tparel

Thank you for the reply Fitz! I did some digging and Whale Wisdom seem to calculate and compare the 3 year and 10 year returns of a large selection of funds based on 13F forms. See a link below to their back-testing results: https://whalewisdom.com/dashboard2/search/fund_performance_search A few comments on this: The website states that these back-tested returns are based on data taken 3-5 days after "the most recent" 13F filing deadlines. From the above, I assume that Whale Wisdom, in calculating a fund's return, adjusts each fund's holdings 3-5 days after the 13F filing deadline each quarter. It's not clear to me whether these back-tested returns assume equal weighting of the top 20 stocks owned by each fund or assume the fund's actual weighting. Going into each fund's individual page on Whale Wisdom, and scrolling down to the section titled "Portfolio Performance", it seems that the former may be what has been assumed (see for example the Pershing Square Capital Management page: https://whalewisdom.com/filer/pershing-square-capital-management-l-p). Information on certain well known funds are not included i.e. Mohnish Pabrai's "Pabrai Investment Fund" or Phil Town's "World Funds Trust". I realise that 13Fs 1) only cover US equities, 2) may not list short positions or options and 3) may have a significant delay relative to the trade date, however I would still assume that returns calculated from 13Fs should not be materially different from the actual returns (US equities component) of funds that follow a long only, long-term buy and hold strategy. The returns calculated by Whale Wisdom for investors such as Charlie Munger and Li Lu over the past 3 years, however, are not great. See below the returns published on Whale Wisdom's website for some well known funds over the last 3 / 5 years: Bill Ackman's Pershing Square Capital Management: 3/5 year returns (annualised) = 21.04%/14.27%. Charlie Munger's Daily Journal Corp: 3 year return (annualised) = 4.03%. David Tepper's Appaloosa: 3/5 year returns (annualised) = 10.38%/17.96%. Guy Spier's Aquamarine Capital Management: 3 year return (annualised) = 13.55%. Joel Greenblatt's Gotham Asset Management: 3/5 year returns (annualised) = 16.33%/14.29%. Li Lu's Himalaya Capital Management: 3 year return (annualised) = 3.84%. Stanley Druckenmiller's Duquesne Family Office: 3 year return (annualised) = 22.48%. As a benchmark, the returns of the NASDAQ Composite and S&P 500 over the same period are listed below: NASDAQ Composite: 3/5 year returns (annualised) = 23.5%/24%. S&P 500 with dividends reinvested: 3/5 year returns (annualised) = 18.1%/18.0%. If Whale Wisdom's methodology / calculations are correct, the above results do seem to indicate that a strategy of following the 13F filings of these well known funds would most likely have not outperformed the market at least over the last 3 - 5 years. I'd welcome any further comments or thoughts on the above from The Corner of Berkshire and Fairfax community. Specifically on whether you know of any other sources that track the historical returns of "superinvestors" / high performing funds over different time periods (i.e. 3 / 5 / 10 / 15 / 20 / 30 years)?

Can anyone help with this query?

Does anyone know of a source where we can view the historical returns of so-called “superinvestors” / high performing funds over different time periods i.e. 3 years, 5 years, 10 years, 20 years, 30 years etc. I’m aware of the usual warnings about looking at 13F forms i.e. 1) there is a delay between when the relevant fund moved in and out of positions and the publication of 13Fs, 2) only US equities are included and 3) details about hedging may not be covered. However, I still think that 13F forms of high performing funds are a good source of investment ideas particularly for funds that follow a long only, long-term buy and hold strategy. However, since there are quite a few funds that can be monitored through 13F forms, I do think that focusing only on those that have consistently produced high returns over very long periods of time would be the best strategy.

I don’t think these points apply to the investment newsletters mentioned in the opening post i.e. Nate’s Notes and Investment Advisory Service because: 1) They have beaten the market significantly over many different time periods i.e. 3 years, 5 years, 10 years, 15 years, 20 years etc. so it’s not just good picks early on that have lead to their strong performance. 2) Both of these services have only had one newsletter throughout most of the last 20+ years. I do think your points are valid for other investment newsletters such as the Motley Fool’s Stock Advisor.

Yes, the returns specified in the opening post are from Hulbert’s rankings. My understanding is that investment newsletters pay Hulbert Ratings a fee to be audited. Hulbert Ratings then set up an anonymous subscription so that they can track the returns of the newsletter. Hulbert’s Ratings have been active for 30+ years and since then have been tracking the returns of quite a large selection of investment newsletters / stock-picking services.

It makes sense to me that some talented investors may not want the additional pressure and / or admin associated with managing other people’s money. A newsletter is at the end of the day just advise and the final responsibility on whether to invest or not lies with the subscriber. I can think of many reasons why a good investor may want to publish a newsletter, namely: - If you have found undervalued stocks, it's in your interest for people to find out about this as soon as possible so that your investment appreciates that much more quickly. - Having a community following your stock-picks could facilitate a more rigorous debate on the merits of your picks. This could reveal flaws in your thesis and aspects that you are either not aware of or had not considered. - You receive additional income for you to invest and amplify your returns even further!

Are you able to share which annuals / bi-annuals / investment letters you read?

A number of people recommend The Motley Fool's products such as Stock Advisor. From my research, there does appear to be evidence that the Stock Advisor service has historically outperformed the S&P 500 index over different time periods (see the academic paper titled Evaluating the performance of the Motley Fool’s Stock Advisor™ ), however I do have the following concerns about The Motley Fool / Stock Advisor: - Though Stock Advisor has consistently outperformed the S&P 500 since inception, according to the above academic paper, the strongest out-performance was in the first few years i.e. 2002 - 2006. The out-performance has significantly decreased since then. - The Stock Advisor recommendations are tech heavy so you could argue that the returns of this service should be compared to the NASDAQ Composite which has performed much better during the last 20 years than the S&P 500. I'm not sure if there would still be an out-performance with this comparison. - Motley Fool have a large number of services. My understanding is that many such services have been discontinued following significant under-performance relative to the index. This would imply selection bias which could be a cause for concern! - David Gardner's Stock Advisor picks out-performed his brother, Tom Gardner's, by a lot! David is no longer directly involved in stock-picking, therefore it is unclear how the Rule Breakers team will perform without him.

I've been doing some research into investment newsletters. I know that Hulbert Raings audit a large selection of such services and compare their returns over different time periods. Looking at the results on their website, it is clear that two services stand out, i.e. 1) Nate's Notes and 2) Investment Advisory Service, as having consistently outperformed not only the S&P 500 (by a lot!) but also the Russell 2000, Wilshire 5000 and NASDAQ Composite over different time periods i.e. 3 years, 5 years, 10 years, 15 years and 20 years. See the information below taken from the Hulbert Ratings website: Historical Performance of Nate's Notes (Model Portfolio) / Investor Advisory Service / NASDAQ Composite / S&P 500 (with dividends reinvested): 3 years: 27.6% / 24.5% / 23.5% / 18.1% p.a. 5 years: 24.0% / 25.6% / 24.0% / 18.0% p.a. 10 years: 20.5% / 19.2% / 19.5% / 16.3% p.a. 15 years: 15.0% / 14.8% / 13.8% / 10.9% p.a. 20 years: 15.7% / 13.5% / 11.3% / 9.3% p.a. Nate's Notes focus on companies with the following traits: a compelling growth story, strong financials / balance sheet, a good probability of attracting institutional interest in the future and, positive recent price trends / technical analysis indicators. There is less emphasis on traditional valuation metrics such as PE / PEG ratios, historical revenue / income growth rates or discounted cash flow analyses. Investment Advisory Service on the other hand follow the BetterInvesting methodology which I believe is a value / growth based investment strategy i.e. they consider PE / PEG ratios and do take earnings forecasts etc. into account in their analysis. From my research, Nate's Notes has been published from the beginning (1995) by a single person, i.e. Nate Pile. Also, the Editor-In-Chief of Investment Advisory Service, Douglas Gerlach, has held this position since 2003. So for both of these services, it appears that the key people that contributed to the strong historical performance of these newsletters are still active. Despite their impressive record I don't see these newsletters being discussed on investing forums or many reviews of these services online (i.e. when Google searching "Nate's Notes review" or "Investor Advisory Service review"). What am I missing? Does anyone know the reason for this? Nate's Notes "Model Portfolio" has out-performed the S&P 500 by more than 6% p.a. over the last 20 years and Investor Advisory Service has outperformed by more than 4% p.a. Compounded over 20 years that's a big difference in absolute returns! I realise that many investors, especially on these forums, have the view that we should not rely too much on stock-picking services but rather it's best to learn how to invest yourself and then pick your own stocks following thorough research. My view is that such stock-picking services can be a good compliment to your own research and in the case of these services, potentially an opportunity to learn methods that have consistently outperformed the market over both very long and short time periods. Anyway, the above are my thoughts following some research on investment newsletters. I'm keen to get views on this from the Corner of Berkshire and Fairfax community: particularly on whether the Nate's Notes and / or Investor Advisory Service newsletters are worth following and also potentially on why these newsletters are not widely recommended on investing forums in general. Also, if you know of any other high quality investment newsletters with a consistent long-term track record please do share this!