Model Portfolios
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Can we invest based on the
gurus' recent
stock picks and
holdings? What kind of returns can we expect if we invest based on the
consensus picks of gurus or the
bargain candidates and the stocks many of them hold? What kind of returns can we expect if we buy
the top-ranked stocks?
In order to find out the answers to these questions, we have constructed a few model portfolios based on different criteria. Click on the charts to find out the details and holdings for each of them.
Guru Strategies:
All numbers do not include dividends.
Value Strategies:
All numbers do not include dividends.
Value Strategies:
All numbers do not include dividends.
Top 25 stocks from the Buffett-Munger Screener, 1. These companies are undervalued based pe/g ratio. The portfolio consists of the top 25 most undervalued on the day of rebalance.
Top 25 Undervalued Predictable Companies screened from here. These companies have the best predictabilities, and their stock prices are undervalued in term of pe/g ratio. g is the average editda growth rate of the last 5 years.
Top 25 Historical Low P/S Ratio Companies. These companies have been very predictable in their business operations. Their sales and earnings have consistently grown for at least the past decade. However the price/sales (P/S) ratio of each of these companies is less than 30% above its historical low. The current list of stocks that meet this criteria can be found here.
Top 25 Historical Low P/B Ratio Companies. These companies have been very predictable in their business operations. Their sales and earnings have consistently grown for at least the past decade. However the price/book (P/B) ratios of each of these companies is less than 30% above its historical low. . The current list of stocks that meet this criteria can be found here.
These are the top 25 consensus picks of the Gurus during the most recent quarter. The rank is based on the number of the gurus who bought the stock. All other things being equal, the stocks that the gurus bought in higher concentrations (percentage of portfolio) are ranked higher. The portfolio is updated every 12 months. The current list of stocks that meet this criteria can be found here
Guru Bargains Portfolio: top 25 bargains on the day of portfolio update
Top 25 portfolio from Guru Bargains at the time of rebalance. The current list of stocks that meet this criteria can be found here
These are the most broadly held 25 stocks in Gurus' holdings. The rank is based on the number of the gurus who hold the stock. All other things being equal, the stocks that the gurus hold in higher concentrations (percentage of portfolio) are ranked higher. The portfolio is updated every 12 months. The current list of stocks that meet this criteria can be found here
These are the 25 stocks with the most heavily weighted positions among the combined holdings of the Gurus. The rank is based on the combined positions of the stocks in the Gurus holdings. For instance: if Guru A holds 17% of WMT in his holding, and Guru B holds 5%, and Guru C holds 4%,the combined weighting is defined as 17+5+4=26. The portfolio is updated every 12 months. The current list of stocks that meet this criteria can be found here
Top 25 Historical High P/S Ratio Companies. These companies have predictable business, but traded at historical high P/S ratios. The purpose of
this portfolio is to show that over-valued stocks appreciate less than the undervalued ones.
For details, see New Model Portfolios: Overvalued Stocks
Top 25 Overvalued Predictable Companies. These companies have predictable business, but are over valued as measured by DCF model. The purpose of
this portfolio is to show that over-valued stocks appreciate less than the undervalued ones.
For details, see New Model Portfolios: Overvalued Stocks
If one runs a portfolio by being long on the undervalued stocks and being short the same amount of overvalued stocks, the performance of the portfolio will be decided by the difference in the performances of the undervalued stocks and overvalued stocks. The shorted stocks serve as the market hedge, and the portfolio will be market neutral. The performances of the general market will not affect the returns of the portfolio.
The performance of this hedged portfolio is from the relative performances of the model portfolios of Undervalued Predictable Companies to Overvalued Predictable Companies.
If one runs a portfolio by being long on the undervalued stocks and being short the same amount of overvalued stocks, the performance of the portfolio will be decided by the difference in the performances of the undervalued stocks and overvalued stocks. The shorted stocks serve as the market hedge, and the portfolio will be market neutral. The performances of the general market will not affect the returns of the portfolio.
The performance of this hedged portfolio is from the relative performances of the model portfolios of historical low P/S ratios to the historical high P/S ratios.
Top 25 CEO Buys
Top 25 CFO Buys
Top 25 Insider Cluster Buys
Top 25 CEO Sales
Top 25 CFO Sales
Top 25 Insider Cluster SalesQuestions about how the Model Portfolios were constructed, please the articles listed at the left side menu..
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Comments
The model portfolio simply reflects the result of the screener on January 1 of each year. At yearend, the portfolio is liquidated and the money is invested in the a new set of stocks.
BUT
A stock that was in the portfolio before and shows up in the screener on January 1, is left untouched. It is left to compound. One example is World Acceptance Corporation (WRLD). This stock was bought in 2009 and has been in the model portfolio ever since. The reason for this is that the screener has consistently "recommended" WRLD on January 1 of each year since 2009.
The newsletter does not generate ideas for the model portfolio. It's the reverse. Any stock in the model portfolio has been consistently profitable over many years. The newsletter is low-level analysis of the drivers of past profitability. This should help to understand the sustainability of profitability going forward.
Hope this helps.
Feel free to drop me a message if you have further questions about the newsletter, the portfolio or the screener. You can find my e-mail adress in the newsletter or on my profile on this site.
I am trying to understand how the annual rebalance on the gurufocus model portfolios works. Can you please explain how GuruFocus rebalances at the beginning of the year. For e.g. lets assume we start with 100K and there are 24 stock picks by year end in the Buffett-Munger newletter recommended for 2012, How does Gurufocus determine which stocks to sell from its existing portfolio and which ones to add in Jan?
Thanks for the assistance
Aninda (a premium member)
Actually the problem may be that when you click on the excel download icon the data that comes out is different to the above (in fact there are 30 stocks in teh excel file, not 25 as above).
Why is the new portfolio above different to the results of the Buffet-Munger screener as of today? The screener currently outputs :
ATK
ANSS
ATRI
ATW
BBBY
BIG
BJRI
SAM
BKE
CRR
FCFS
FLIR
FOSL
GD
HSIC
HUM
JOSB
MTD
MTSC
ORCL
PNRA
RL
RAVN
RGLD
TSCO
TYL
VMI
WMT
WAT
WRLD
the equal weighting only applies to new stocks at rebalance. if a stock is still in the portfolio at rebalance, its weighting is not changed.
In the Portfolio the Stockprice is lower ($44.4)
Same for ITT Educational Services Inc.
Is that becouse of the rebalancing on 1st january?
Also, Dionex is not valued at $0.... it was purchased at a value of $118.50/share, per WSJ. (deal completed May 17, 2011)...so the short portfolio is even better that +13% YTD
Avadhut
www.analytics.net.in
Thanks
Based on results, guru bargains seem more like guru mistakes. Though some of the stocks here may have strong upside going forward assuming worst is behind us.
I am new. How are other members using this screen?
Since this portfolio did the best, is there any prior data to see how it performed in other years and how it did in up markets vs down markets.