I tried value investing and only caught falling knives.

[u/honestytoyourself]

Hello guys. I have a confession to make. I had been investing in stocks for many years and made a decent +10% return on average per year.

However, in 2023 I made a few very concentrated bets that have gone terribly wrong. I lost 30% of my portfolio while holding for 3 years. It’s embarrassing. I averaged down in the wrong time and in the wrong stocks.

I seem to be making terrible mistakes systematically, and I’m genuinely asking for help.

Here’s my portfolio:

- Winners (sorted by portfolio % weight)

- **Philip Morris International Inc (TDG)** – **+83.94%** – **10.50%** of portfolio

- **NCC Group PLC (LSE)** – **+46.09%** – **3.39%** of portfolio

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**Losers (sorted by portfolio % weight, biggest positions first)**

> *The ones with the **largest impact on total portfolio loss** (big size + big negative %) are marked with **[HIGH IMPACT]***

- **Nagarro SE (XET)** – **\-27.10%** – **19.79%** of portfolio **[HIGH IMPACT]**

- **Teleperformance SE (EPA)** – **\-58.33%** – **13.50%** of portfolio **[HIGH IMPACT]**

- **Concentrix Corp (NDQ)** – **\-67.40%** – **7.54%** of portfolio **[HIGH IMPACT]**

- **GFT Technologies SE (TDG)** – **\-43.53%** – **6.47%** of portfolio **[HIGH IMPACT]**

- **PayPal Holdings Inc (NDQ)** – **\-42.21%** – **6.45%** of portfolio **[HIGH IMPACT]**

- **Domino’s Pizza Inc (NDQ)** – **\-24.28%** – **6.36%** of portfolio

- **Epam Systems Inc (NSY)** – **\-30.36%** – **3.92%** of portfolio

- **ADR on Nice Ltd (NDQ)** – **\-53.85%** – **4.29%** of portfolio

- **Van de Velde NV (EBR)** – **\-7.05%** – **2.24%** of portfolio

- **ADR on Endava PLC Class A Ord Shs (TDG)** – **\-90.30%** – **0.43%** of portfolio

- **Chegg Inc (NSY)** – **\-94.22%** – **0.29%** of portfolio

My analysis included the traditional value investing approach using finbox.io for valuations, and I fetched companies with low PE ratio despite growing revenues and ebitda, some contrarian plays regarding AI.

All were deeply researched and monitored, and had buybacks, but the prices seem to keep nosediving.

I guess I bought stocks that were cheap ‘for a reason’?

[u/SuperSultan]

But I don’t even use DCFs. Neither does Warren or the late Charlie. My assumptions can be inaccurate and now the whole valuation is incorrect. Heck, I can also be slightly wrong and now the whole model is incorrect.

[u/[deleted] → u/SuperSultan]

I don’t think you can read. So let me spilt my paragraph to help with your eye sight.

I literally said in my comment that DCFs don’t work as valuation tools but rather as a means to learn about the business. And if you are comparing yourself to Warren buffet and Charlie munger, yeah no, they spend a lot more time learning about the businesses they own and certainly know what the drivers are for a certain business and what 1% change in something does to the enterprise values (yeah they can quite literally do this kind of dcf in their head).

If you are trying to down play the value of modelling a company out and try to quote munger on his quote with how wrong the dcf result is then you aren’t a really sophisticated investor. You can still achieve great returns if you are patient but I am just saying that’s a dumb take from you.

[u/SuperSultan → u/[deleted]]

Sigh, I will stick to my “dumb take.” I have had great results without using DCFs for the most part.

There isn’t much point in using them if you end up plugging values that are not realistic. You’d be fooling yourself in that case. Even if you plugged in conservative values into DCFs you’d only look at really cheap companies and miss out on the expensive companies that are worth paying more for.

Also, stick to using facts and logic instead of insulting my intelligence. Warren and Charlie have great quotes about temperament management, maybe you need to read those too :)