Your returns in 2013

[Hielko]

You have to ask though how many independent samples there really are in the CoBF results (and the same can be said about the bogleheads performance). If almost everybody invests in AIG, BAC and a few other names, and those names outperform: what does it exactly say?

 

That they were really undervalued. :)

Totally possible, but how many simply followed the few great investors that really recognized this?

 

Hypothetical; lets say you had a group of people who simply copied Buffett a couple of decades ago. They would have outperformed, and you probably should give them some credit for choosing to follow Buffett. But it would be really one guy that would have been the great investor, not the group of followers (imo).

 

So how many great investors versus followers are there on this board?

[ERICOPOLY]

You have to ask though how many independent samples there really are in the CoBF results (and the same can be said about the bogleheads performance). If almost everybody invests in AIG, BAC and a few other names, and those names outperform: what does it exactly say?

 

That they were really undervalued. :)

Totally possible, but how many simply followed the few great investors that really recognized this?

 

Hypothetical; lets say you had a group of people who simply copied Buffett a couple of decades ago. They would have outperformed, and you probably should give them some credit for choosing to follow Buffett. But it would be really one guy that would have been the great investor, not the group of followers (imo).

 

So how many great investors versus followers are there on this board?

 

There are great followers and poor followers.

 

Who loaded up on IBM and ignored BAC?  Who bought BBRY and ignored Bank of Ireland?

[racemize]

Below is Bogleheads performance bell curve for comparison:

 

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=129567

 

If we translate it to our bins, we get: less than 10% - 11%; 10 to 25% - 73%; 25 to 40% - 16% and above 40% - 0%.  We do appear to have an above average group here.

 

Packer

 

A couple of issues on our bins:

1) the poll started before the year ended;

2) There is a dividing line that was right on the S&P returns.

 

So, ours is fairly poor sampling I believe.  For example, when I answered, I was at 24.6% or so, and I finished at 28.89%.  I think many people ended higher, and that dividing line has some impact.

[alertmeipp]

You have to ask though how many independent samples there really are in the CoBF results (and the same can be said about the bogleheads performance). If almost everybody invests in AIG, BAC and a few other names, and those names outperform: what does it exactly say?

 

That they were really undervalued. :)

Totally possible, but how many simply followed the few great investors that really recognized this?

 

Hypothetical; lets say you had a group of people who simply copied Buffett a couple of decades ago. They would have outperformed, and you probably should give them some credit for choosing to follow Buffett. But it would be really one guy that would have been the great investor, not the group of followers (imo).

 

So how many great investors versus followers are there on this board?

 

There are great followers and poor followers.

 

Who loaded up on IBM and ignored BAC?  Who bought BBRY and ignored Bank of Ireland?

 

Great point. But financial was a bit overrated last year compare to other sectors.

[merkhet]

You have to ask though how many independent samples there really are in the CoBF results (and the same can be said about the bogleheads performance). If almost everybody invests in AIG, BAC and a few other names, and those names outperform: what does it exactly say?

 

That they were really undervalued. :)

Totally possible, but how many simply followed the few great investors that really recognized this?

 

Hypothetical; lets say you had a group of people who simply copied Buffett a couple of decades ago. They would have outperformed, and you probably should give them some credit for choosing to follow Buffett. But it would be really one guy that would have been the great investor, not the group of followers (imo).

 

So how many great investors versus followers are there on this board?

 

I think the board, collectively, has had this conversation a few times already -- but there is a difference between (1) seeing that someone else has bought something and buying it based on that alone and (2) seeing that someone else has bought something and buying it after doing your own research to see if you understand it and agree with the valuation.

 

It is difficult on results alone to say who falls into which camp.

[randomep]

Below is Bogleheads performance bell curve for comparison:

 

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=129567

 

If we translate it to our bins, we get: less than 10% - 11%; 10 to 25% - 73%; 25 to 40% - 16% and above 40% - 0%.  We do appear to have an above average group here.

 

Packer

 

A couple of issues on our bins:

1) the poll started before the year ended;

2) There is a dividing line that was right on the S&P returns.

 

So, ours is fairly poor sampling I believe.  For example, when I answered, I was at 24.6% or so, and I finished at 28.89%.  I think many people ended higher, and that dividing line has some impact.

 

Regarding Packer's comments, of course we are above average. This is CoBF which means we are from the Graham and Doddsville school. And the school does yield superior returns.

 

 

[Compounder]

How do those of you who use IB measure your returns? Do you use one of the reports? Do you use money weighted or time weighted?

[yitech]

How do those of you who use IB measure your returns? Do you use one of the reports? Do you use money weighted or time weighted?

 

IB has portfolio analysis report for monthly, daily, quarterly..etc. I believe it's default to chain-linked time-weighted as the standard where it splits the periods during which you have withdrawal/deposits and multiply these time-weighted returns. It's the recommended CFA practice.

[dpetrescu]

2013 was a great year for me. I had 115% return counting my personal, Roth, and traditional IRA accounts. However, this was a unique year and don't think I will be able to replicate it.  I held about 5% or less cash and used LEAPS options for select stocks. I'm now sitting on a great deal of cash (40%) and am a bit worried that the market can keep going up at such a dramatic pace. I'm very actively looking for ideas to put cash to use, which is why I joined this board.

 

In 2012 and 2013 I finally used up the first of my 20 punches with GM. I don't think I'll come across another GM at under $20 for a very long time. At one point, GM reached about 40% of my portfolio. GM was too good to be true with very low valuation, the majority holder was a forced seller, political bias of investors, great balance sheet after quick restructuring, implied government support, with the wind of automobile recovery at its back. This outweighed the risks of large liabilities, loss in value of brand (government motors), potential continued auto sales decline, continued Euro zone economy collapse or China or global recession.

 

Other non-punchcard positions included:

GLW - consistently growing revenues and earnings, very low Valuation, a 100 yr old glass company that continues to innovate. risk is signs of potential competition in tablet and mobile phone glass and accelerated decline in tv sales, although I think TV sales will be a tide in GLWs favor eventually

VRSN - a legal 100% monopoly for .com and .net registration with very consistent growth. It does have a major threat on the horizon with release of generic top level domains

BAC leaps options - once a 50 cent dollar, seems like everyone on here owned this last year

LEN - I was interested in the housing recovery tide. This was almost another punchcard position but all the home builders are too overpriced.

Some other misc smaller positions

 

Losers (Very big losers)

CRM (short) serial acquisitions, big use of stock based compensation that Is not expensed

GME (short) an ice cube on the beach on a cool night, the sun is bound to rise

OUTR (short) DVD vending machine business, ice cream on the beach next to GME

NG - gold, enough said

[mcliu]

Below is Bogleheads performance bell curve for comparison:

 

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=129567

 

If we translate it to our bins, we get: less than 10% - 11%; 10 to 25% - 73%; 25 to 40% - 16% and above 40% - 0%.  We do appear to have an above average group here.

 

Packer

 

A couple of issues on our bins:

1) the poll started before the year ended;

2) There is a dividing line that was right on the S&P returns.

 

So, ours is fairly poor sampling I believe.  For example, when I answered, I was at 24.6% or so, and I finished at 28.89%.  I think many people ended higher, and that dividing line has some impact.

 

Regarding Packer's comments, of course we are above average. This is CoBF which means we are from the Graham and Doddsville school. And the school does yield superior returns.

 

Or we take more risks..

[Palantir]

Think we can redo the poll with smaller buckets?

[gary17]

BG2008 - can you please elaborate on what you mean by "market neutral workout"?

 

thanks

Gary

 

 

My firm’s equity is up 23% this year. And I am very happy! ;D ;D My goal is to compound it at 15% yearly for the next 45 years. I will then have created a billion dollar company out of scratch.

 

Why shooting so low?  You should aim impossibly high so that even if you miss by a mile you still do great.  So I'm setting a goal to make billions by compounding at 200% yearly for only 7 years.  See, that way, even if I only make 1/8th of my goal every year that is still 25% CAGR, if you make 1/8th of your goal you'll barely beat inflation, thus you have to come much closer.

 

I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire.  It's akin to Munger's "Man with a hammer" approach.  If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself.