Goldmanchs MLP and Energy Renaissance Fund (Goldmanchs MLP and Energy Renaissance Fund) Predictability Rank

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What is Goldmanchs MLP and Energy Renaissance Fund Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Goldmanchs MLP and Energy Renaissance Fund Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Goldmanchs MLP and Energy Renaissance Fund (Goldmanchs MLP and Energy Renaissance Fund) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Goldman Sachs MLP and Energy Renaissance Fund (NYSE:GER) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

200 West Street, New York, NY, USA, 10282

Website

http://www.gsamfunds.com

Goldman Sachs MLP and Energy Renaissance Fund is a non-diversified, closed-ended management investment company. Its investment objective is to seek a high level of total return with an emphasis on current distributions to shareholders. It invests primarily in the master limited partnership (MLP) and other energy investments.

Executives

Linda Lang	director	C/O JACK IN THE BOX INC, 9330 BALVOA AVE, SAN DIEGO CA 92123
Saba Capital Management, L.p.	10 percent owner	405 LEXINGTON AVENUE, 58TH FLOOR, NEW YORK NY 10174
Boaz Weinstein	10 percent owner	405 LEXINGTON AVENUE, 58TH FLOOR, NEW YORK NY 10174
Akif Irfan	other: Portfolio Manager	200 WEST STREET, NEW YORK NY 10282
Matthew Cooper	other: Portfolio Manager	200 WEST STREET, NEW YORK NY 10282
Kyri Loupis	other: Portfolio Manager	C/O JULIEN YOO, GOLDMAN SACHS, 200 WEST STREET, NEW YORK NY 10282
John F Killian	director	140 WEST STREET, 29TH FLOOR, NEW YORK NY 10007
Lawrence Hughes	director	ONE BOSTON PLACE, BOSTON MA 02108-4407
Steven D Krichmar	director	C/O PUTNAM LLC, ONE POST OFFICE SQUARE, BOSTON MA 02109
Cheryl K Beebe	director	CORN PRODUCTS INTERNATIONAL INC, 5 WESTBROOK CORPORATE CENTER, WESTCHESTER IL 60154
Lawrence W Stranghoener	director	2035 KIMBERLY COURT, PLYMOUTH MN 55447
Ganesh Jois	other: Portfolio Manager	200 WEST STREET, NEW YORK NY 10282
Joseph F Dimaria	officer: Principal Accounting Officer	C/O BANK OF AMERICA INVESTMETN ADVISORS, 100 FEDERAL STREET, BOSTON MA 02110
Ashok N Bakhru	director	C/O GOLDMAN SACHS HEDGE FUND STRATEGIES, 32 OLD SLIP, 9TH FLOOR, NEW YORK NY 10005
Caroline Dorsa	director	BIOGEN INC., 225 BINNEY ST., CAMBRIDGE MA 02142