Well the numbers are in. Unlike a European Finance Minister, lets not dilly dally and dive straight into the numbers:
|UK||Q1 2013*||US||Q1 2013*|
|FTSE 100||9.50%||S&P 500||10.60%|
|Asset Value Portfolio||-3.10%||Asset Value Portfolio||1.43%|
|The Relatively Unpopular Large Company||6.74%||The Relatively Unpopular Large Company||8.60%|
|Winnowing Of The Stock Guide||-2.00%||Winnowing Of The Stock Guide||8.38%|
*Portfolio figures are calculated from 31 December to 28 March from Yahoo! and are inclusive of dividends. Indexes are taken from publicly available sources.
What Do These Numbers Actually Mean?
Not a lot.
For example, the relatively unpopular large company portfolios in theory should mirror the index returns but they do not since I add each stock at the worst possible price on the last trading day of 2012 and use the worst possible price on 28 March to calculate returns.
Besides, three months to judge the usefulness of any investing strategy is just too short a time frame I’m afraid. Five years is better, ten is optimal. Nevertheless there are some lessons in them there numbers.
Here are the keys ‘take aways’ from the first quarter results:
- Never rely entirely on screeners to select your portfolios – although this was one of the points of this exercise I ran into a number of difficulties which could all be traced to data accuracy. For example, although I built these screeners to return stocks that were selling for more than $1 for the US Asset Value Portfolio, it nonetheless returned stocks that were. The screener also returned stocks that were not domiciled in the US even though the screener should have prevented this – always, always, always check the data by cross referencing it with alternative financial data providers.
- Stick to one trading strategy without deviation – In February I moaned about how I missed a good return from not including Dell in the Relatively Unpopular Large Company due to ‘tweaking’ Ben Graham’s original strategy to only include large caps that pay a dividend. Of course this was pure greed on my part. Nevertheless, the large caps have remained on par (on a like for like basis) with the benchmarks despite this.
- Results will always surprise – Its interesting to note that the three US portfolios are in positive territory which would be in line with the rate at which the Dow and S&P 500 have been rising this year. What’s also impressive is that the returns from the Winnowing of The Stock Guide for the US portfolios almost matches The Relatively Unpopular Large Company; despite only one dividend paying stock in this group against 24 out of 27 for the large caps.
Thanks for keeping up to date with my little experiment as I know a few readers were keen to see the results of individual portfolios. I’ll post quarterly updates just to see how things pan out over the lifetime of these portfolios.
UK Investor Show 2013
As you may or may not know I’ll be attending the UK Investor Show at the ExCel Centre in London this Saturday 13 April.
If you are attending and see me milling around don’t be afraid to strike up a conversation with me.
There is an awesome line-up up speakers that includes the great and good from the UK investing circuit. There is also the opportunity to meet the CEO’s of small cap growth companies. Hope to see you there.
If you enjoyed this post, check out these posts inspired by screening for stocks using Ben Graham’s criteria:
- 3 Benjamin Graham Screeners Put To The Test – Part 1
- 3 Benjamin Graham Screeners Put To The Test – Part 2
- Now You Can Compare A Company Against Its Peers In Less Than 5 Minutes
- Stock Market Investing Like Ben Graham Using ADVFN
- How To Use ADVFN To Invest Like Ben Graham And Walter Schloss – Part 1
- How To Use ADVFN To Invest Like Ben Graham And Walter Schloss – Part 2
Image: Run For Profit Concept