by Benjamin Graham — the man who taught Buffet in the beginning of his career.

It was a dry read if I’m honest, but a necessary one to get the basics of investing into my head.

With just enough knowledge to be dangerous, I thought I’d try my hand at the real thing and buy some shares!

But in what exactly?

I knew you had to value a stock to see if it was trading at a good price, but I had no idea how to do it.

So off I went Googling ‘how to value a stock’ and reading website after website on various methods and techniques.

I arrived at a valuation method called Discounted Cash Flow (DCF).

The DCF is a classic valuation method used to value stocks as well as entire businesses.

It seemed like a good place to start.

Now I just had to find a stock that had a DCF value about 20% less than the current trading price.

Easy… not!

I decided I would stick with companies I knew, so I started valuing all the big companies I could think of.

Banks, insurance companies, technology companies. But everything at the time was overvalued… according to my calculations.

Then, I arrived at a stock that had a valuation 20% lower than what it was trading for.

Webjet (ASX:WEB).

I knew Webjet. I knew what the company did so I felt I could easily explain it to other people.

But I still felt uneasy about buying their shares.

I had read various books and spent hours trawling investing articles online.

But I still had no idea if I was doing it right.

What if I invested my money but then the price went down!?

What if I lost all my money!?

But I thought back to what I had learned from Buffet.

The price is going to go up and down every day.

I wouldn’t sell my house just because every day someone came to the door and told me its valuation had gone down.

So, I just had to trust in the process.

I took the leap.

I logged onto my broker and put in the buy trade for WEB at $4.050.

Not long after that the trade was executed, and I became a real-life stock investor!

I’ll freely admit I did check my portfolio every five minutes for the next few days (*cough* weeks).

Lucky for me, the price went up fairly quickly, so I was able to sleep easy each night.

Looking back though…

I had accidentally bought myself a winner.

Despite not knowing nearly enough to confidently buy the stock in the first place.

Yes, it was 20% undervalued, but I did not investigate enough about the business’s future plans, what the industry performance looked like, what the competition was, and so on.

But lucky for me all of that worked out and WEB is currently trading at $14.38, seven years later.

At the time of writing, that’s a 255% increase (I still haven’t sold my shares).

Since then, I have bought other stocks to build up my portfolio, but none ever taught me as much as that first trade.

As with anything in life, the first time you do something can be extremely tough.

The uncertainty and hesitation will never be as great as it was buying my first shares.

I trusted in the process.

But today, I have the proof to match that trust.

You’ll never have 100% confidence in what you are doing if you’ve never done it before.

Taking my first dip into the investing world taught me about the process, emotions, resilience and confidence.

All of those lessons helped shape me into the investor I am today.

And I don’t say this as someone who thinks they’ve somehow mastered investing.

The more I learn, the more I know I need to learn.

No two days in the financial markets are the same.

No two investments play out the same.

I’m always having my ideas and opinions challenged by the markets and by fellow investors.

But, thanks to the research I did before buying my first stock…

And the solid triple-digit gains that investment has achieved so far…

I can now buy stocks with confidence in my process — and sleep easy every time.

Categories
Financial Literacy Financial Technology Investing

Stop Using Spreadsheets To Track Your Portfolio

Welcome to the first Navexa blog post.

We’re going to use our first expedition into the blogosphere to address a serious, widespread and frankly dangerous problem that might be stalking you as you read this.

This is the problem we are on a mission to solve as we develop and grow our investment portfolio analytics project.

Its name?

Spreadsheets.

Yeah, I know, they’re so useful and easy to customize…

Maybe you’ve used them for decades…

Maybe you can’t imagine using anything else to keep track of your investments, or your personal budgeting.

But, perhaps you don’t know this.

Spreadsheets are dangerous.

In fact, you could say that…

Spreadsheets Are
Wealth’s Silent Killers.

If you’re using a spreadsheet to keep track of the stocks in your portfolio, listen up.

Ever heard of Bargain Booze?

It’s a discount alcohol chain in the UK.

In 2018, the company that owned Bargain Booze, Conviviality Plc, imploded in a financial mismanagement fiasco.

Take a look…

A map with text Description automatically generated

After three years of rising share prices, Conviviality made the shock announcement to its shareholders that it needed to raise £125 million to avoid going into administration.

The cause of this fiasco?

A single spreadsheet error.

Someone on Conviviality’s finance team screwed up.

It was a tiny screw up.

But the consequences of that error were, well, refer to the chart above.

Now, this is just one (severe) example of what can happen when we trust spreadsheets with important and complex tasks.

For a long and damning litany of spreadsheet crimes, head over to eusprig.org.

There, you’ll find horror story after horror story of people and businesses — even governments — committing spreadsheeticide and losing mountains of money.

€100 million here. $8 million there.

A regulatory sanction against a pharmaceutical giant.

Overstated oil reserves.

A lead witness in a fraud case found dead in Orlando (think I’m joking? Scroll down to POB1501 on the website).

The point is, using spreadsheets for tracking crucial information is dangerous — and the results can be disastrous.

Why Would You Track Your
Portfolio In A Format
That Wreaks Such Havoc?

Most self-directed Australian investors have become comfortable using spreadsheets to track their portfolio.

They’ve either created their own, or used a template some else has set up.

It works for them.

At least they believe it does.

Firstly, because they, or a trusted friend, has set up the equations in the spreadsheet.

Meaning the calculations the sheet performs to show returns, income, long-term performance and so on must be correct, right?.

(Hint: Wrong.)

Second, they trust the spreadsheet because they personally enter the information on each trade.

So again, they figure that must be right.

But if spreadsheet misuse has the power to sink a business because of one error…

Cost companies millions…

Trigger damaging legal proceedings…

And even lead to the death of a star witness in one such case…

It’s fair to say there’s a clear and present danger to those who trust spreadsheets to track their investment portfolios.

Danger of what, exactly?

Well, say one of the formulae within your spreadsheet is wrong.

You could have been miscalculating your returns or income since you started using it.

That might have led you to incorrectly report your returns at tax time.

Or, it could have caused you to make a major financial decision like buying a house or borrowing money because your spreadsheet said you had plenty of spare cash in your investment account.

On the other hand, you might have sold out of a profitable position because your spreadsheet showed poor performance.

Or maybe you mis-valued a company’s shares.

You get the idea.

When the formulae and the data entry are in your human hands, they are both naturally vulnerable to human error.

And humans make errors all the time.

(Refer to the long list of spreadsheet disasters on the eusprig website if you’re still not convinced.)

Bottom line: Your investment portfolio is too important to trust to a spreadsheet.

That’s why we at Navexa have created…

A Smarter, Safer, More Sensible Way To Track Your Portfolio
Without Costly Errors

The evidence shows spreadsheets have caused a litany of financial and legal disasters.

And those are just the ones we know about.

So, if you’re a self-directed investor and you want to track your portfolio in a way that not only greatly reduces the risk of human error causing havoc in your financial life…

But also gives you a sense of your invested wealth that goes far beyond numbers in a table…

Then it’s time to trade this:

A screenshot of a cell phone Description automatically generated

Source: oldschoolvalue.com

For this:

A person sitting at a table using a computer Description automatically generated
Navexa: Start tracking your stocks smarter.

It’s the second decade of the 21st century.

The spreadsheet was invented last millennium.

So it’s time to start tracking your portfolio in a manner befitting of a modern investor building wealth in the Information Age.

In other words, by using an online portfolio tracker.

Like the one we’ve made — Navexa. 

In our opinion, it’s the best portfolio tracking software in Australia.

But we would say that, wouldn’t we?

Of course we would.

So don’t take us at our word.

Make up your own mind.

Create your own Navexa account (all you need is a valid email address).

In place of a clunky spreadsheet that demands an unattainable level of manual data-entry perfection and, frankly, just isn’t that interesting to look at (its limitations stop you seeing lots of valuable information)…

You’ll enjoy advanced portfolio management tools that hand you a commanding overview and a deep, detailed understanding of your invested wealth.

For example…

  • Comprehensive Portfolio Performance Reporting: Responsive charts help you track capital gains and income.
  • Focused Single Stock & Crypto Analysis: Easily monitor individual stocks and crypto assets.
  • Real-Time Dividend Performance Monitoring: Map each dividend payment and chart cumulative income returns over time.
  • Comprehensive Tax Reporting: Easily generate reports on capital gains and dividend income when preparing your tax return.
  • Benchmark Your Portfolio Against The ASX & ETFs: Easily compare your portfolio performance with the wider Australian market and exchange traded funds.
  • Monitor Your Cash Account When You Sell Shares: Navexa monitors your whole portfolio — even when you cash out of a position.
  • Calculate A Stock’s Value With Ease: Use your account’s built-in discounted cash flow value calculator to evaluate if a stock is worth buying.

We Want To Help Australian Investors Build Their Wealth
In The Age Of Big Data

We believe the era of tracking your stocks with a spreadsheet is over.

Today, it’s high time you started using an online portfolio tracker to monitor and analyse your investments.

The reasons are obvious (see above).

The Information Age gives you more data than ever before about your investments, the markets and how best to plot your course to a wealthier future.

It’s up to you to make the most of that data.

And it’s up to companies like us to help you do that.

Thanks for tuning into this first Navexa blog.