madsinger monthly report (May 2013)

[madsinger]

Here is a big fat collection of portfolios, with their May 2013 returns, 2013 YTD return, and annualized returns since 1999, 2003, 2008 and 2010 (14 years 5 months, 10 years 5 months, 5 years 5 months, 3 years 5 months). 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 60/5/3/32 stock/REIT/PM/bond.

-Brad.

Code: Select all

                                    CAGR    CAGR    CAGR    CAGR
                   May     YTD      since   since   since   since
                   2013    2013     2010    2008    2003    1999
Hot Hands          5.52%  22.27%   15.61%   0.76%  12.07%  11.97%
Sheltered Sam      0.43%  11.65%   12.22%   3.46%  10.14%   7.07%
VFINX              2.33%  15.30%   14.00%   4.15%   8.16%   3.78%
                  
Newsletter G       2.02%  16.00%   12.47%   4.01%  10.16%   8.99%
Newsletter G-IND   1.60%  14.40%   13.80%   4.00%   9.81%   5.63%
s&d               -0.50%   8.65%   10.58%   4.20%   9.72%   7.22%
3 fund             0.02%   8.59%    9.70%   3.47%   8.79%   5.26%
LS G               0.24%   9.14%   10.43%   2.63%   7.96%   4.52%

Code: Select all

Newsletter CG      1.60%  14.40%   12.00%   4.40%   9.26%   7.32%
Wellington         0.66%  10.20%   11.02%   5.80%   8.87%   7.16%
coffeehouse       -0.37%   7.47%   10.52%   5.70%   8.70%   7.03%
STAR               0.35%   7.69%    9.87%   4.81%   8.13%   6.36%
LS MG             -0.27%   6.62%    9.27%   3.38%   7.30%   4.86%
                  
Wellesley         -0.87%   5.12%   10.43%   7.35%   7.41%   6.95%
Newsletter Inc     0.28%   9.10%   10.85%   5.19%   7.24%   5.19%
LS CG             -0.73%   4.08%    7.62%   3.60%   6.27%   4.86%
                  
madsinger          0.55%   7.96%    9.93%   4.17%      

[madsinger]

We're seeing a big spray in returns this year...US stocks up 15%-18%... Total Int'l about 3.4% with Emerging Markets down over -5%. Total bond is down -1.7% for the year. REITs fell about -6% for the month, Precious Metals fund down almost -25% YTD.

This month, it was a sharpening of the YTD trend. US stocks up strongly, bonds down. For the portfolios, the more stocks, the better return, the more bonds, the worse. The portfolios holding REITs (coffeehouse, sheltered-sam, madsinger) felt that impact this month.

madsinger's overweighting of small US helped this month, as did the shorter term bonds (compared to longer bonds).

US stocks are "way ahead" this year of most other asset classes in the portfolios, so tracking error to the major US indexes looks larger this year (and negative!) compared with recent years.

-Brad.

[nirvines88]

What is the "hot hands" portfolio?

[Levett]

"What is the "hot hands" portfolio?"

http://www.youtube.com/watch?v=-gg6f9eUU1A

It's run by the unmentionable because it appears to make so many BHers uncomfortable: Dan........Wiener (not the ex-congressman from NY who has mayoral aspirations, or is it palpitations? ).

Lev

[investor]

Hot Hands is a momentum fund that changes each year. Generally an active managed fund and as stated above is selected by DW.

investor

[investor]

And Wellington keeps ticking along.

Thanks Brad

investor

[nirvines88]

"What is the "hot hands" portfolio?"

http://www.youtube.com/watch?v=-gg6f9eUU1A

It's run by the unmentionable because it appears to make so many BHers uncomfortable: Dan........Wiener (not the ex-congressman from NY who has mayoral aspirations, or is it palpitations? ).

Lev

Well, that video has me convinced - with the help of a margin account, I plan on going 120% hot hands portfolio.

[madsinger]

What is the "hot hands" portfolio?

"Hot Hands" is not really a "portfolio". This line is tracking what happens when you buy the "best performing diversified Vanguard stock fund" from one year, and hold it for the next year. This year, this fund is "Capital Value" fund. Like any "less diversified" portfolio, it's returns vary widely, outperforming "the market" some years, and underperforming others. From 1999-2006, it outperformed the market, by a very wide amount. From 2007-2012, underperformed by a rather wide amount. This year, it's surpassing the market by about 7%. I track it for educational purposes, but would not recommend this as an "investment portfolio".

-Brad.

[garlandwhizzer]

"Hot hands" seems to capture the elusive "momentum" factor. Would be interested in Larry's comments on this since he has mentioned that factor on the forum. I am not a momentum investor and never will be, but the long term out-performance of "hot hands" relative to the other portfolios mentioned is interesting. Of course, it could crash tomorrow.

Garland Whizzer