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Buffett-Munger Model Portfolio Up 14.4%; All Positions Gained

May 02, 2011 | About:

GuruFocus Buffett-Munger Model Portfolio is up 14.4% year to date, without counting dividends. All positions in the portfolio gained.

Buffett-Munger Model Portfolio contains the top 25 stocks on the beginning of the year from the Buffett-Munger Screener. The 14.4% year to date is after a 27% gain in 2009 and 21.1% in 2010. The "Buffett-Munger Screener" can be used to find the stocks that young Warren Buffett and Charlie Munger would invest:

1. Companies that have high Predictability Rank, that is, companies that can consistently grow their revenue and earnings.

2. Companies that have competitive advantages. It can maintain or even expand its profit margin while growing its business

3. Companies that incur little debt while growing business

4. Companies that are fair valued or under-valued. We use PEPG as indicator. PEPG is the P/E ratio divided by the average growth rate of EBITDA over the past 5 years.

All of the positions in this portfolio gained. Leading the gain is World Acceptance Corp. (WRLD), which gained 241% since added into the portfolio in 2009.

This is the portfolio details:

This is the complete portfolio of the portfolio:

(Current Value: $175,949. Invested: $100,000 on December 31, 2008)


Symbol Company # of Shares Bought on Share Cost Current Price Change Value ($)
CASH Cash 221.15 12/31/1969 1 1 0 221.15
ADM ARCHER DANIELS MIDLAND CO 199 01/01/2011 $30.08 37.02 +23.07% 7,367
ANSS ANSYS Inc. 115 01/01/2011 $52.07 54.67 +4.99% 6,287
ASNA Ascena Retail Group Inc. 227 01/01/2011 $26.42 30.82 +16.65% 6,996
BCR C.R. BARD INC. 65 01/01/2011 $91.77 106.75 +16.32% 6,939
BDX BECTON DICKINSON AND CO. 71 01/01/2011 $84.52 85.94 +1.68% 6,102
CHD CHURCH & DWIGHT CO. INC. 71 01/01/2009 $56.12 82.48 +46.97% 5,856
CHRW C.H. Robinson Worldwide Inc. 72 01/01/2009 $55.03 80.15 +45.65% 5,771
CPRT Copart Inc. 141 01/02/2010 $36.62 44.95 +22.75% 6,338
ESI ITT EDUCATIONAL SERVICES 94 01/01/2011 $63.69 71.74 +12.64% 6,744
EXPO Exponent Inc. 160 01/01/2011 $37.54 41.94 +11.72% 6,710
FCFS First Cash Financial Services Inc. 194 01/01/2011 $30.99 38.83 +25.3% 7,533
FDS FactSet Research Systems Inc. 78 01/02/2010 $65.87 109.41 +66.1% 8,534
HRL HORMEL FOODS Corp. 268 01/02/2010 $19.225 29.41 +52.98% 7,882
JJSF J & J Snack Foods Corp. 124 01/01/2011 $48.24 50.49 +4.66% 6,261
MCRS MICROS Systems Inc. 137 01/01/2011 $43.86 51.86 +18.24% 7,105
NVS NOVARTIS AG 102 01/01/2011 $58.95 59.17 +0.37% 6,035
PRSP Prosperity Bancshares Inc. 153 01/01/2011 $39.28 45.44 +15.68% 6,952
PRXL PAREXEL International Corp. 283 01/01/2011 $21.23 27.02 +27.27% 7,647
RY ROYAL BANK OF CANADA 114 01/01/2011 $52.36 62.96 +20.24% 7,177
SIAL SigmaAldrich Corp. 90 01/01/2011 $66.56 70.53 +5.96% 6,348
TECH Techne Corp. 75 01/02/2010 $68.56 77.67 +13.29% 5,825
VAR VARIAN MEDICAL SYSTEMS INC. 86 01/01/2011 $69.28 70.2 +1.33% 6,037
WAT WATERS CORP 77 01/01/2011 $77.71 98 +26.11% 7,546
WMT WALMART STORES INC. 111 01/01/2011 $53.93 54.98 +1.95% 6,103
WRLD World Acceptance Corp. 202 01/01/2009 $19.76 67.49 +241.55% 13,633
Total Market Value: $175,949; Cost: $100,000; Change: 75.95%


We can see the gains are quite even across the board. Since incepted in 2009, the portfolio has gained 76%. In the same period, S&P 500 gained 50%.

From the back testing study from 1998-2008 we have found strong correlations between the Predictability of Businesses and the long-term return of stocks. The group of undervalued highly predictable companies performed the best. This group had an annualized gain of 20%, while the market just averaged 2.7% a year.

For details, go to: What Worked In The Market From 1998-2008? Part II. Under-Valued Predictable Companies And Buffett-Munger Screener.

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Rating: 3.4/5 (17 votes)

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