One year performance for Validor Holdings (I'm the CEO and sole owner)
I started Validor Holdings in 2023
Legend:
As with all pages the ‘✙’ sign is there to warn you/put in a “first do no harm” designation notification. Remember the disclaimer here.
A ‘do not pet that dog 🐻’ notification means you should stay the hell away or completely distrust whatever that product/security/site/external piece of advice is. It could also mean: “Don’t be dumb” To understand where the ‘do not pet that dog’ reference comes from watch this video here: link
Validor Holdings is an LLC I started which I am the sole owner of. Originally, I formed the company with the intention of investing in rental properties.
🐻One of the worst investments I ever did (mainly due to psychological factors on my part) was a rental property in Ohio. I was in a rush to buy a property which had recently been renovated, to create cash flow. Why was I in a rush? Because interest rates were about to increase again and I wanted to get a mortgage at a lower rate. I didn’t have a realtor look over the deal but bought directly from a “turn key” provider. Nearly all the appreciation had happened as a result of the renovation. So there was no margin of safety there. The property was in Akron Ohio, so you know… not the best quality renters there + plenty of property inventory.
It was a classic case of “it’s cheap!” but cheap ≠ value.
Recently, I read a book called “profit first” a book recommended by a good friend of mine, Aron Rash. The book focuses decisionmaking towards ensuring profit first. Once your focus is there, you intuitively look for efficiencies and find creative ways to cut costs. The way the book handles accounting and budgeting is also very interesting, and a better fit for human nature in my view vs standard accounting practices.
Validor Holdings has a brokerage account associated with it, which I also use for check writing purposes as well as investing.
Instead of rental properties, I have focused the company on buying and holding closed end funds to ensure the cash flow produced by these meets and surpasses administrative and insurance costs after taxes and inflation, leaving some funds over for reinvestment, cash, or distributions at my discretion.
Here is the 1 year performance since all the changes have been implemented. The following snapshot was taken by me today in the Fidelity portal:
^ Most of the 23.58% returns occurred quite recently after purchases of holdings I felt were reasonably-or-under valued. I do not currently do any options or speculative activities in this account. I only currently buy CEFs or companies after a valuation process. So only time will tell if it stays this good. My intent was not to beat the S&P (which is a dumb goal for many reasons) but was instead to merely ensure the company was cash flow positive and profitable. Most of the purchases are focused on cash flow producing securities (not appreciation). Since this is the case, I anticipate that longer term, the overall returns will be lower than if appreciation was the main focus.
Beating the S&P 500 was never my goal, and the fact I did so for 1 year is likely to be a fluke. It will likely underperform the S&P 500 long term, although it may produce more income, and potentially be less volatile relative to the index.
The company is cash flow positive as of this writing, and is likely to remain that way.
I am not disclosing the holdings here since if I do so, they would be disclosed through a paid version of this blog (I would after all, prefer to make money). It’s also important to remember that since the assets I bought have appreciated, they are not currently as good of a value as of when I bought them originally.
For CEFs, my valuation process is different than it is for valuing individual companies. I look at a variety of parameters in CEF Connect and CEF Mastery. CEF Mastery has a better look at a wider variety of data points I care about, and is more accurate generally than CEF Connect on the things I care about. But I still use both. CEF Connect is free, and CEF Mastery is not.
At this time, one holding for Validor is a BDC, the rest are CEFs. I anticipate buying individual companies this year as well to add to this portfolio in small amounts.
The logo I made for Validor Holdings is below. The clock symbolizes the fact that I tend to employ strategies where “time is on my side”, or where I can sit and wait (and collect income of some kind while waiting):
Another clock analogy: “Time will tell” how things go from here. In a bull market reaching all time highs, it’s easy to look like a genuis. The real test is how everything performs including the income production, during a downturn. We’ll have one soon enough… at some point…
I’m currently working through the main way I want to conduct valuation of companies, and once I do that, I plan on releasing a paid version (for a very reasonable price) of this blog which will walk through holdings I like and why. These will not be recommendations, but are intended to provide you with a list of candidates to consider once you have conducted your own due dilligence. Remember, only you are responsible for your decisions, not us. Until next time…