Board Performance Poll

[Parsad]

I'm of the opinion that the majority of board members on this message board have outperformed the S&P500 Total Return over the last 3 years...July 1, 2007 to June 30, 2010.  The S&P 500 Total Return during that period was a cumulative -9.813%. 

 

That would be completely contradictory to the performance of the average investment manager or the average private investor.  Please respond with either "Yes...I did beat..." or "No...I did not beat...".  Cheers!

[beerbaron]

95% Above S&P 500... This is an outlier result.

 

I wonder if a Technical analisys board would get the same results... lots of people will say they outperform if they adjust X and Y because of reason Z.

 

BeerBaron

[Parsad]

I suspect we would have an outlier result at 5 years and 10 years as well.  Although that number would probably drop.  I'm quite certain that an unlikely percentage (unlikely to any efficient market theorist) would outperform the S&P500 Total Return over the long run.  Cheers!

[dcollon]

It speaks volumes about the people you have been able to attract to this board Sanjeev.  Although the cynic it me would love to see who among those saying they outperformed have verifiable results.  It would still probably be a very high number.

[Sullivcd]

No doubt Mr. Watsa contributed substantially to the outperformance figure.

[zarley]

This poll made me go double check my results -- I was surprised by the answer.  I knew that I had outperformed the market over the last three years, but I was a little surprised by the level of outperformance (a cumulative gain of approximately 35%). 

 

Given the relative performance of Berkshire and Fairfax over the time period in question, it shouldn't be surprising that a ton of people on this board have outperformed.  Both holdings have certainly helped my own performance.  Although, neither company was the most profitable investment I've made over the past three years.

[Parsad]

No doubt Mr. Watsa contributed substantially to the outperformance figure.

 

Probably partially, but I think the majority of those that outperform, would be able to do it over longer periods and without Fairfax.  This argument is sort of the same one people use from time to time against Sequoia, but at the end of the day, they were just smart enough to hold on to Berkshire...that takes a certain amount of aptitude, since thousands, perhaps hundreds of thousands that owned the stock sold at some point.  Cheers!

[NormR]

Would that be in USD or CAD?  Oh wait, doesn't matter.  :D

[Packer16]

Do you want to ask the next question by how much?

 

Packer

[rmitz]

Do you want to ask the next question by how much?

 

Packer

 

Not nearly as much as I would have if I hadn't needed to learn two lessons at the beginning of the downturn: 1) Don't just invest on coattails (do your own due diligence--always--and try to kill the idea) and 2) don't go crazy with leverage.  My results were only +3.6% over that time period because of those mistakes...and very volatile.  Though honestly (2) was the bigger lesson.  My performance has continued to improve past that end date though. :)

[beerbaron]

There are many ways to calculate returns. Accountant will tell you that the only real way is the IRR. Which is partially true, but let's assume the following Scenario.

 

Board member has 10k in his bank personnal account and 20k in his investment account. March 2008 arrives and the board member invests it's 10k into S&P 500. Did the money really arrive in the trading account on March 2008... that leaves place to discussion...

 

Personnally, I like to check my return with IRR and by the simplest calculation wich is

 

(Value Dec 31st)/(Value Jan 1st)-Cash inflows  This method discounts all the time value of the added money but it kinds of gets out the problem stated above.

 

I believe real results on a personnal portfolio are somewhere between both results.

 

I'm very happy with the results for both metrics tough :)

 

BeerBaron

[Parsad]

Do you want to ask the next question by how much?

 

No that area becomes too grey, because you never take into consideration exactly what level of risk people exposed themselves to during a short period of time.  Were they fully concentrated in one stock?  One sector...commodities?  Was a considerable portion of their portfolio in short positions?  Did anyone use leverage?  How much cash were they holding?  How much was in fixed income instruments?  What percentage achieved those results holding many positions?

 

But if you take a large sample, and those results prove to be an outlier over a longer period of time (ten years plus), then you start to prove that a specific subsection may have a certain temperament, consistency in execution of their respective framework, and it is probably less likely to be a matter of luck.  Cheers!

[alwaysinvert]

If you look at my performance since I starting saving/investing in july 2008, I am +66% from net inflow on my broker's account compared to my benchmark index at +27%. This although I only bought index and mutual funds for about the first 4-5 months, and only later changed to a value approach. I owned funds for the most part until the summer of 09. Also 2/3 of my capital influx came only after the lows of the spring of 09, and 1/3 as late as this year.

 

So yes, considering that I'm still very much a newbie and was not fully invested all the way through, I'm extremely happy. Even though the comparence gives huge room for statistical flukes because of the time span. I wouldn't like to think of the opportunity cost of me not reading Peter Lynch and Ben Graham 6 months earlier. On the other hand maybe investing wouldn't have caught my attention as well without the events of september 08 to go with.

 

edit: and if this was too much information, I apologise ;)

[ERICOPOLY]

No doubt Mr. Watsa contributed substantially to the outperformance figure.

 

Probably partially, but I think the majority of those that outperform, would be able to do it over longer periods and without Fairfax.  This argument is sort of the same one people use from time to time against Sequoia, but at the end of the day, they were just smart enough to hold on to Berkshire...that takes a certain amount of aptitude, since thousands, perhaps hundreds of thousands that owned the stock sold at some point.  Cheers!

 

A lot of my outperformance was due to Fairfax.  I give them the credit because they chose the underlying investments (largely the CDS) that went up and delivered gains while the markets tanked.  

 

It's a bit like if I'd put a large percentage of my net worth in Paulson's fund -- yes, it would have taken some degree of aptitude to select him, and some nerve to hold on, but can I count the performance as my own?  At some point it's the fund manager that really generated the results.

 

[twacowfca]

Know when to hold 'em.

Know when to fold 'em.

Know when to walk away.

Know when to run.

 

You never count your money

when you're sitt'n at the table.

There's plenty of time for count'n

when the dealing's done.  :)

 

 

[Uccmal]

This poll tells you only thing with any degree of accuracy, assuming of course that everyone is honest. 

 

It tells you that the majority who have voted beat the S&P 500 in the last three years.  There is an inherent bias to report ones results when they are outsize rather than undersize.  The only way to determine the actual perfomance of board members (assuming honesty again) would be to force all members in Sanjeev's list to report their results. 

 

All that being said there is no reason that this group shouldn't wildly outperform the markets.  Its just difficult to actually prove.

 

This group is also self selected investors.  If one didn't exceed the index over 3 years or 5 or 10 then one would likely give up.  One would also have lost the money they need to invest which is a further encumbrance.  8nhjmuvv 7uv      7um

[Guest dealraker]

Being an older man one of the things that I'd throw out in this disussion is the need to be somebody special can be very distracting to maybe what this board is attempting to do (from my view which has its own filters).  I'll try to give you a perspective on that by saying I am a member of an investment club that had been around for 60 years by the time I joined and it had done well.  But in any event during the tech years of the late 1990's a few new boys jumped in and by the year 2000 the club was 100% in technology stocks.  Our performance was for the 5 years up till early 2000 over 50% a year. 

 

I, of course, had no tech stocks.  I'd gone from sort of being the "expert" to the idiot.  I stayed away from club meetings as all the meetings were about was stock prices, not business.  Egos and "my performance since 1995" was the topic over, over, and over again.

 

The club portfolio fell (of course) in the 2001-2002 period 80%.  The past stories of glory ended.  I simply would say, "I bought Cadbury because I didn't think I could lose money.  The same with Smuckers."

 

So what I am getting to is that I think we will find out how honest/good this board is when the great majority of us claim to have underperformed the market, not getting 60% a year or even anything a year.  And stating that without any reservation will be the place where we will all occasionally be at some point whether we admit it or no.

 

Don't mean to be a smart-elec but outperforming isn't something we can do all the time - except in messages on this board.

 

 

 

[Guest Dazel]

 

I think the more important question is why? Why have I outperformed? If you are honest with your

answers to your self you will learn something and likely out perform in the future. The answer is somewhere in between

courage and conviction. In order to have them you first have to "DO YOUR OWN HOMEWORK" because if you don't you will

not be able to act on them. This also means being able to sell a mistake...over the long term this is very important in my mind. It is

not what you did (performance)...it is how you did it.. that will be your future performance.

 

Dazel

[ERICOPOLY]

Additionally some people on this board hold cash as a percentage of their portfolio.

 

To beat the S&P500 all you had to do was go long SPY with a percentage of your portfolio and hold a reserve of cash with some other percentage -- the more cash you held, the greater your outperformance.

 

There may be less people beating the market during a period where the S&P500 outperforms cash.

 

However I think the majority of people made their money from their picks -- and the S&P500 outperformance was large in most cases... too large to be explained by just cash (my guess).

 

 

[Guest broxburnboy]

Being an older man one of the things that I'd throw out in this disussion is the need to be somebody special can be very distracting to maybe what this board is attempting to do (from my view which has its own filters).  I'll try to give you a perspective on that by saying I am a member of an investment club that had been around for 60 years by the time I joined and it had done well.  But in any event during the tech years of the late 1990's a few new boys jumped in and by the year 2000 the club was 100% in technology stocks.  Our performance was for the 5 years up till early 2000 over 50% a year. 

 

I, of course, had no tech stocks.  I'd gone from sort of being the "expert" to the idiot.  I stayed away from club meetings as all the meetings were about was stock prices, not business.  Egos and "my performance since 1995" was the topic over, over, and over again.

 

The club portfolio fell (of course) in the 2001-2002 period 80%.  The past stories of glory ended.  I simply would say, "I bought Cadbury because I didn't think I could lose money.  The same with Smuckers."

 

So what I am getting to is that I think we will find out how honest/good this board is when the great majority of us claim to have underperformed the market, not getting 60% a year or even anything a year.  And stating that without any reservation will be the place where we will all occasionally be at some point whether we admit it or no.

 

Don't mean to be a smart-elec but outperforming isn't something we can do all the time - except in messages on this board.

 

 

Agree with you here... funny how the the Nasdaq index is no longer used as the benchmark as it was back in the dot.com days.. we have switched to the S&P500 as a measure of minimum performance.

The point is ...given the deterioration of the USD, the real performance of any indexes denominated in dollars have deteriorated against themselves by the same % as the USD has been dilluted... making any claim of REAL outperformance carry a rather substantial disclaimer.

[bookie71]

I am one of the older members, and in the past I have had many folks tell me that I have a "boring" portfolio, after the last 2  big drops, I have noticed a bunch of those folks listen and have bought some of my stocks (I know as I do their taxes and see their year end statements).

 

I have also noticed that I will be flat for sometimes up to 2 to 2 1/2 years and will then have a surge of up to 2-300% in a short period.

 

Patience, contrarianism (not sure this is a word) and common sense are the keys.  You can't teach common sense, I have known several geniuses who were what my father called "educated idiots".

 

jmho and worth what it cost (nothing) ;D