CoBF members 2019 returns

[Dynamic]

I answered +15%-<+20% on a USD basis (+18.02% return) - which is the currency I focus on, but I was +13.59% in home currency GBP terms (which has been a rollercoaster currency since mid 2016!). Probably paying the price for coming into 2019 on the back of a sharp uptick in the last week of 2018 that helped me outperform the market that year. Also, a concentrated portfolio is a double-edged sword!

 

Biggest error of omission in 2019 - setting my AAPL buy price around $135 (with a target of about 25% portfolio exposure) in January and thus missing the ride from $142 to $292 (though I thought I had a better alternative prospect, unless the price reached about $135, which didn't pan out as well). I have ample indirect exposure via Berkshire anyway, which will eventually be reflected in Berkshire's price. I lagged the SP500TR by -13.46% overall in 2019.

 

Did very nicely on BAC position around 10% of portfolio over whole year plus some covered put/call writing, but otherwise lagged the market mainly due to BRK.B coming into 2019 fairly high after a strong 2018 and coming out fairly low after KHC write-downs and general pessimism and down-rating of its multiple despite what looks like a pretty strong year fundamentally, especially Q4 by my estimations.

 

4 years of more active management:

 

2019: +18.02% USD / +13.59% GBP / -13.46% vs SP500TR

2018: +25.30% USD / +32.95% GBP / +29.69% vs SP500TR

2017: +24.83% USD / +14.14% GBP / +2.99% vs SP500TR

2016: +24.16% USD / +54.19% GBP / +12.20% vs SP500TR

 

4-yr cagr: +23.35% USD / +27.45% GBP / +8.92% vs SP500TR

 

Prior to 2016, was much more passively managed with little cash added since 2003 and very few trades made. Overall estimated IRR since 2003-ish weighted according to timings of added cashflows ~=

XIRR: +13.17% USD / +14.47% GBP / +2.22% vs SP500TR.

 

XIRR includes all frictional costs including witholding tax on US dividends, but not capital gains tax, though a small capital gains tax bill will soon be due on 6 Apr 2018 -5 Apr 2019 tax year's unsheltered gains, which exceeded the combined generous UK CGT allowances of myself and my spouse for the first time but is only taxed at 10% of gains above that, or 20% maximum if we gain enough to put us into the top tax bracket. Most of portfolio had previously been tax-sheltered in ISA and unsheltered gains within CGT limits. XIRR also based on approximate reconstructed valuations in early 2003, some historical prices not being available to me due to old investments being taken private. If I include 1999-2003, I had losses before I really understood GARP/value investing that would reduce my outperformance modestly.

 

Notional SP500TR comparison assumes I bought or sold at total-return index closing price on days when cash was added to or removed from brokerage accounts (but not when transferred between them) and assuming no frictional costs such as tax on dividend distributions.

[Spekulatius]

I have various accounts and my overall estimate is close to 30% return. Stock picking was so so, but some trading around (DD, CTVA, NOW, AMZN etc) really helped. The setup this year was pretty good with the decline in fall 2018, similar to 2015. If I could settle this year for an 8% return, I would take it.

[hillfronter83]

Did around 18% overall. Interesting that my taxable account where I did less trading was up about 40%. In hinder sight, made several unforced errors trying to "speculate" for quick profits that backfired.

 

This board certainly made investing a lot more fun. Thanks and wish everyone good luck in 2020!

[Dynamic]

I find it interesting that in most years, the mode and median of the distribution of returns from the voting histogram appear to be (currently) very close to the S&P500 Total Return, with a fair spread above and below and a few notable outliers with very high or very low returns in an individual year. This gives some confidence that this anonymous self-reporting is relatively close to reality. I think I've noticed relatively similar things in previous years' polls.

 

Obviously, it's relatively rare to consistently beat the market by more than 5% or 10% year after year (one or two bins in the histogram), but 5-10% annually represents an enormous outperformance over a decade or two, so it doesn't mean that CoBF members don't tend to beat the market by a lot in the long run.

 

We have a lot of people making different decisions, with different time horizons and strategies, some who pay no attention to market price from year to year, and we tend to be pretty well clustered around the market return and close to normally distributed. I suspect a lot of that expected randomness is caused by the relatively short time span of 1-year where the random walk of market multiples and sentiment is more dominant than any long-term outperformance trend. If people had a record of their 3-year, 5-year or 10-year market value returns, I suspect we'd only then start to see whether CoBF members have a marked advantage or disadvantage compared to the market, though then the methodology can also influence the returns reported (e.g. how do you account for money added or removed from the portfolio or for dividends). I know one or two of the members here don't track it, and are quite content with just a vague estimate for their returns, which they continue to knock out of the park by such a margin that dividends and cash movements really don't matter.

 

It would also be interesting to see if the spread is tighter over longer time-frames and whether there are consistent outliers who regularly post 35%+ annualised returns or more or whether most of the 1-year outliers are highly concentrated and volatile, alternating randomly between +50% and -30% and end up averaging closer to market returns in the longer term.

[Jurgis]

If people had a record of their 3-year, 5-year or 10-year market value returns, I suspect we'd only then start to see whether CoBF members have a marked advantage or disadvantage compared to the market, though then the methodology can also influence the returns reported (e.g. how do you account for money added or removed from the portfolio or for dividends). I know one or two of the members here don't track it, and are quite content with just a vague estimate for their returns, which they continue to knock out of the park by such a margin that dividends and cash movements really don't matter.

 

It would also be interesting to see if the spread is tighter over longer time-frames and whether there are consistent outliers who regularly post 35%+ annualised returns or more or whether most of the 1-year outliers are highly concentrated and volatile, alternating randomly between +50% and -30% and end up averaging closer to market returns in the longer term.

 

You can start a 3/5/10 year return poll.  ;)

 

My previous simplified polls:

https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/performance-vs-index-5-years/msg260236/#msg260236

https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/performance-vs-index/

 

 

[John Hjorth]

If people had a record of their 3-year, 5-year or 10-year market value returns, I suspect we'd only then start to see whether CoBF members have a marked advantage or disadvantage compared to the market, though then the methodology can also influence the returns reported (e.g. how do you account for money added or removed from the portfolio or for dividends). I know one or two of the members here don't track it, and are quite content with just a vague estimate for their returns, which they continue to knock out of the park by such a margin that dividends and cash movements really don't matter.

 

It would also be interesting to see if the spread is tighter over longer time-frames and whether there are consistent outliers who regularly post 35%+ annualised returns or more or whether most of the 1-year outliers are highly concentrated and volatile, alternating randomly between +50% and -30% and end up averaging closer to market returns in the longer term.

 

You can start a 3/5/10 year return poll.  ;)

 

My previous simplified polls:

https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/performance-vs-index-5-years/msg260236/#msg260236

https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/performance-vs-index/

 

This is indeed an interesting discussion! - Thanks Dynamic & Jurgis! [ : - ) ],

 

As I already mentioned in one of my early posts in this topic, this topic & the poll contained in it is "just for fun", - for more than one reason:

 

1. Polls are indeed fun - because they "trigger" posts from people with low posting frequency [who have done well],

2. The sharing of experiences shed lights on details that have been going on, that perhaps have been outside of the general scope of the discussions going on here on CoBF,

3. The sharing of approaches and lines of thinking - no matter the time horizon - to me always provide some useful insights to relate to. [it doesn't mean we all have to engage individually],

4. Outlier returns are not to be underestimated [if, negative, they can actually take you out of the game - almost for good, with no real possibility to recover, if really bad, or, if positive, they can provide some laurels to rest on, perhaps at least for a period].

 

- - - o 0 o - - -

 

In short, I'll take on to set up those 3/5/10 years returns polls here on CoBF! - I'll just need some time to do it.

[TwoCitiesCapital]

2015: ~(20)%

2016: 24.7%

2017: 25.9%

2018: (-14.1%)

 

 

2019: 25.5%

 

Results are consolidated across varying accounts with varying discretion (i.e. limitations on investment options in 401k and HSA and etc).

 

Satisfied with results even with relative underperformance. I spent most of the year holding/trading long puts on the SPY which cost me ~1.5-2% in total and was also ~35-40% bonds/cash for the last half of the year reducing the impact of the Q4 rally to new highs. So lower returns, but dramatically lower risk IMO.

 

Performance driver largely the same as prior years going back to 2015:

 

Massively long EM, commodity producers, and non-USD stocks. Each of those positions were reduced through 2019 to realize gains, add bonds, and roll puts.

 

Best performing positions in no particular order

 

FMCCJ (~10% weight)

Sberbank (~8% weight)

Gazprom (~5% weight)

Exor (~6% weight)

 

Zillow (~2% weight)

OZM/SCU (~1% weight)

Sibanye Gold (~1% weight)

 

 

 

 

 

[Dynamic]

In short, I'll take on to set up those 3/5/10 years returns polls here on CoBF! - I'll just need some time to do it.

 

Absolutely no rush on this. You could present the options as both annualised and total return.

 

e.g. over 5 years, >=8.0 to <10.0% annualised would be 46.9%-61.1% total

 

(1.08^5 - 1)*100 = 46.9% ; (1.10^5 - 1)*100 = 61.1%

 

Maybe aim for 2% width poll options within +/- 14% of the SP500TR annualised return, then widen out to 5% bin widths then 10% for the more extreme outliers as you deviate very far from the index return. I'd anticipate that many of the typical results would be clustered fairly tightly on an annualised basis as the holding period extends and randomness gives way to skill, so we'd need smaller bin widths anywhere in the vicinity of the index to get a decent picutre, but that some of the outliers would have extreme difference from the index by sustaining exceptional outperformance or potentially even underperformance.

[gjangal]

48.08% XIRR for the year.

 

I have a 10 year record now of 17% CAGR total return. I have been lucky with some picks. I use no leverage whatsover. Only compounder type stocks and mostly buy and hold till thesis holds true. If i make a mistake or thesis is wrong i sell out. I also don't do very deep analysis, a few basic checks and some research around the managers. I typically like founder run stocks

 

Good amount of learning in this decade, i am thankful for this community for helping me learn. Hope to contribute more than i do now

 

2019 -  48.08%

2018 -  2.34%

2017 -  26.38%

2016 -  0.09%

2015 -  11.71%

[Saluki]

Silly question but does anyone have a good software tool or plugin to calculate this?  I add to my account throughout the year, so it's not a straightforward calculation.  I know IBKR has a tool for calculating your return vs SP500 over time, but my brokerage account does not (and I can't switch to IBKR because of a work conflict). 

[Jurgis]

Silly question but does anyone have a good software tool or plugin to calculate this?  I add to my account throughout the year, so it's not a straightforward calculation.  I know IBKR has a tool for calculating your return vs SP500 over time, but my brokerage account does not (and I can't switch to IBKR because of a work conflict).

 

For anyone with multiple accounts and a lot of adding/subtracting you pretty much have to use Quicken. But that's heavyweight and not worth it unless you use it to track all your finances. On the positive side though, you can have results for 10+ years and then do a lot of analyses (per account, per securities, etc.). I have ~25 years of financial info in Quicken.

 

For people who don't do much adding/subtracting, you can do it by hand in Excel or Google Sheets or whatever spreadsheet you use. You can also do stuff in various programming languages/packages for programming inclined who might be slurping data in from some source.

[LC]

You can use excel but have to manually enter monthly balances and cash inflows/outflow per account, then combine to calculate IRR. It’s a pain so I just do it for the largest accounts.

[EliG]

Silly question but does anyone have a good software tool or plugin to calculate this?  I add to my account throughout the year, so it's not a straightforward calculation.  I know IBKR has a tool for calculating your return vs SP500 over time, but my brokerage account does not (and I can't switch to IBKR because of a work conflict).

 

Take a look at Bogleheads spreadsheet. It calculates time-weighted and money-weighted returns for up to 20 accounts.

 

https://www.bogleheads.org/wiki/Calculating_personal_returns

 

[Dynamic]

Silly question but does anyone have a good software tool or plugin to calculate this?  I add to my account throughout the year, so it's not a straightforward calculation.  I know IBKR has a tool for calculating your return vs SP500 over time, but my brokerage account does not (and I can't switch to IBKR because of a work conflict).

 

The simplest way of getting roughly right answers for one year returns when you're adding money is using the following three figures:

 

A = money added during year (negative if money withdrawn)

 

S = starting valuation (31 Dec 2018 closing prices)

 

E = ending valuation (31 Dec 2019 closing prices)

 

ReturnX = ( (E - A) / S) - 1

This return is a fraction. Multiply by 100 to get a percentage.

 

ReturnY = ( E / ( S +A ) ) - 1

This return is a fraction. Multiply by 100 to get a percentage.

 

Return = 0.5 * ( ReturnX + ReturnY )

I.e. the average of the two calculations

 

ReturnX is the return assuming all the money was added on the last day of the year.

 

ReturnY is the return assuming all the money was added on the first day of the year.

 

Taking the average of the two is pretty accurate for typical spread of cash additions.

 

I've compared this to XIRR based on all my account ledgers and it's accurate enough.

 

For example if you started with $90,000 and added $10,000 and finished with $120,000 the calculation is:

 

A= 10,000

S= 90,000

E= 120,000

 

ReturnX = ( (120,000 - 10,000) / 90,000 ) - 1

= (110,000 - 90,000) - 1

=1.222222 - 1

=0.222222

This is 22.2222%

 

ReturnY = (120,000 / (90,000 + 10,000) ) - 1

=(120,000 / 100,000) - 1

=1.200000 - 1

=0.200000

This is 20.0000%

 

The average is 21.11%

 

That's accurate enough to answer this survey unless you know the cash inflows were heavily weighted to one end of the year.

[bennycx]

With leverage, gains 55%

Without leverage, gains 32%

Gains came from DVMT arbitrage (end 2018), AXP, USB and CFR (lucky to buy at 80+ levels, now stands at 40% of portfolio)

[Hielko]

Interesting to see that results on COBF are sort of distributed normally (as expected), but that the mean/average of this years returns seems to be significantly below the index with the most people having a 20-25% outcome, not one, but two steps below the option that includes the index return.

[JRM]

Interesting to see that results on COBF are sort of distributed normally (as expected), but that the mean/average of this years returns seems to be significantly below the index with the most people having a 20-25% outcome, not one, but two steps below the option that includes the index return.

 

I think risk adjusted return is much more important for comparison than absolute return over one year.  I could have levered up and gone 120% long SPY and sold puts on the SPY and generated "alpha" but I took on considerable risk.  Maybe somebody generated 20% but had 30% in cash or hedged.

[Jurgis]

Interesting to see that results on COBF are sort of distributed normally (as expected), but that the mean/average of this years returns seems to be significantly below the index with the most people having a 20-25% outcome, not one, but two steps below the option that includes the index return.

 

I think risk adjusted return is much more important for comparison than absolute return over one year.  I could have levered up and gone 120% long SPY and sold puts on the SPY and generated "alpha" but I took on considerable risk.  Maybe somebody generated 20% but had 30% in cash or hedged.

 

You are right on the general level. But IMO apart from very clear situations of straight levering or holding cash it's pretty impossible to say how much risk someone is taking and how to adjust the return for that risk.

 

Edit: Actually, I'd say that even in clear situation of holding cash, "risk adjusted return" is somewhat misleading. Ultimately, investor cannot eat "risk adjusted return". Whatever return they lost due to holding cash is lost. Yeah, they might have reasons to hold cash to improve future returns or to sleep well at night, but I think they have to careful not to think that high "risk adjusted return" is somehow real return.

[Spekulatius]

I find it interesting that so many people use leverage 10 years into a bull market. I was aggressive up to 2012, then again in late 2015 and at the end of 2018 but now I try to keep a healthy amount of cash to be able to pounce whenever I see some great setups.

[SafetyinNumbers]

I have always avoided leverage but find there are too many opportunities to sit in cash.

 

Usually when I feel this way, my portfolio is about to get a rude awakening.

[clutch]

Interesting to see that results on COBF are sort of distributed normally (as expected), but that the mean/average of this years returns seems to be significantly below the index with the most people having a 20-25% outcome, not one, but two steps below the option that includes the index return.

 

I think risk adjusted return is much more important for comparison than absolute return over one year.  I could have levered up and gone 120% long SPY and sold puts on the SPY and generated "alpha" but I took on considerable risk.  Maybe somebody generated 20% but had 30% in cash or hedged.

 

Only times I hear "risk adjusted return" is when a money manager justifies his lackluster performance due to holding too much cash. They never mention this when the performance is the other way around.

[Gregmal]

Interesting to see that results on COBF are sort of distributed normally (as expected), but that the mean/average of this years returns seems to be significantly below the index with the most people having a 20-25% outcome, not one, but two steps below the option that includes the index return.

 

I think risk adjusted return is much more important for comparison than absolute return over one year.  I could have levered up and gone 120% long SPY and sold puts on the SPY and generated "alpha" but I took on considerable risk.  Maybe somebody generated 20% but had 30% in cash or hedged.

 

Only times I hear "risk adjusted return" is when a money manager justifies his lackluster performance due to holding too much cash. They never mention this when the performance is the other way around.

 

Yup lol. Holding cash through 2019 was the WRONG move. Pretty black and white. Not really an honest way to rationalize it.

[wabuffo]

Interesting to see that ... the mean/average of this years returns seems to be significantly below the index with the most people having a 20-25% outcome, not one, but two steps below the option that includes the index return.

 

Hielko - not terribly surprising.  I think there are two reasons:

 

1) The average stock underperformed the big market-cap weighted indices (the FAANG influence).  I would guess the COB&F stock pickers are value pickers and generally are underinvested in FAANG. 

 

One way I measure the annual return of the average stock is to take a squint at the Wilshire Equal-Weight Indices.  The Wilshire Equal-Weight 5000 Index had a 28.9% return in 2019 (vs 31.05% for the S&P 500 Total Return).  So basically a bunch of monkeys throwing darts at the WSJ stock pages underperformed the S&P but still edged out the average COB&F value investors in 2019 by the looks of the self-reported survey.

 

2) The other factor that I think comes into play is BRK's underperformance.  Just like the COB&F value investors are underinvested in FAANG, they are probably overinvested in BRK and BRK underperformed the indices by a lot this year (e.g., BRK-B had a 10.9% annual return vs 31.05% for the S&P 500 TR).

 

wabuffo

[Guest cherzeca]

"2) The other factor that I think comes into play is BRK's underperformance.  Just like the COB&F value investors are underinvested in FAANG, they are probably overinvested in BRK and BRK underperformed the indices by a lot this year (e.g., BRK-B had a 10.9% annual return vs 31.05% for the S&P 500 TR)."

 

agree, which is why I like to keep things simple with SPY for my non speculative stock portfolio.  balanced with >50% cash and 20% speculative equity

 

[JRM]

Interesting to see that results on COBF are sort of distributed normally (as expected), but that the mean/average of this years returns seems to be significantly below the index with the most people having a 20-25% outcome, not one, but two steps below the option that includes the index return.

 

I think risk adjusted return is much more important for comparison than absolute return over one year.  I could have levered up and gone 120% long SPY and sold puts on the SPY and generated "alpha" but I took on considerable risk.  Maybe somebody generated 20% but had 30% in cash or hedged.

 

Only times I hear "risk adjusted return" is when a money manager justifies his lackluster performance due to holding too much cash. They never mention this when the performance is the other way around.

 

Yup lol. Holding cash through 2019 was the WRONG move. Pretty black and white. Not really an honest way to rationalize it.

 

I'm not complaining.  I had over 20% cash at the end of the year and still beat most indexes.  I've already invested half of that cash, so its somewhat irrelevant.  The type of risk adjusting I'm talking about is difficult to quantify, but you probably already knew that.