My £20m Target – Quentinvest in action

On Quentinvest generally some subscribers are aware that I have a stated target of building a £20m portfolio in 10 years time. I mentioned this to somebody in Uruguay and he asked me what starting stake would be needed to do this to which I replied that I didn’t know but £25,000 was a figure that came to mind. The conversation ended immediately. He laughed and walked away. I have some sympathy for his attitude but as it happens I am not joking. This is exactly what I am trying to do though if necessary I will inject more cash to support my position.

I don’t think anyone has yet grasped just how powerful my strategy can be if you (a) buy only great stocks in stunning uptrends, (b) never sell, (c) keep adding more to your best-performing holdings and (d) make all or most follow-up purchases and in my case often initial purchases as well with borrowed money at low (secured) rates of interest.

I positively expect my winners to fund my new purchases. It is a bit like the property developer, who told me years ago that if you have to use your own money it can’t be a very good project.

Remember that your interest costs will be offset by dividends received from those holdings, which pay dividends and dividends grow over time, whereas interest rates just go up and down (which is why I have never understood why anybody would ever want to buy bonds).

The Quentinvest approach is not that different to the strategy that has been pursued by Warren Buffett since the second world war. He started from scratch and has a current net worth of $83.5bn. Nobody gave him a pile of money and said – make more Warren. He started with nothing doing a newspaper round and built up from there. His miracle is that he got (understood) investing immediately; well, helped by an important nudge from partner, Charlie Munger, who alerted him to the importance of growth shares.

It has taken me half a century to come to the same conclusion that it is not just about good buying, it is what you do and perhaps even more importantly don’t do afterwards. Most people are far too energetic with their investments. It’s time to chill!

What I have realised is that the money I stand to make from following the Quentinvest strategy myself is far greater than anything I stand to make from my publishing business; that’s always been the way with my investments, actually. So I am giving you all fair warning. I am subscriber numero uno. The decisions I take on Quentinvest are designed not to make me money fast, that is in the lap of the gods but they are designed to build my portfolio fast. I am taking a certain degree of risk in the early stages, which I love because I am a natural risk-taker but I am playing to win. Most of my money in life has come from the stock market and I own some lovely houses; well, I think so.

In particular, I am aiming to build a 500 share portfolio in five years, which means, on average, adding two new shares to my portfolio each week. This is in addition to the follow-up purchases so on Quentinvest I am going to be really going for it. I am on track at the moment by the way with 74 investments made since last July. This is ”formula one’ investing. I am in a hurry because although I am fit enough to do intense exercise at the gym I am old in biblical terms, which means I don’t have time to go slowly. I’m not the only one, I know – a subscriber cancelled last week after more than 30 years, saying he was just too doddery to go on; he is 92.

The significance of the 500 portfolio is that it is difficult to build a 500 share portfolio but once done you have a sensational asset – a portfolio consisting entirely of shares in 500 of the greatest businesses the world has ever seen. How can that fail to be a money-making machine? My attitude is that the day you and I reach a 500 share portfolio will be the day my job is done. After that you can just sit back and count the money, buy your Bentley, order your yacht, visit Machu Pichu; whatever floats your boat.

This is especially true if you carry on with the follow-up buying strategy. Imagine how fast a 500 share portfolio is going to scale with a following wind from strong stock markets and follow-up buys being applied to the pick of a 500-strong crop. I had a legendary day once when I made £1m (on paper) in a single day! It would be fun to do that again.

What I undertake is to carry on telling subscribers exactly what I am doing. If you want to follow me on this helter skelter ride you can. You can also go more slowly. Buy every second stock I buy or every fourth. You can also be less aggressive with the follow-up buys. You can absolutely do whatever you like with total insight into what I am doing.

I would caution though that if you are too picky you lose the power of the system, which is designed to take account of the fact that like Buffett and everybody else I can’t predict the future. I don’t know which selected shares are going to do well and I am often surprised; the sure things go phut and the outsiders win the race; I just know that some will fail but a lot will succeed, some beyond my wildest dreams.

Incidentally, one reason why I get big returns over time is because I take risks. I go for the Getswifts, Nvidias, Teslas, Beigenes and Bitcoins. This is too dangerous unless you do it within a portfolio.

Two last points: I am dependent on stock markets for performance and signals. In quiet or falling markets I go quiet. Sometimes I favour the UK, sometimes the US, sometimes both; it all depends where the action is at that moment.

I have also decided to set a 10 year target for Quentinvest for ETFs, to which I know some of you also subscribe. ETFs are a new area for me but I am already getting a good feeling about the potential. My preliminary target for 10 years, which I think is aiming low, is to build a £1m portfolio, probably with a similar injection of cash as with the share portfolio. The difference with shares is that you can get winners, which are real game changers; it is harder for ETFs to do that but on the other hand ETFs don’t go bust.

I haven’t taken any decisions yet about how many individual ETFs to have in the portfolio though 100 seems like a good number to work towards. A 100 share ETF portfolio with regular follow-up buys is going to scale rapidly so would be an exciting investment by anyone’s standards.

So there we go; onwards and upwards. Let’s hope this great bull market keeps on rolling for another decade as I suspect it will. I look at the world and personally I have never seen it in better shape, at least for most of the humans; it may not be so great for the animals, the environment or the climate but I think slowly but surely we are learning to do better on those fronts.

This is the golden age of globalisation, technology and the ever-freer movement of people and goods and it’s amazing (forget it, Trump, May and Farage; the doors you are trying to close aren’t there any more and I say this as a man who voted for Brexit because I hate the EU and it’s galumphing bureaucracy). I tell my children (all of whom after September, like many of their friends, will be living in countries they weren’t born in) they are part of the best placed generation ever and you don’t even have to be a man any more; girls get to play with all the toys as well! I don’t ever want to die with all this going on.