madsinger monthly report (January 2014)

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madsinger monthly report (January 2014)

Post by madsinger » Mon Feb 03, 2014 10:49 am

Here is a big fat collection of portfolios, with their January 2014 returns, 2014 YTD return, and annualized returns since 1999, 2004, 2009 and 2011 (15 years 1 month, 10 years 1 month, 5 years 1 month, 3 years 1 month). I broke them into four categories, roughly corresponding to 100/0, 80/20, 60/40, 40/60 stock/bond portfolios, sorted by 10 year Total Return. The 3 fund is 50/30/20 Total Stock/Total Int'l/Total Bond. The s&d is 10 each of VFINX, VIVAX, NAESX, VISVX, VGSIX, 25 VGTSX, 5 VINEX, 20 VBMFX. The coffeehouse is a 60/40 described at The Coffeehouse Investor. The Newsletter portfolios are from a newsletter following Vanguard funds. William Bernstein's "Sheltered Sam" is an all stock portfolio which is 20% VFINX, 25% VIVAX, 5% NAESX, 15% VISVX, 10% VGSIX, 3% VGPMX, 5% each VEURX, VPACX, VEIEX, and 7% VTRIX. The madsinger portfolio is my real-world portfolio, roughly 59/5/3/33 stock/REIT/PM/bond.

-Brad.

Code: Select all

                                     CAGR    CAGR    CAGR    CAGR
                   Jan      YTD      since   since   since   since
                   2014     2014     2011    2009    2004    1999
Hot Hands         -2.63%   -2.63%  15.62%   17.70%   9.93%  12.43%
Sheltered Sam     -2.90%   -2.90%  10.49%   15.69%   7.98%   7.31%
VFINX             -3.47%   -3.47%  14.22%   16.68%   6.85%   4.31%
                  
Newsletter G      -2.20%   -2.20%  13.54%   17.52%   8.94%   9.47%
Newsletter G-IND  -2.60%   -2.60%  12.98%   17.86%   8.62%   6.13%
s&d               -1.78%   -1.78%   9.01%   13.75%   7.87%   7.40%
3 fund            -2.68%   -2.68%   9.21%   13.21%   7.24%   5.57%
LS G              -2.61%   -2.61%   9.40%   13.43%   6.40%   4.85%

Code: Select all

Newsletter CG     -1.80%   -1.80%  12.93%   15.75%   7.93%   7.71%
Wellington        -1.53%   -1.53%  10.94%   13.07%   7.87%   7.31%
coffeehouse       -0.64%   -0.64%   8.93%   12.20%   7.36%   7.13%
STAR              -1.38%   -1.38%   9.75%   12.96%   7.04%   6.60%
LS MG             -1.56%   -1.56%   8.03%   11.39%   6.05%   5.06%
                  
Wellesley         -0.36%   -0.36%   9.23%   10.81%   7.05%   6.88%
Newsletter Inc    -1.10%   -1.10%  10.87%   13.02%   6.40%   5.46%
LS CG             -0.50%   -0.50%   6.26%    9.26%   5.32%   4.93%
                  
madsinger         -1.68%   -1.68%   7.83%   13.17%      
Last edited by madsinger on Wed Feb 05, 2014 12:36 pm, edited 2 times in total.

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madsinger
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Re: madsinger monthly report (January 2014)

Post by madsinger » Mon Feb 03, 2014 10:51 am

Minus signs? We haven't seen them for quite a while on this chart.

Obviously, January was a down month for stocks almost across the board. REITs were an exception, up over 4%. Portfolios that hold REITs were helped out quite a bit.

Bonds were up for the month (we ALL saw that coming, right?) ;-)

Wishing you all well.
-Brad.

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Re: madsinger monthly report (January 2014)

Post by John Z » Mon Feb 03, 2014 12:07 pm

Just like clockwork; appreciate it. Thank you.
John

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Re: madsinger monthly report (January 2014)

Post by Random Musings » Mon Feb 03, 2014 1:25 pm

Looking at the returns, I'm starting to believe that the Wellington Fund is a closet S&D portfolio.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

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Re: madsinger monthly report (January 2014)

Post by madsinger » Tue Feb 04, 2014 12:27 am

I've updated the chart with the Newsletter returns. Their website shows the "Growth-Index" model with a +2.4% gain for the month. I'm assuming this is an error, and should be a -2.4% loss. That's how I have posted the chart. If someone learns that this is really +2.4% gain, please let me know and I will change the chart (...and ask you...how is this possible?!?)

-Brad.

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Re: madsinger monthly report (January 2014)

Post by investor » Tue Feb 04, 2014 1:36 am

madsinger wrote:I've updated the chart with the Newsletter returns. Their website shows the "Growth-Index" model with a +2.4% gain for the month. I'm assuming this is an error, and should be a -2.4% loss. That's how I have posted the chart. If someone learns that this is really +2.4% gain, please let me know and I will change the chart (...and ask you...how is this possible?!?)

-Brad.
Brad it is really a -2.6% loss. not 2.4%

Thanks for the monthly updates

investor

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Re: madsinger monthly report (January 2014)

Post by Mel Lindauer » Tue Feb 04, 2014 1:37 am

Hi Brad:

Any chance you can add Mel's Unloved Mid Caps to the mix? There have been a number of recent threads on that topic, as well as continuing interest over the years.
Best Regards - Mel | | Semper Fi

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Re: madsinger monthly report (January 2014)

Post by ProfessorX » Tue Feb 04, 2014 9:22 am

Thanks!

Anyone know what is in the "Hot Hands" portfolio?

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Re: madsinger monthly report (January 2014)

Post by ResearchMed » Tue Feb 04, 2014 9:27 am

ProfessorX wrote:Thanks!

Anyone know what is in the "Hot Hands" portfolio?
It is the SINGLE Vanguard mutual fund (of the general funds, not sector/etc.) that had the best annual performance for the previous end of year.

It will change each year (IF the "best performing fund" changes), and then stays the same for the entire "next year".

Dan has published a list of each month's historical performance of the relevant "Hot Hand" fund.
I think October was best. Not sure when he last updated.

Does any current subscriber have this "monthly Hot Hands" list?

We don't currently subscribe; waiting for another low-ball "Save NOW, subscribe NOW" offer :wink:

We do not follow any of his model portfolios, although they don't seem to look bad at all.

RM

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Re: madsinger monthly report (January 2014)

Post by Scooter57 » Tue Feb 04, 2014 10:20 am

:wink: It's hard to understand why the 3 fund portfolio inspires such enthusiasm on this forum when it has so badly underperformed most of the other portfolios for 15 years. Compound the difference between it and several of Wiener's portfolios over that time period and you can see you have lost a lot of potential gains by choosing that approach.
Last edited by Scooter57 on Tue Feb 04, 2014 10:43 am, edited 1 time in total.

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Re: madsinger monthly report (January 2014)

Post by jjustice » Tue Feb 04, 2014 10:30 am

Thanks, Brad, I look every month. A quibble: I don't see the need to have both 3 fund and LS G. Since LS G went all index, the two are only trivially different. LS G has 56% domestic, while 3 fund has 50%, and foreign is 24/30. LS G has a smidgen of foreign bonds.

That said, don't drop LS G!

John

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Re: madsinger monthly report (January 2014)

Post by Scooter57 » Tue Feb 04, 2014 10:43 am

Explorer was the 2014 hot hands fund, but Dan made a compelling argument about why he wouldn't be buying it.

The October pick was Capital Value.

In each case it is simply the Vanguard fund with the best 12 months performance at the end of Oct or Dec, excluding sector funds.

I have been quite pleased with the funds he has recommended. I have been averaging into several. He gives very good reasons for everything he recommends. It's not exciting as he rarely changes anything, but I am quite happy with what my $99 bought me.

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Re: madsinger monthly report (January 2014)

Post by Jay69 » Tue Feb 04, 2014 12:05 pm

Scooter57 wrote::wink: It's hard to understand why the 3 fund portfolio inspires such enthusiasm on this forum when it has so badly underperformed most of the other portfolios for 15 years. Compound the difference between it and several of Wiener's portfolios over that time period and you can see you have lost a lot of potential gains by choosing that approach.
Sure makes Wellington look good does it not!
"Out of clutter, find simplicity” Albert Einstein

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Re: madsinger monthly report (January 2014)

Post by investor » Tue Feb 04, 2014 1:10 pm

Scooter57 wrote:Explorer was the 2014 hot hands fund, but Dan made a compelling argument about why he wouldn't be buying it.

The October pick was Capital Value.

In each case it is simply the Vanguard fund with the best 12 months performance at the end of Oct or Dec, excluding sector funds.

I have been quite pleased with the funds he has recommended. I have been averaging into several. He gives very good reasons for everything he recommends. It's not exciting as he rarely changes anything, but I am quite happy with what my $99 bought me.

You should not be giving out subscriber information


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Re: madsinger monthly report (January 2014)

Post by Scooter57 » Tue Feb 04, 2014 2:34 pm

Since the hot hands fund is known to be the Vanguard fund with the best performance at a know time, it is hardly secret information.

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Re: madsinger monthly report (January 2014)

Post by investor » Tue Feb 04, 2014 6:19 pm

Scooter57 wrote:Since the hot hands fund is known to be the Vanguard fund with the best performance at a know time, it is hardly secret information.

The DW comments about not buying Explorer and Capital Value as October fund were not common knowledge. Also people on this forum continue to ask about the Hot Hand Fund and what it is. It is not very ethical to discuss the subscriber newsletter on an open forum.
Let folks guess and speculate.....

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Re: madsinger monthly report (January 2014)

Post by Scooter57 » Tue Feb 04, 2014 7:31 pm

I must have missed the part where they offer the secret initiation complete with vows of silence. Maybe that comes with the $199 version?

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Re: madsinger monthly report (January 2014)

Post by investor » Tue Feb 04, 2014 7:45 pm

Scooter57 wrote:I must have missed the part where they offer the secret initiation complete with vows of silence. Maybe that comes with the $199 version?
It is called common respect and courtesy to the company and the other subscribers who have paid for the service....

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Re: madsinger monthly report (January 2014)

Post by Wagnerjb » Wed Feb 05, 2014 8:42 am

investor wrote:
Scooter57 wrote:Also people on this forum continue to ask about the Hot Hand Fund and what it is.
They continue to ask about the Hot Hands fund because Brad insists on showing it in his list, and he insists on showing it as the very first fund listed. I have gently encouraged him to remove it (since it is very un-Boglehead in strategy) or to move it down to the bottom of the list.

Best wishes.
Andy

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Re: madsinger monthly report (January 2014)

Post by madsinger » Wed Feb 05, 2014 9:20 am

Wagnerjb wrote:They continue to ask about the Hot Hands fund because Brad insists on showing it in his list, and he insists on showing it as the very first fund listed. I have gently encouraged him to remove it (since it is very un-Boglehead in strategy) or to move it down to the bottom of the list.
I have tried to be consistent with this chart from the very beginning, posting simply what the data say, with any "commentary" in another post. However, the rising number of "hot hands" questions in the past few months has caused me to think about this more. Since I do not think that a single all-stock fund really constitutes a "portfolio", I am considering reordering my chart, moving the "single fund" comparisons to the bottom, with a comment about these being single fund comparisons, not portfolios.

That said, one of the reasons I started doing this (about nine years now, I think....) was when someone posted a comparison of "strategies", it was inevitably met with charges of "any strategy can be found that worked in the past...what about the future?" My intention was to pick fixed and investable "portfolios", and to track them going forward. By posting a consistent set of portfolios and posting their returns every month for almost nine years, people could see "real time" returns, without "back testing bias".

I do appreciate any comments and suggestions about these charts. My goal has been to be accurate, consistent and free of bias. Any changes I make in the future will try to be true to these goals.

-Brad

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Re: madsinger monthly report (January 2014)

Post by MariaT » Wed Feb 05, 2014 9:30 am

Brad, as always, thank you for all your hard work over the years. Your report is one constant that I look forward at the beginning of each month. Very much appreciated.

With warm regards,
Maria

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Re: madsinger monthly report (January 2014)

Post by jonbois » Wed Feb 05, 2014 9:36 am

Brad:
I appreciate your efforts, finding your reports very useful..
just needed to be said..

Thanks,
JB

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Re: madsinger monthly report (January 2014)

Post by pezblanco » Wed Feb 05, 2014 10:04 am

I'll just say that I think that knowing what the Hothands strategy and performance is and what its performance has been very valuable. I'm not going to follow it and I'm surprised that anyone is paying money for newsletter where that is the principal strategy. If someone is not violating copyright or a stated forum policy, I don't see any problem with discussing or illuminating a strategy. I personally don't think others should try to impose their "ethical standards" on others. There is never a lack of people that are going to be perpetually offended at whatever someone else does/say/write/or think.

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Re: madsinger monthly report (January 2014)

Post by Wagnerjb » Wed Feb 05, 2014 10:33 am

madsinger wrote:
Wagnerjb wrote:They continue to ask about the Hot Hands fund because Brad insists on showing it in his list, and he insists on showing it as the very first fund listed. I have gently encouraged him to remove it (since it is very un-Boglehead in strategy) or to move it down to the bottom of the list.
I have tried to be consistent with this chart from the very beginning, posting simply what the data say, with any "commentary" in another post. However, the rising number of "hot hands" questions in the past few months has caused me to think about this more. Since I do not think that a single all-stock fund really constitutes a "portfolio", I am considering reordering my chart, moving the "single fund" comparisons to the bottom, with a comment about these being single fund comparisons, not portfolios.

That said, one of the reasons I started doing this (about nine years now, I think....) was when someone posted a comparison of "strategies", it was inevitably met with charges of "any strategy can be found that worked in the past...what about the future?" My intention was to pick fixed and investable "portfolios", and to track them going forward. By posting a consistent set of portfolios and posting their returns every month for almost nine years, people could see "real time" returns, without "back testing bias".

I do appreciate any comments and suggestions about these charts. My goal has been to be accurate, consistent and free of bias. Any changes I make in the future will try to be true to these goals.

-Brad

Brad: thanks for being open minded to changes in the lineup. I understand the desire for consistency, but keep in mind that 9 years ago when you started, we were on a different forum where many voices were advocating other than Bogleheads ideas and strategies. That's not the case on this better forum here.

Like others, I do appreciate the service you provide....

Best wishes.
Andy

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Re: madsinger monthly report (January 2014)

Post by investor » Wed Feb 05, 2014 11:41 am

BradP

You still have not corrected the February return for the Growth Index portfolio.

G Index is -2.6% not -2.4%.. (according to the newsletter)

investor

PS comment: I think ethical standards change with generations. I am of the >65 age group.

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Re: madsinger monthly report (January 2014)

Post by dkturner » Wed Feb 05, 2014 11:50 am

Scooter57 wrote::wink: It's hard to understand why the 3 fund portfolio inspires such enthusiasm on this forum when it has so badly underperformed most of the other portfolios for 15 years. Compound the difference between it and several of Wiener's portfolios over that time period and you can see you have lost a lot of potential gains by choosing that approach.
Give it time, we're only talking about 15 years of questionable performance. :|

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Re: madsinger monthly report (January 2014)

Post by madsinger » Wed Feb 05, 2014 11:52 am

investor wrote:BradP

You still have not corrected the February return for the Growth Index portfolio.

G Index is -2.6% not -2.4%.. (according to the newsletter)

investor

PS comment: I think ethical standards change with generations. I am of the >65 age group.
Hello investor,

I was waiting to see the correction on the webpage. However, I was pretty sure that +2.4% was not right! I will make the correction and post soon. Thank you for providing me with accurate information.

-Brad.

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Re: madsinger monthly report (January 2014)

Post by Scooter57 » Wed Feb 05, 2014 12:48 pm

The Hot Hands strategy is not what Weiner's newsletter promotes. It's just something he discusses with some interesting reasoning. Subscribers to the newsletter get the reasoning, which is what they need to make their own decisions. Anyone who buys any newsletter to blindly follow its recommendations without giving deep consideration to the reasons given for the strategy is a fool of the kind who will soon be parted with his money.

The value of Weiner's newsletters is the detailed explanations he goes into of what various Vanguard active funds invest in, why they make the investment choices they do, and his in depth discussion of and interviews with the people who manage the funds.

I have been invested in Vanguard funds forever, but Wiener gave me MUCH clearer explanations of what various funds' strategies were about. The descriptions in the funds' prospectuses do not do this. In fact, they are opaque to the point of being meaningless in the case of several funds I have purchased in the past--believing them to be doing things they weren't. That kind of information is what you are paying for when you buy the subscription and it can't be reduced to a single paragraph posted here or anywhere else.

Investor's reasoning seems to suggest that it would be unethical to summarize anything that Bogle or Bernstein (Sheltered Sam) has said in one of his books as that would be unfair to those who paid for the books. If the entire value of any publication can be destroyed by posting a single paragraph about it, there is something seriously wrong with that publication.

Finally, to get back to Madsinger's extremely valuable post. I think it is very useful to see the long term results of investment strategies that are not the ones you are emotionally attached to. This forum tends to go all faith-based about the Three Fund Portfolio and because of this forum's reach that has a significant impact on the retirement prospects of large numbers of people who read here and are influenced by what they read.

So it is nice to occasionally see a long-term data set as opposed to the kinds of theories that make up most of the chatter here.

My only suggestion is that he add a DFA-based "smart beta" portfolio of the type that get discussed ad nauseum here so that we could see how they have fared over the years.

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Re: madsinger monthly report (January 2014)

Post by Barry Barnitz » Thu Feb 06, 2014 6:23 am

Hi:
We have created a new page in the wiki, devoted to consolidating madsinger's monthly reports for easier access. Here is the current early status of the page: Madsinger monthly reports - Bogleheads.

regards,
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Re: madsinger monthly report (January 2014)

Post by Levett » Thu Feb 06, 2014 6:45 am

That is so cool, Barry.

Thanks much.

Lev

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Re: madsinger monthly report (January 2014)

Post by Bounca » Thu Feb 06, 2014 7:05 am

Hi:
We have created a new page in the wiki, devoted to consolidating madsinger's monthly reports for easier access. Here is the current early status of the page: Madsinger monthly reports - Bogleheads.
Very awesome thank you and thank you Brad.

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Re: madsinger monthly report (January 2014)

Post by investor » Thu Feb 06, 2014 12:02 pm

OUTSTANDING.... Many thanks

investor

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Re: madsinger monthly report (January 2014)

Post by madsinger » Fri Feb 07, 2014 10:52 am

Barry Barnitz wrote:Hi:
We have created a new page in the wiki, devoted to consolidating madsinger's monthly reports for easier access. Here is the current early status of the page: Madsinger monthly reports - Bogleheads.

regards,
Thank you Barry, and to all of the others who have added the old links to the Morningstar forums, posted all the cool charts, and did such a great job. I've had nothing to do with this (beyond giving my "okay" upon being politely asked if this was okay). I'll start learning how to use wiki and trying to contribute to the page.

Gosh...now it looks so....official!

-Brad.

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