|New Threads Only:|
|New Threads & Replies:|
Forum List » Guru News and Commentaries|
Guru News, Stock picks and commentaries
Model Portfolio Review – March 4, 2014
Posted by: Vera Yuan (IP Logged)
Date: March 4, 2014 04:24PM
In the recent five years, the S&P 500 gained 24.71% in 2009, 11.65% in 2010, 0% in 2011, 12.1% in 2012, and 31.8% in 2013. The market performance looks good. Could investors make more money by investing in GuruFocus Model Portfolios? It is time to check the performances. The following are the details of the performances of the four value strategies:
Value Strategies (Long):
* All numbers do not include dividends.
U.S. stock market had an excellent 2013. The market benchmark S&P 500 went up 31.8%, which is the highest since the financial crisis. Our portfolio of Top 25 Historical Low P/B Ratio Companies even outperformed the S&P 500 by 1.38%.
In 2014, up to now, the market went down a little bit. Despite that, both our portfolios of historical low P/S and historical low P/B ratios outperformed the market benchmark S&P 500 by around 5%. The performances of the portfolios of Buffett-Munger Screener Top 25 and Top 25 Undervalued Predictable Companies were about even with the market.
Both of the portfolios of Buffett-Munger Screener Top 25 and Top 25 Undervalued Predictable Companies were started in January 2009. In 2009 and 2010, Buffett-Munger Screener outperformed the market by around 4% and 8%. In 2011, the market was even, yet Buffett-Munger Screener outperformed the market by 6.01%. In 2012 and 2013, Buffett-Munger Screener was about even with the S&P 500. In 2014, it was also about even with the market. From the above performance figure, GuruFocus can be proud to say that Buffett-Munger Screener Top 25 outperformed the market almost every year.
Regarding the Top 25 Undervalued Predictable Companies, the portfolio gained 55.72% and 20.17%, respectively, in 2009 and 2010, almost double the return of the S&P 500 in that period. However, from 2011 to 2013, the portfolio Top 25 Undervalued Predictable Companies underperformed the market. In 2014, it outperformed the S&P 500 by 0.33%. In all, since inception, Buffett-Munger Screener Top 25 outperformed the S&P 500 by 28.32%. The portfolio of Top 25 Undervalued Predictable Companies outperformed the market by 29.74%, even higher than the Buffett-Munger Screener.
Without any doubt, Warren Buffett (Trades, Portfolio)’s investment strategy is the most successful ever. He believes that to buy companies with “predictable and proven” earnings can be very profitable in stock market investing. Based on his strategy, GuruFocus develops "Buffett-Munger Screener," which helps to find companies with high quality business at undervalued or fair-valued prices:
Both Buffett-Munger Screener and Top 25 Undervalued Predictable Companies select stocks from the companies that have the highest predictability rank. Top 25 Undervalued Predictable Companies Portfolio selects the stocks that are undervalued from DCF calculations. For the current list of undervalued predictable companies, go to the screener. For the current list of good companies at fair or undervalued price for Buffett-Munger screener, click here.
The other two model portfolios are for predictable companies that are traded at historical low P/S and historical low P/B ratios, respectively. Both of these two portfolios outperformed the market average in 2010, 2012 and 2014, but about even with the market in 2011. The portfolio of historical low P/B ratios outperformed the market by 1.38% in 2013, while the portfolio of historical low P/S slightly underperformed the S&P 500 by 2.2% in 2013. In all, since inception, historical low P/S outperformed the S&P 500 by 19.01%. The portfolio of historical low P/B ratios outperformed the S&P 500 by 22.78%. Please go to historical low P/S ratios and historical low P/B ratios for the complete stock lists.
From above analysis, we can see for a single year, the performance of our portfolios may not beat the market, yet in the long run, it is profitable to invest using our model portfolios.
These are the summaries of the four value strategies mentioned above:
Stocks Discussed: SPY, DJI, QQQ,
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.