Your returns in 2013

[rkbabang]

Only 25.96% this year, too much cash for too long. My mistake...

 

Wow 25% this year!  I'm only up about 5.5% this year.

 

[wisdom]

It is easy to get carried away with results over the last 365 days, so I thought I might provide some perspective:

 

I wonder how much of the performance is just because we had a larger exposure to the market than the average person and it so happened that equities did well. The fact you are on this board - you have a group that is more likely to be in equities.

 

I worry about hubris - I would personally need to repeat this many times to believe it is more than me getting lucky this year.

 

This board either includes the better than average (market) investors or else we could get reversion to mean at some point in time.

[oddballstocks]

It is easy to get carried away with results over the last 365 days, so I thought I might provide some perspective:

 

I wonder how much of the performance is just because we had a larger exposure to the market than the average person and it so happened that equities did well. The fact you are on this board - you have a group that is more likely to be in equities.

 

I worry about hubris - I would personally need to repeat this many times to believe it is more than me getting lucky this year.

 

This board either includes the better than average (market) investors or else we could get reversion to mean at some point in time.

 

Your perspective reminds me of the research on luck vs skill within investing.  The EMT people will essentially look at any length of time and say "2/5/10/25 years isn't long enough to know."  I've even heard debates around whether equities outperform because 120 years of data isn't a big enough sample size and we truly won't know until we have hundreds of years worth of samples.

 

I have family and friends in mutual funds of their own choosing, they nearly matched the market or underperformed and are happy about it because the benchmark did so well.  If you want to see how the average joe did check out this thread: http://www.bogleheads.org/forum/viewtopic.php?f=1&t=129562&newpost=1906410 (index fund investor performance thread)

[fareastwarriors]

It is easy to get carried away with results over the last 365 days, so I thought I might provide some perspective:

 

I wonder how much of the performance is just because we had a larger exposure to the market than the average person and it so happened that equities did well. The fact you are on this board - you have a group that is more likely to be in equities.

 

I worry about hubris - I would personally need to repeat this many times to believe it is more than me getting lucky this year.

 

This board either includes the better than average (market) investors or else we could get reversion to mean at some point in time.

 

Your perspective reminds me of the research on luck vs skill within investing.  The EMT people will essentially look at any length of time and say "2/5/10/25 years isn't long enough to know."  I've even heard debates around whether equities outperform because 120 years of data isn't a big enough sample size and we truly won't know until we have hundreds of years worth of samples.

 

I have family and friends in mutual funds of their own choosing, they nearly matched the market or underperformed and are happy about it because the benchmark did so well.  If you want to see how the average joe did check out this thread: http://www.bogleheads.org/forum/viewtopic.php?f=1&t=129562&newpost=1906410 (index fund investor performance thread)

 

 

OT but I have to say bogleheads.org is such a great site for index investors/personal financial mgmt/taxes/etc. Wonderful community of people.

[oddballstocks]

A follow-up to my last post, I'd highly encourage anyone to read that thread.  Now granted a lot of the 10-15% returns are coming from 50/50 portfolios, but even people in 100% equities investing in indexes are barely doing over 20-25%.

 

Also note as a bit of perspective people on that thread are patting themselves on the back for 15% returns.  I think as a whole our expectations are too high, they're great, but we've lost touch.

 

I agree with fareastwarriors, that is a great site on saving and investing prudently.  Probably 90% of investors would be better off if they regarded that advice.  Often good threads on career advice, home improvement etc.

[zarley]

The boglehead forum can be a great resource; I've been a member there for a while.  I'm ambivalent about it though.  So many posters there are strictly dogmatic about EMH that they can't even conceive of someone using a value approach to investing and achieving market beating returns (it's cult-like).  For example, the perspective on Buffett there is mostly that he's lucky, using inside information, and/or otherwise doing things that individual investors can't (buying whole companies and doing GS or BAC type deals).  Anything other than pure efficient markets and indexing is pretty much non-existent, or drowned out by sheer volume.  There is great information there, but the blinders most choose to wear make it somewhat inhospitable to open discussion of anything other than indexing.

 

In a way it's interesting that there's even a forum since it all boils down to choosing your asset allocation and then using some mix of ETFs and/or index funds to execute it.  What's to talk about?  May as well take turns quoting from Bogle's Little Book of Indexing.

[oddballstocks]

The boglehead forum can be a great resource; I've been a member there for a while.  I'm ambivalent about it though.  So many posters there are strictly dogmatic about EMH that they can't even conceive of someone using a value approach to investing and achieving market beating returns (it's cult-like).  For example, the perspective on Buffett there is mostly that he's lucky, using inside information, and/or otherwise doing things that individual investors can't (buying whole companies and doing GS or BAC type deals).  Anything other than pure efficient markets and indexing is pretty much non-existent, or drowned out by sheer volume.  There is great information there, but the blinders most choose to wear make it somewhat inhospitable to open discussion of anything other than indexing.

 

In a way it's interesting that there's even a forum since it all boils down to choosing your asset allocation and then using some mix of ETFs and/or index funds to execute it.  What's to talk about?  May as well take turns quoting from Bogle's Little Book of Indexing.

 

Agreed, which is a shame because the low expense approach has merits.  When I help family members set up a portfolio, I just recommend low cost index funds they can set and forget.  They don't care about investing, most don't even log into their accounts once a year so a cheap fund like Wellington or something similar is fine for them.

[wisdom]

oddball - I was referring to 365 days of performance and not over a longer period of time. The statement had nothing to do with EMH.

[rkbabang]

The boglehead forum can be a great resource; I've been a member there for a while.  I'm ambivalent about it though.  So many posters there are strictly dogmatic about EMH that they can't even conceive of someone using a value approach to investing and achieving market beating returns (it's cult-like).  For example, the perspective on Buffett there is mostly that he's lucky, using inside information, and/or otherwise doing things that individual investors can't (buying whole companies and doing GS or BAC type deals).  Anything other than pure efficient markets and indexing is pretty much non-existent, or drowned out by sheer volume.  There is great information there, but the blinders most choose to wear make it somewhat inhospitable to open discussion of anything other than indexing.

 

In a way it's interesting that there's even a forum since it all boils down to choosing your asset allocation and then using some mix of ETFs and/or index funds to execute it.  What's to talk about?  May as well take turns quoting from Bogle's Little Book of Indexing.

 

Indeed, I find it odd that a group of people who are interested enough in investing to go online and discuss it everyday are using the set it and forget it approach to an almost religious degree.  There was one post on that thread where you could just read the guilt dripping off his words as he admitted to the board that he let his stock funds run this year without doing any asset allocation, but promised that he's got it on his to-do list for January.  Sacrilege!

[abitofvalue]

Wow a lot of people with over 40-50% returns here.  you guys are good.

 

15% for the year.  hurt by holding approx 25- 33% cash for the year and a handful of poor picks on my part..  Not happy with the performance given how the rest of the market did but cant say I am sad either... 15% is pretty decent given the unforced errors I committed this year.  Hopefully, I have learnt some (expensive and painful) lessons from this year.

 

The key to long-term outperformance will of course be how we perform when markets fall.

 

 

 

[ourkid8]

I am humbled by other individuals gains as my 2013 portfolio returned only 46.58% for the year.  I am very impressed with the gains being shown on this board, great job guys!!!! (My gains do not include forex) I have made HUGE returns in BAC, AIG, DELL, SHLD and a few others.  My losers have been PM and FFH. 

 

Sanjeev, thanks for having a wonderful board as I learned to compound at a high rate of return and made numerous friends in the process.  Thanks again!  :)

 

Tks,

S

[SharperDingaan]

Re the outsized returns:

It is highly likely that most of these portfolios are very small; it doesn't take much to move the dial.

There is material survivor bias; it is highly likely that without the boards feedback most would have had far worse reversals - & some of them fatal.

The portfolios are usually all equity, & not blue chip; betas > 1.0 are exagerating market gains.

Risk/return is not really a consideration, & nor is compound YOY return.

 

Most folks on this board would probably average around a 9-18% compound annual return over the next 10-15 years - by simply developing thier own approach & sticking with it. For many, that is essentially a fully paid off house by around age 50, inclusive of the expense of spouse & kids. Hard to knock.

 

SD

[TwoCitiesCapital]

I'm astounded by the returns on this board.  I imagine it's a combination of both the talent on this board as well as a form of self-selection bias as those who have something to brag about are more likely to be the ones to report.

 

I think overall I was up about 4% for the year in my investment portfolio. I was 20-40% cash/bonds for a large portion of the year as I have difficulty trusting the current environment. I had a lot of big winners (GOOG, BBY, SB, MRVL, SAN, MBIA) but those were all offset by my biggest losers (BBRY and AAPL and shorting AMZN)  I think the problem I need to work on is learning how to size my positions. I seem to have some decent picks...I just always weight the losers far more heavily than the winners. SB and BBY were about 5% of my portfolio collectively while BBRY was at 16%.

 

The number that really matters (my net worth) is up 40% YoY due to my success in a side business that I invested in building. I don't know how to best to measure the "returns" as not all of them are monetary and my investments were sporadic, but I have put in some $6-7k and 15hrs/month over the past 2 years and have made some 500-600% in net economic benefit over that time. This year I expect add another 500-600% in economic terms as my costs have stayed the same but I have successfully raised my prices.

 

I would love to find stellar stock returns too, but it seems my talent lies elsewhere. I'm beginning to accept that and am building a core/satellite portfolio that will allow me to dabble in my ideas/picks without doing too much damage to my long-term results. I'm counting on you guys to provide some of those picks ;)

[LC]

I would love to find stellar stock returns too, but it seems my talent lies elsewhere. I'm beginning to accept that and am building a core/satellite portfolio that will allow me to dabble in my ideas/picks without doing too much damage to my long-term results. I'm counting on you guys to provide some of those picks ;)

 

Congrats on your side business' results!

 

In response to your quoted section...BRK might fit the bill!

[sigis]

+24%. Just like everybody else in <50% crowd I feel somewhat discouraged but looking back I don't feel I would have changed much. My only excuse is that I joined the board in March 2013, so only had 9 months to realize a full benefit of this board!

[bz1516]

I'm up 49.7% for the year.  It was the first year I decided to only take positions in my high conviction ideas and let the percent of nav invested fall where it may.  That resulted in  averaging just a little over 50% long and about 7% of nav short.  Am not temperamentally able to go to really large positions at this point.  So the risk adjusted return was very high, but not by intention.  Biggest winners were MCR.v and OCN, but also did well with BALT, SB and EH.to.  Limiting losers was a very big factor, but that may have been just luck and a cooperating market with the largest loss 0.5% of nav.

 

Right now only 40% long and ~8% short.  Really would like to have more long ideas, but nothing looks good right now.

 

 

[james22]

Some incredible returns, based on this thread I take it no one had a bad year?

 

*raises hand*

 

Lots of cash and precious metals equity.

 

A Hussman fan, like to believe looking (and feeling) like an idiot before the peak preferable to looking like an idiot after.

 

We'll see.

 

I should qualify - my 401k makes up 40% of my portfolio and offers only (what I believe to be overvalued) TSM/TIM/REIT index funds. Had I a brokerage window and could invest that in something like fair valued BRK/MKL or undervalued AIG/BAC, I'd do so.

 

Looking forward to 2014 and the board's help.

[giofranchi]

A bit under 60% annually compounded.

 

This includes your own savings though I presume (earnings you chose to retain rather than paying out to yourself).

 

Yes! Of course! Never pretended to be such a good investor, and I think that probably I will never be! ;)

 

Gio

 

Well, that makes two of us.  I continually assert that I'm just an average retail investor who copies better investors. 

 

Don't sell yourselves short.  I think you are both excellent investors, way above average, and way better than I.  I've seen people say that they copy other investors and don't have original ideas. What is an original idea anyway?  An idea where you are the first one to invest in the company?  Any public company has had investors prior to you, so an original idea is impossible.  It doesn't matter where you found the idea, only that you understood it and put your money into it and earned the return.

 

That’s a very good way to put “original ideas” into the right perspective! ;)

 

I simply believe in frugality and in the importance of shrewd capital allocation. My whole business experience tells me that those two things can take you far, very far. Therefore, I try to save as much as I can, and I try to keep company with shrewd capital allocators. I don’t think this is enough to qualify even as a good investor, let alone an “excellent investor”… Anyway, thank you very much! :)

 

Gio

 

[Uccmal]

+24%. Just like everybody else in <50% crowd I feel somewhat discouraged but looking back I don't feel I would have changed much. My only excuse is that I joined the board in March 2013, so only had 9 months to realize a full benefit of this board!

 

Sigis, I have only tagged your note as an example here.  Not personal.

 

In 2013 the S&P returned about 21%.  Lots of us had a very good year.  I was investing for 7 years in a haphazard value methodology before I found my groove - Learned enough and made enough mistakes to work out what works.  That is why I only report 9 years back, in part.  the other reason is that before that my portfolio was constantly being added to by me, making annual calculations grossly inaccurate.

 

I feel like we should all put a disclaimer at the bottom of this thread.  It is unlikely that I will get a 60% return again this year.  My goal entering 2014 is the same as it has been since 2009. 

 

I don't want to lose money.  I want to make money, but I really dont want to lose money.  We are entering a risk off environment so I would expect returns to come waaaayyyy down in 2014.  BTW, I never set targets... I manage risk.  As BAC, AIG, or whatever rises in value my position will get smaller and smaller, particularly in the leveraged instruments.  There is only soft targets.  I expect to be totally out of BAC derivatives well before $25.00. 

 

like the SGT. Says: let's be careful out there! 

 

[Kraven]

+24%. Just like everybody else in <50% crowd I feel somewhat discouraged but looking back I don't feel I would have changed much. My only excuse is that I joined the board in March 2013, so only had 9 months to realize a full benefit of this board!

 

Sigis, I have only tagged your note as an example here.  Not personal.

 

In 2013 the S&P returned about 21%.  Lots of us had a very good year.  I was investing for 7 years in a haphazard value methodology before I found my groove - Learned enough and made enough mistakes to work out what works.  That is why I only report 9 years back, in part.  the other reason is that before that my portfolio was constantly being added to by me, making annual calculations grossly inaccurate.

 

I feel like we should all put a disclaimer at the bottom of this thread.  It is unlikely that I will get a 60% return again this year.  My goal entering 2014 is the same as it has been since 2009. 

 

I don't want to lose money.  I want to make money, but I really dont want to lose money.  We are entering a risk off environment so I would expect returns to come waaaayyyy down in 2014.  BTW, I never set targets... I manage risk.  As BAC, AIG, or whatever rises in value my position will get smaller and smaller, particularly in the leveraged instruments.  There is only soft targets.  I expect to be totally out of BAC derivatives well before $25.00. 

 

like the SGT. Says: let's be careful out there!

 

+2 -- 1 for the post and 1 for the great Hill Street Blues reference

[Kraven]

Just following up a bit on Uccmal's very good post, the problem with these kinds of threads is that they inspire greed and envy.  That's a deadly combination.  It makes people do things they might not ordinarily do.  As Oddball posted the other day with a link to the Bogleheads board, average people don't have anywhere near the returns that even the "poor performers" on this board have achieved.  There are people lamenting 20% and 30% returns like their world has come to an end and they might as well hang up their investing spikes forever. 

 

So what will happen?  It's the same thing here as in the threads on leveraging up with options.  People will look at those who got gaudy returns and try to emulate them.  The thing is that the people who got these returns are very smart, very experienced and very good at what they do.  It's not the kind a thing a novice is going to just pop in and do.  Yet, that is what many will try.  The problem is that when the music stops the experienced will grab a seat while the novices will be left dancing for a few minutes until they realize the music hasn't been playing for a while. 

 

Know thyself.  Figure out what you are good at and what is comfortable for you. 

[Packer16]

I agree 100%.  At this point I am finding value in more business risky places (like Europe and EM) versus 12 to 24 mos ago.  I expect it will be a much more volatile and bumpy ride from here and who knows 2014 may be the year I hold cash.

 

Packer

[giofranchi]

There are people lamenting 20% and 30% returns like their world has come to an end and they might as well hang up their investing spikes forever. 

 

Not me! Actually, I have said I am very happy with my returns in 2013! ;D ;D

 

As I have said, frugality and shrewd capital allocation are how I do, or at least try to do, business. Yet, I constantly ask myself: are those two things all that matters… “If you’d be wealthy”? I am always on the look out for something that I might be missing… This doesn’t mean the first thing I encounter will convince me of its usefulness… Actually, nothing else has convinced me to this day… And I am still stuck only with the "frugality and shrewd capital allocation" formula… But always searching for something that might help me improve my performance as an investor and businessman! ;)

 

Gio

 

[xtreeq]

Just following up a bit on Uccmal's very good post, the problem with these kinds of threads is that they inspire greed and envy.  That's a deadly combination.  It makes people do things they might not ordinarily do.  As Oddball posted the other day with a link to the Bogleheads board, average people don't have anywhere near the returns that even the "poor performers" on this board have achieved.  There are people lamenting 20% and 30% returns like their world has come to an end and they might as well hang up their investing spikes forever. 

 

So what will happen?  It's the same thing here as in the threads on leveraging up with options.  People will look at those who got gaudy returns and try to emulate them.  The thing is that the people who got these returns are very smart, very experienced and very good at what they do.  It's not the kind a thing a novice is going to just pop in and do.  Yet, that is what many will try.  The problem is that when the music stops the experienced will grab a seat while the novices will be left dancing for a few minutes until they realize the music hasn't been playing for a while. 

 

Know thyself.  Figure out what you are good at and what is comfortable for you.

 

I'm a novice at this pursuit so thanks for the perspective. I think any year in which you do not lose your capital's purchasing power cannot be thought of as "bad" ... as for good - this is more subjective. I find that I sometimes enjoy the mental game far more than the actual returns! I think Gio is the same in this way ;)

[giofranchi]

I find that I sometimes enjoy the mental game far more than the actual returns! I think Gio is the same in this way ;)

 

Yes! Of course!!

Go to twacowfca, Eric, Packer, Al, Kraven, Onyx1, Sanjeev, etc. for actual returns…

But come to me, if you want to enjoy the mental game!!

;D ;D ;D ;D

 

Gio