My Venture Portfolio Q1 2014 Update

My Venture Portfolio experiment has been rolling on since mid Q4 2013. So how has it been doing?. Has it been a worthwhile experiment thus far? Here’s my update. 

 

I took a strategic decision during mid Q4 2013 to augment my pathway to early financial independence beyond just dividend investments. Why was this? Frankly, it wasn’t because my dividend returns have been poor or have been underperforming. To the contrary. I’ve outperformed relevant benchmarks over a 10 year period. In fact, my dividend portfolio has given me a total return of close to 12% over the last decade.

It’s because I’m driven and hungry to be completely financially independent. We have a roadmap and plan….and I’m keen to execute as fast as possible to get there. So my Venture Portfolio has joined my Growth Portfolio and Dividend Portfolio as planks in my strategy to get independent, and get there fast.

So with that said, how are things tracking?

BitCoin

Invested: $2750, Value: $2750, Gain/Loss: ($0)

After all the goings on in the last few months, BitCoin is now approximately level with what I initially invested, With various BitCoin exchanges having shutdown, I suppose I should just be thankful that my investment is still in tact, no matter the volatility!.

The promise of BitCoin is still real, but governments are getting more aggressive as far as the regulatory framework around BitCoin. China appears to be doing all it can to make sure BitCoin transactions are completely stifled. It’s understandable, given the government’s complete fixation on controlling the money supply there. There’s very tight capital controls and BitCoin could be seen as a way to circumvent those.

BitCoin remains a longshot to be a successful monetary platform. I’ve been caught in 2 minds as to whether this should be seen as a model for a strong venture investment for my venture fund going forward. The reality is that BitCoin probably isn’t a binary home run or fail. It could very easily end up in some middle ground as a niche play to “store value”. That makes it a still worthwhile play in my book.

IProperty Group

Invested: $7,900, Value: $15,250 Up $7,350

IProperty has had a very strong run in the last few months. It has clearly established Number 1 positions as the property portal of choice in Malyasia, Singapore and Indonesia. Hong Kong is also making significant progress. More significantly, IProperty Group is now cash flow positive. This could be the beginning for the company in showing strong free cashflow growth moving forward.

Frankly, I think Iproperty has just benefitted from the strong growth in equity markets and growth/tech stocks over the last few months. A significant correction could see the stock retrace recent gains. At one point over the last month, I was sitting on close to a $12,000 gain on this position. The stock has fallen almost 30% from this high. I’m not concerned. I’m in this one for the long haul.

ICar Asia

Invested: $5,370, Value: $8.580 Up $3,210

ICar stills has a market cap of <$150M. It has an addressable market in the Asia region in excess of $1B. While the company still has a long way to go, it’s started to take steps to monetize it’s dealer network and portal visits to each of the sites keeps showing steady increases each month.

The big news with ICar that has pushed up valuations for the company so substantially, so quickly was the news that Car Sales.com (an Australian car portal) has increased its investment in ICar Asia to almost 25%.

I suspect ICar will get acquired by CarSales.com at some point. It’s only a matter of time. I’d be very disappointed if this was to take place within the next couple of years. The real money on these types of investments is made on a 3-5 year holding period. I’d really like a 3-5x return on this one, which is not inconceivable over 5 years.

FreeLancer.com

Invested $8,700, Current Value $8,700 Gain/Loss ($0)

Freelancer continues to roll up other Freelancing sites globally. This is a game that is all about scale. Freelancer is in the first innings of what should be a global outsourcing trend. I continue to patiently hold.

Ibuy Limited

Invested $4,650, Current Value $6,480. Gain/Loss $1,820.

The company specializes in what are known as “flash sales”, something like a Groupon but for merchandise and also in Asian markets where there are no concepts of discount warehouses. I’ve been following the progress of VipShop holdings. The leading Chinese flash sales portal which has a market cap of close to $8B. Compared to IBuy’s $200M market capitalization, there is significant upside here.

Austin Energy

Invested $4,000, Current Value $2,000, Gain/Loss ($2,000)

No real news flow to report on Austin at this time. It continues to be the dog in my venture portfolio, but I haven’t given up on this one yet.

Venture Portfolio Summary 

While short term, 3 month comparisons are frankly meaningless for high volatile assets that typically need 3-5 years to gauge business traction the overall summary for my venture activity looks like this:

Total Invested: $33,370

Current Value: $43,700

Net Gain/Loss: $10,390

Return: 31%

My venture portfolio is now fully invested. In fact, there is probably more invested in the portfolio that I initially set out to invest, but I am comfortable with the amount that is invested. I won’t be looking to add additional investments to the venture portfolio at this point.

Frankly, I think the strong performance of the portfolio is more a reflection of elevated market valuations rather than any stunning growth or business performance of any of the underlying components. The performance and returns will ebb and flow over time.

I recently had a very encouraging milestone with one of my small cap dividend payors. I invested in Big Air Limited, a small cap telco, in 2011. Coming on 3 years as part of my dividend portfolio, Big Air recently returned 3x my original investment in just capital appreciation, not to mention some rapidly growing dividends as well.

This is just the kind of capital appreciation that I’m hoping can be achieved with my venture portfolio over a 3-5 year period.

Comments

  1. I think it’s interesting you set up this sub portfolio, Integrator. I enjoy the update and appreciate that you have taken risks I’m afraid to take with my own portfolio. I probably follow this segment so closely precisely because it’s YOUR real money. Best of luck. Enjoying the ride!
    -Bryan

  2. Integrator says:

    Thanks Bryan… I’m also enjoying the ride so far. It will be very interesting to see where this shakes out in 3 years….

  3. Great returns. It’s fun to see how your venture portfolio is performing. What broker do you use for icar and iprop?

    • Integrator says:

      Hi Zach, I actually purchased these through the same broker that I hold all my Australian equity holdings with. One of the benefits of having coming over from Australia i guess (it’s an Australian based internet broker). I’m not aware of which US brokers allow you to trade Aussie stocks unfortunately.

  4. DivHut says:

    Very diverse portfolio. Out of all the ones that I have seen online I have never come across a portfolio with an “investment” in bitcoin. Nothing ventured, nothing gained I guess.

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  2. […] of items in my portfolio.  The first of several moves that I made toward growth was setting up a venture portfolio. It’s still early days for this portfolio. However, I’ve been pretty pleased with how […]

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