The Hypothetical Ethical Share Portfolio Final Update – 10/10/2014

The outlook is good for the Hypothetical Ethical Investor – but before we talk about our hypothetical friend, we should probably do the housekeeping.

His portfolio lost Fiducian Portfolio Services (ASX:FPS) at price of $1.88, a fact I noted here, prior to my last real-life sale.

As I write the ASX All Ordinaries (INDEXASX:XAO) sits at 5,185, below where it was for all but the first hypothetical pick. Indeed, had the hypothetical ethical investments tracked the market, we would have a return of -2.58%. Instead, the average return is 33.81%, demonstrating outperformance of 36.38% over the share market at large. While the portfolio remains a work in progress, you will never get to see its progress, because this is the last ever hypothetical ethical share portfolio update.

The picture is sweeter when we include dividends, with an average total return of 37.12%, a figure that would balloon further were it to be annualised (the average holding period is less than a year).

Hypothetical Ethical Portfolio 10:10:2014

Now, on to the more important question: why must we bid adieu to the Hypothetical Ethical Investor himself?

hypothetical explanation:

In August 2014, the hypothetical ethical investor found himself feeding a stonefish to a reef shark 20m under the water surface. The locals living on the island – La Providencia – were determined to keep the invasive species under control, as the fast-breeding stonefish are threatening the biodiversity of the reef. Wouldn’t it be nice if all these colourful and fantastic species were alive for my (hypothetical) great grandchildren to see, he thought.

As the small shark ripped the fish from the spear, it occurred to the hypothetical ethical investor to short sell Whitehaven Coal shares, which had recently drifted to the ridiculous price of over $1.90 each.

When the shares plunged another 8% to $1.50 on Friday, he closed out 80% of a Livermore-sized position and started making retirement plans.

He has recently departed Sydney to the North of New South Wales where he will take residence in a tree house. From this leafy abode he will start his days with an organic soy latte, and start on exquisitely chosen chilled Chardonnay at around 4.30pm most afternoons. The hypothetical ethical investor is in good health (it’s the yoga), and takes heart from the fact that people like you actually give a damn. He knows he’s lucky, and he wishes you the best of luck for the rest of your lives.

While the above 4 paragraphs are fictional, it is true that there will be no further updates to the Hypothetical Ethical Share Portfolio. It’s over.

The Lorax remains unimpressed with greed.

The Lorax remains unimpressed with greed.

Nothing on this website is advice, ever. The author holds positions in Cryosite Limited ASX:CTE, Vocus Communications Limited, ASX:VOC, 1300 Smiles Limited, ASX:ONT, My Net Fone Limited, ASX:MNF, Bentham IMF Limited, ASX:IMF and Kip McGrath Education Centres Limited, ASX:KME.

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Comments

5 Responses to “The Hypothetical Ethical Share Portfolio Final Update – 10/10/2014”
  1. I’ve just realised the All Ords are actually at 5185.7, not 5185.0 but hey, it’s a weekend and I’ve posted it now. Sorry.

  2. dean says:

    Thanks for the fish.

  3. Kate says:

    Really sorry to hear you’re going. I’ve only just started delving into information gathering on share investing but have an ethical problem with investing in companies who have no environmental conscience and/or are actually doing damage. I had been thinking of joining the Motley Fool and was even wanting to ask them if they could somehow include an ethical rating (be it a rough one) beside their recommendations. DO you think you will be able to make some kind of ethical comment on the shares through Motley Fool cause if so that would seal the deal for joining them for me???

    • Hi Kate,

      I think there may be some inclination for adding something like that if there were enough demand, although ethics can be a controversial area (some are committed to muddying the waters). It would be great to have you on board anyway, as there are discussions of the ethics of the recommendations in the Motley Fool forums, which I think is a real positive. In the meantime, I intend to continue to contribute to those. One way or the other I’ll definitely continue making comments!

  4. Viking says:

    Sad to see you go. Enjoy the soy lattes, Chardonnay and yoga, hope to join you one day!

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