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All Model Portfolios Have Been Rebalanced

January 02, 2011

All GuruFocus model portfolios have been rebalanced. As always, we rebalance these portfolios during the New Year holidays, and the prices that are used for rebalances are the close prices of the stocks on the last trading day of the previous year.

We have two types of model portfolios, one is based on gurus’ portfolios. We call these Guru Strategies. The performances of these portfolios are below.

Guru Strategies:

All numbers do not include dividends.

Year S&P 500 Consensus Picks Portfolio Guru Bargains Portfolio Most Broadly Held Portfolio Most Weighted Portfolio
2006 11.8% 15.8% 22.1%
2007 3.5% 9.1% 15.4% -6% -1.9%
2008 -38.5% -45.4% -48.8% -29.6% -34%
2009 23.5% 34.7% 36.4% 42.3% 41.8%
2010 12.8% 16.4% 15.1% 9.7% 15.1%
Screener Links Screener Here Screener Here Screener Here Screener Here

Among the 8 model portfolios we had for 2010, Most Broadly Held Portfolio underperformed the market in 2010. All other model portfolios outperformed the S&P500.

The broadest owned model portfolio is composed of the stocks that are most popular among gurus. We do not consider the weightings of the position in the gurus’ portfolio. However, this portfolio underperformed the market 2 out the 5 years since incepted. Since inception, the portfolio outperformed the market by about 20%.

The most weighted portfolio outperformed the S&P500 4 out of the 5 years since inception. It gained about 30% more than S&P500 since incepted. This portfolio consists of the 25 stocks that have the highest weightings among the gurus’ portfolios.

The Guru Bargain portfolio and Guru Consensus portfolio outperformed the benchmark 3 out of the 4 years of lifetime. But both of the portfolios underperformed the market since inceptions.

We have also created a group of portfolios that are based on proven value strategies. This is their performances:

Value Strategies:

All numbers do not include dividends.

All of the value strategies outperformed the market by good margins in 2010. Among those, the portfolio of undervalued predictable companies did the best. It gained 19.4% without counting dividends. The portfolio of historical low P/S stocks gained 19.1% without counting dividends.

A reminder here. You can invest in these strategies by following the DIY Guide on How to Invest With Value Strategies. If you consider investing in these strategies, this is a good time to get started.

Top 25 Undervalued Predictable Companies screened from here. These companies have the best predictabilities, and their stock prices are undervalued the most relative to their intrinsic values calculated with DCF Model.

Top 25 Historical Low P/S Ratio 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 these criteria can be found here.

The current rebalanced portfolio are the top 25 stocks in the respective screeners. Some of the stocks from earlier remained. For details, go to Model Portfolios.

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 2.3/5 (18 votes)


AlBenioff - 7 years ago    Report SPAM
How do I find a listing for the model portfolio for Micro-Caps?
Tradingaccount03 - 7 years ago    Report SPAM
I see the stocks/shares in each model portfolio but cannot find anywhere it explains how specifically they determined the number of shares for each stock.

I''be been looking in different areas on the website and would like to know if there is an explanation (within either the subscription or freely accessible pages) on specifically how the individual stock constituent weighting rules work from original construction and any balancing (which I gather is only once per year) over time ?

Please leave your comment:

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