Long term GuruFocus users are aware that we have created a number of model portfolios over the years. The performances of these portfolios are monitored to see what is working in following Gurus and value investing in general.
As the market concludes the first half of the year with a rough quarter, we are glad to see that all of the model portfolios outperformed the market in the first half. Two of them even delivered positive gain as the S&P500 index lost 7.57% year to date (not including dividends).
These are the details of the performances of the Model Portfolios
|Broadest Owned||-7.33%||0.23%||Aggregated Porfolio|
|Buffett-Munger Top 25||-5.82%||1.75%||Buffett-Munger Screener|
|Guru Bargains||-3.46%||4.11%||Guru Bargains|
|Historical Low P/B Ratios||-1.23%||6.34%||Here|
|Historical Low P/S||0.27%||7.84%||Here|
We like to point out that the model portfolios outperformed the market not only in this year, but also since inception, with the longest since more than 3 years ago, before the crash of 2008. All numbers do not include dividends.
We have 8 model portfolios. Four of them are formed based on Gurus’ portfolios. They are:
- Broadest Held Portfolio: 25 most broadly held stocks in Gurus’ portfolios
- Most Weighted Portfolio: 25 most weighted stocks in Gurus’ portfolios
- Consensus Picks Portfolio: top 25 consensus new picks in Gurus’ portfolios, delivered positive return of 2.26%
- Guru Bargains Portfolio: top 25 bargains on the day of portfolio update
Four others are value strategies that have proven. These are:
- Buffett-Munger Screener top 25: outperformed 1.75% in 6 months
- Top 25 Undervalued Predictable Companies: outperformed 3.52% in 6 months
- Top 25 Historical Low P/S Ratio Companies: outperformed 7.84% in 6 months, delivered positive return of 0.27%
- Top 25 Historical Low P/B Ratio Companies: outperformed 3.63% in 6 months
The portfolios of Top 25 Historical Low P/S Ratio Companies and Top 25 Historical Low P/B Ratio Companies are incepted at the beginning of this year. 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) ratios of these companies are less than 30% above their historical lows. Companies like Lakeland Bancorp Inc. (NASDAQ:LBAI) and Family Dollar Stores Inc. (NYSE:FDO) helped the performance of the portfolio. Each gained more than 33% year to date. The current list of the low Price/Sale stocks can be found here.
This is the performance chart:
Here we like to note the model portfolio of Top 25 Undervalued Predictable Companies. This portfolio was started in Jan. 2009. It delivered an astonishing gain of more than 52% in 2009. We rebalanced it in Jan. 2010, it still holds very well, outperforming again by 3.5%. Since incepted 18 months ago, the portfolio outperformed the market by more than 36%.
This is the performance chart:
Among the stocks owned in this portfolio, Landry's Restaurants Inc. (LNY) and World Acceptance Corp. (NASDAQ:WRLD) were from last year, they have delivered return of 110% and 93%, respectively.
Conclusions: Our model portfolios proved that investors can outperform the market by either following gurus’ most notable picks, or following proven value strategies. These are the links to these strategies:
- Broadest Owned and Most Weighted Guru Stocks: Aggregated Guru Porfolio
- Guru Consensus Picks: Here
- Guru Bargains: Here
- Historical Low P/B Ratios: Here
- Historical Low P/S: Here
- Buffett-Munger Screener
- Undervalued Predictable Companies: Here