madsinger monthly report (December 2018)

[madsinger]

Here is a big fat collection of portfolios, with their December 2018 returns, 2018 YTD return, and annualized returns since 1999, 2009, 2014, and 2016 (20 years, 10 years, 5 years, 3 years). 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 50/6/11/33 stock/REIT/Gold/bond. The madsingerPP portfolio is the "permanent portfolio" portion of my portfolio consisting of 25% each of stock, long bond, cash, gold.

-Brad.

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                                    CAGR    CAGR    CAGR    CAGR
                   Dec      YTD     since   since   since   since
                   2018     2018    2015    2013    2008    1999
VFINX             -9.03%   -4.52%   9.11%   8.35%  12.98%   5.51%
Sheltered Sam     -8.56%   -9.39%   7.11%   5.53%  10.95%   7.05%
Hot Hands         -6.89%  -12.69%  -1.43%   0.09%   8.98%   9.41%
                    
Newsletter G      -9.19%   -6.10%   8.00%   7.21%  12.65%   9.07%
Newsletter G-IND  -9.14%   -6.50%   8.06%   6.79%  12.64%   6.46%
3 fund            -5.88%   -6.99%   6.31%   4.74%   9.30%   5.53%
s&d               -6.22%   -8.58%   5.31%   4.38%   9.27%   6.77%
LS G              -5.69%   -6.90%   6.33%   4.95%   9.51%   5.04%

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Newsletter CG     -7.23%   -3.80%   8.01%   7.16%  11.71%   7.70%
Wellington        -4.88%   -3.42%   7.14%   6.21%   9.87%   7.15%
STAR              -4.73%   -5.34%   6.07%   5.05%   9.19%   6.31%
coffeehouse       -4.76%   -5.29%   4.86%   4.54%   8.48%   6.54%
LS MG             -3.87%   -4.91%   5.43%   4.52%   8.17%   5.03%
                  
Newsletter Inc    -5.98%   -2.60%   6.69%   6.58%   9.99%   5.82%
Wellesley         -2.08%   -2.57%   5.07%   4.89%   7.94%   6.43%
LS CG             -2.01%   -2.95%   4.47%   4.01%   6.74%   4.75%
                  
madsinger         -3.48%   -5.68%   5.38%   3.80%   8.68%   
madsinger PP       0.48%   -1.19%   4.99%         

[madsinger]

Well...here are the numbers for December and the year ending 2018. Unless you were hiding for the whole month (or perhaps you went into hiding after December 24th), these numbers are not surprising. US stocks down -9% to -11% for the month. Internationals fell "only" around -5% for the month. Bonds were positive in December.

For the year, US stocks had a fairly wide range....S&P 500 down about -4.5%, small caps about -9% and small cap value down over -12%. International stocks were down -14% to -15% (International Explorer fund down -23%). REITs down about -6%.

The permanent portfolio finally got a chance to show what it can do when stocks fall. While the S&P 500 was down about -9% for the month US long treasuries were up about +5.5% and gold was up about 5%. For the month, the PP was positive by about 0.5%. For the year, cash ended up being the only positive asset class (in my case, up +1.4%), while long bonds and gold were each down a little over -1% and S&P 500 down almost -4%. (The stock portion of my PP looks better than the S&P 500 return for the year because of rebalancing sales in March, July, and September).

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           STOCK  LONG BOND  CASH    GOLD   PORTFOLIO 
January    5.69%   -3.23%    0.10%   3.28%    1.48%
February  -3.72%   -2.92%    0.10%  -2.01%   -2.17%
March     -2.52%    2.79%    0.11%   0.55%    0.16%
April      0.37%   -2.00%    0.10%  -0.86%   -0.61%
May        2.41%    1.86%    0.12%  -1.27%    0.79%
June       0.58%    0.63%    0.08%  -3.53%   -0.52%

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July       3.66%   -1.30%    0.10%  -2.30%    0.10%
August     3.26%    1.25%    0.16%  -2.04%    0.66%
September  0.52%   -2.74%    0.11%  -0.61%   -0.68%
October   -6.88%   -2.78%    0.12%   2.10%   -1.89%
November   2.03%    1.76%    0.16%   0.34%    1.05%
December  -9.07%    5.55%    0.12%   4.95%    0.47%
               
YTD       -3.87%   -1.28%    1.39%  -1.07%   -1.19%

[madsinger]

Very short term rebalancing bonus!

I looked the annual returns for my stock, bond, and gold holdings in the PP. As noted above, sales of stocks three times throughout the year resulted in having "rate of return" of -3.87% while the Vanguard S&P 500 fund returned -4.43%. Similarly, the Vanguard Long Term Treasury index fund returned -1.67%, while rebalancing purchases in March and July resulted in an internal rate of return of -1.28%. Finally, gold, as followed using the IAU etf returned -1.76% for the year, and in the PP a rebalancing purchase in July resulted in a return of -1.07%. Of course, this is just a short term observation in a volatile year, but since I so rarely get "real" data to observe this, it was an amusing observation.

-Brad.

[madsinger]

Hot Hands?

I have sorted the Vanguard stock funds by 2018 return, and have found only three funds with positive returns...one "specialty fund" and two diversified funds. I will be choosing the highest returning diversified fund for 2018 as the Hot Hands fund that I will track for 2019. Whether or not this is the fund selected by the newsletter, I do not know.

-Brad.

[Peculiar_Investor]

Wiki has been updated to include this report, see Madsinger monthly reports.

[Elysium]

Begs the question, why doesn't the newsletter portfolio get any discussion on this board? It appears that at the very least it merits same attention as all the discussions around slide & dice, factor investing, alternatives, etc etc. It does look like there is an index option that has done as well as the others, and that may merit some discussion as a BH type of portfolio. Thoughts

[ResearchMed]

Begs the question, why doesn't the newsletter portfolio get any discussion on this board? It appears that at the very least it merits same attention as all the discussions around slide & dice, factor investing, alternatives, etc etc. It does look like there is an index option that has done as well as the others, and that may merit some discussion as a BH type of portfolio. Thoughts

If you mean the "contents" of the newsletter, it's available by paid subscription, and there would be issues with copying.
And I think most here agree that it isn't right to post the specific recommendations.
Otherwise, why would others who subscribe continue to do so, etc.

RM

[Elysium]

Begs the question, why doesn't the newsletter portfolio get any discussion on this board? It appears that at the very least it merits same attention as all the discussions around slide & dice, factor investing, alternatives, etc etc. It does look like there is an index option that has done as well as the others, and that may merit some discussion as a BH type of portfolio. Thoughts

If you mean the "contents" of the newsletter, it's available by paid subscription, and there would be issues with copying.
And I think most here agree that it isn't right to post the specific recommendations.
Otherwise, why would others who subscribe continue to do so, etc.

RM

I wasn't asking anyone to post copyright material. I think the overall approach merits more attention given the success over time, but I understand why it is difficut to discuss the topic since there is a paid subscription associated with the content.

[Castanea_d.]

Thanks for doing this, madsinger, and especially for the long-term followups. This is valuable information.
I am glad to see the madsingerPP showing its strengths in the recent downturn.

[WoodSpinner]

Which Newsletter ? I would like to do some further analysis and perhaps subscribe?

[ResearchMed]

Begs the question, why doesn't the newsletter portfolio get any discussion on this board? It appears that at the very least it merits same attention as all the discussions around slide & dice, factor investing, alternatives, etc etc. It does look like there is an index option that has done as well as the others, and that may merit some discussion as a BH type of portfolio. Thoughts

If you mean the "contents" of the newsletter, it's available by paid subscription, and there would be issues with copying.
And I think most here agree that it isn't right to post the specific recommendations.
Otherwise, why would others who subscribe continue to do so, etc.

RM

I wasn't asking anyone to post copyright material. I think the overall approach merits more attention given the success over time, but I understand why it is difficut to discuss the topic since there is a paid subscription associated with the content.

The "overall approach" is that the newsletter writer has, for quite a few years now, selected a few portfolios (as named by madsinger), and kept them relatively constant over the years. Each portfolio has just a few holdings. There are occasional changes in weighting or even a change in composite fund(s), but for the most part it's a "buy and hold" strategy.

Another benefit is that he also includes suggested alternate funds where his portfolios include a closed fund. There are a few other "other suggestions".
We've found one long term winner in there, quite some time ago.

However, it is not at all an index fund type of strategy.

The only other aspect is the "hot hands fund". He publishes the "new year" version, but points out that, at least historically, the "October" version has done slightly better (not sure if this still holds), but has had more of a down side.

So by naming the funds, one pretty much gives away the goods, and that's not really kosher.

And the newsletter has what was, especially when we were starting out seriously, a lot of commentary that we found helpful.
Still do, on occasion, but to a much lesser degree.

IF one were really curious, one could subscribe for one year, and then continue to hold the portfolio(s) of choice.
But if one does that, wait for one of the frequent SALES. There is no point in paying the much higher "rack rate", given the frequent and substantial discounting.
I happened upon a $49 annual rate, by far the lowest I've seen, and re-subscribed. Won't do that again at the regular, even sale, rates. But for $49, I might do it again.

RM

[ResearchMed]

Which Newsletter ? I would like to do some further analysis and perhaps subscribe?

Please keep in mind that it gets mixed reviews here on BH.
My opinion is posted above.

Google Dan Wiener and Independent Vanguard Investor Newsletter.

Do NOT pay the regular rate, which can be close to or more than $200/yr.
(If you click on a link to "get more info", then you'll also be "on the list" for [too many] ads that include the sales.)

He's also associated with a similar newsletter that focuses on Fidelity Funds.
I've thought of checking that out, given our experience with the Vanguard-based newsletter, but just haven't done so.

RM