madsinger monthly report

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madsinger
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madsinger monthly report

Post by madsinger »

Here is a big fat collection of portfolios, with their November 2009 returns, 2009 YTD return, and annualized returns since 1999, 2001, 2004 and 2006 (10 years 11 months, 8 years 11 months, 5 years 11 months, 3 years 11 months). I broke them into four categories, roughly corresponding to 100/0, 80/20, 60/40, 40/60 stock/bond portfolios, sorted by Total Return since 2001. 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.

-Brad.

Code: Select all

                                   CAGR    CAGR    CAGR    CAGR
                  Nov     YTD      since   since   since   since
                  2009    2009     2006    2004    2001    1999
Hot Hands         6.62%   20.75%  -3.70%   5.46%   8.27%  10.87%
Sheltered Sam     5.42%   26.69%  -0.11%   4.66%   4.35%   5.27%
VFINX             5.98%   24.07%  -1.24%   1.70%  -0.31%   0.63%

                 
s&d               3.88%   23.60%   1.84%   5.58%   5.16%   5.98%
Newsletter G      5.77%   30.10%   1.10%   5.14%   3.56%   7.68%
3 fund            4.27%   24.51%   2.32%   5.08%   3.40%   3.79%
Newsletter G-IND  4.73%   28.30%  -0.19%   4.27%   3.26%   2.89%
LS G              4.76%   23.35%   0.25%   3.35%   2.05%   2.64%
                  
Wellington        4.54%   21.75%   4.28%   5.84%   5.70%   6.00%
coffeehouse       3.80%   18.44%   2.88%   5.24%   5.47%   5.89%
STAR              3.78%   23.40%   2.46%   4.79%   4.38%   5.22%
Newsletter CG     5.21%   25.30%   1.16%   4.35%   3.32%   5.67%
LS MG             4.02%   19.74%   1.76%   3.86%   3.09%   3.50%
                  
Wellesley         3.21%   16.04%   5.42%   5.45%   6.04%   5.94%
LS CG             3.11%   17.11%   2.83%   3.96%   3.74%   4.05%
Newsletter Inc    3.69%   20.80%   1.32%   3.30%   3.53%   3.43%
                  
madsinger         3.87%   23.71%   1.05%

Last edited by madsinger on Tue Dec 01, 2009 6:13 pm, edited 2 times in total.
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Post by madsinger »

Another strong month...every "fund" in the portfolios up. Large caps up near 6%, small caps 3-4%, precious metals fund up over 14% for the month (and 77% YTD!)

No complaints here...although I'd rather have a "steadier" ride (meaning people aren't getting too enthusiastic or too pessimistic). But, that's stock market investing....

-Brad.
Wagnerjb
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Post by Wagnerjb »

Wow. Kinda stunning how lousy the "Hot Hands" fund has done over the past 4 years. By far the worst performer of any of the equity funds or allocations. Glad I didn't chase performance in that strategy :D
Andy
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Post by gkaplan »

See you next month, Brad.
Gordon
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madsinger
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Post by madsinger »

Wagnerjb wrote:Wow. Kinda stunning how lousy the "Hot Hands" fund has done over the past 4 years. By far the worst performer of any of the equity funds or allocations. Glad I didn't chase performance in that strategy :D
Hey...it was the number one performing "portfolio" last month! Of course, it is a single fund, and not a "portfolio". I don't think anyone would suggest this approach as an "all in" allocation of your money.

Wellington and Wellesley just keep marching along. Although I'm an asset class junkie who favors passive funds, they do make a case for themselves, don't they?

-Brad.
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Post by paulob »

November was the 2nd strongest month this year for my portfolio. Only May had a better return. Interesting, November was by far the strongest month for my momemtum strategy in 2008.
Paul
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bilperk
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Post by bilperk »

Wagnerjb wrote:Wow. Kinda stunning how lousy the "Hot Hands" fund has done over the past 4 years. By far the worst performer of any of the equity funds or allocations. Glad I didn't chase performance in that strategy :D
Thank goodness most of us don't rely on 4 year performance. Now the 6, 9, and 11 year performance, that's a different story.

This year's Hot Hands, Dividend growth, could hardly be called performance chasing.

Two large blend funds from 2008-today: 500 index turned 10K into $7912; Div Growth $9117. 15% more in just two years.

Or if you would rather use Dividend appreciation Index: 10K = $8783 or 3% difference.

best,
Bill
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Bounca
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Post by Bounca »

Checking in…..

IRA (approx 70/30 AA)
<b>Month 3.67 %
YTD 23.02 %</b>
Contains:
20% BND
5% BSV
5% TIP
5% WTMIX (Westcore Microcap)
5% DLS
10% VEA
5% VWO
5% VNQ
5% VBR
35% VTI
----------------------------
ROTH (approx 75/25 AA)
<b>Month 3.68 %
YTD 24.65 %</b>
Contains:
Roughly 60% EXHAX (Manning and Napier Pro Blend Max)
Roughly 40% EXBAX (Manning and Napier Pro Blend Moderate)
Levett
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Post by Levett »

Hi Brad,

I appreciate your contributions, as always.

And, yes, I also agree with your observation: "Wellington and Wellesley just keep marching along. Although I'm an asset class junkie who favors passive funds, they do make a case for themselves, don't they? "

They are wonderful additions to a retiree's portfolio. Bob U.
There are some things that count that can't be counted, and some things that can be counted that don't count.
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Post by White Coat Investor »

For the first time ever I think my portfolio is ahead of the rest of them YTD.

Pretty impressive Wellesley return though for the year. Up 16% with only 35% stock.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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Post by unclemick »

EmergDoc wrote:For the first time ever I think my portfolio is ahead of the rest of them YTD.

Pretty impressive Wellesley return though for the year. Up 16% with only 35% stock.
Yeah - I usually do that razz on another forum. But it's had Russian hacker trouble of late so my standard mantra of pssst- you know who hasn't been used lately.

heh heh heh - so who say's the value premium is dead? :roll: :wink: . Saint's ain't doing bad either.
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Post by Petrocelli »

I am up 21.66% YTD as of the end of November with 48% cash and bonds. Thus, I have about the same return as wellington with about 30% more bonds.
Petrocelli (not the real Rico, but just a fan)
Wagnerjb
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Post by Wagnerjb »

bilperk wrote: Thank goodness most of us don't rely on 4 year performance. Now the 6, 9, and 11 year performance, that's a different story.
Sure you do. Maybe not you personally, but most performance chasers only jump in AFTER a string of great performance happens. The morningstar data on "investor returns" vs. fund returns confirms this (as if we needed proof of this very human trait). The great performance happened in the early 2000 time frame, then the performance chasers starting following, then it fell off a cliff.
Andy
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Post by Kenster1 »

How about Mel's Unloved Midcaps? Midcaps are still my favorite sweetspot. Oh and VIMSX (VG Midcap Index) is up 34% YTD. Nice!

Let's revisit the 10 year annual returns:

VFINX: -0.59% (S&P 500 index)
$10k invested would be worth about $9,425 now.

VIMSX: +6.19% (Midcap index)
$10k invested would be worth about $18,200 now.

NAESX: +4.88% (Smallcap index)
$10k invested would be worth about $16,000 now.

In fact my largest index allocation in my taxable account is the Midcap index.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.
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Post by bilperk »

Wagnerjb wrote:
bilperk wrote: Thank goodness most of us don't rely on 4 year performance. Now the 6, 9, and 11 year performance, that's a different story.
Sure you do. Maybe not you personally, but most performance chasers only jump in AFTER a string of great performance happens. The morningstar data on "investor returns" vs. fund returns confirms this (as if we needed proof of this very human trait). The great performance happened in the early 2000 time frame, then the performance chasers starting following, then it fell off a cliff.
This is always your argument Andy; no one gets in until all the upside is gone. Well someone was creating that upside. I was in International explorer before it became a "hot hand" and IIRC you yourself got into it after a couple of good return years. Of course, you had your reasons :lol:

From Dan Weiner:

"Here's the bottom line: Following a “hot hands” investment strategy at Vanguard from the end of 1981, when you would have put your money into Windsor (VWNDX), through the end of 2008, when your money would have been in Growth Equity (VGEQX), would have netted you a total return of 5,503% compared with a return of 1,262% for Vanguard Total Stock Market Index (VTSMX)."

http://www.moneyshow.com/investing/arti ... 1209-16128

Looks like falling up the cliff to me........

best,
Bill
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Post by goggles »

I have always suspected life would be easier if I just switched to all Wellington. Now it turns out that not only would life be easier, I'd have a lot more money. Sigh.

Brad, thanks for doing these reports! Interesting stuff.
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Post by Wagnerjb »

bilperk wrote: This is always your argument Andy; no one gets in until all the upside is gone. Well someone was creating that upside. I was in International explorer before it became a "hot hand" and IIRC you yourself got into it after a couple of good return years. Of course, you had your reasons :lol:
I didn't say "no one", I just said the performance chasers. Disciplined investors are in the fund before it gets hot, and stay after it has cooled off. That's because they buy for reasons other than performance chasing. I am still in VINEX, since I bought in as a move to add small caps to my international allocation. How about you :D

By the way, do you remember the post I authored on the Clipper fund around 2004? My analysis of the assets in Clipper showed a massive inflow after the short-term outperformance. You see that pattern repeated so many times that you don't even need to look anymore. Of course, there were long-term investors in Clipper before it became hot, but they were obviously there for reasons other than performance chasing. I consider those investors to be very different from the much larger number who jumped in after the fund got hot.

Best wishes.
Andy
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Post by Kenster1 »

goggles wrote:I have always suspected life would be easier if I just switched to all Wellington. Now it turns out that not only would life be easier, I'd have a lot more money. Sigh.

Brad, thanks for doing these reports! Interesting stuff.
That's Right -- and look at how many people panicked over the past year including many Bogleheads who decided to join the party in further reducing their stock allocation.

Then look at the Wellington Fund where the managers stuck things thru their 60/40 - 65/35 stock/bond allocation even under extremely difficult conditions.

It's as easy as the Chia Pet --- just add water and watch it grow.

I don't care that the LifeStrategy Funds are based on index funds --- I do not like their Asset Allocation Fund which does nothing but switches between the S&P 500 and Bonds and has performed poorly for such a fund. One day the LS Moderate Growth fund can have 40% in bonds -- 6 months later you might only be holding only 15%. They'd be better off fixating the allocation to something like US + International Smallcap Value.

From a Stock/Bond allocation perspective --- I think Wellington is more passive than the Lifestrategy Index funds which can swing around depending on what the AA fund does.

YTD, 1-yr and 3-yrs ----- the Asset Allocation Fund has performed WORSE than the S&P 500.
Last edited by Kenster1 on Thu Dec 03, 2009 1:45 pm, edited 1 time in total.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.
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Post by bilperk »

Wagnerjb wrote:
bilperk wrote: This is always your argument Andy; no one gets in until all the upside is gone. Well someone was creating that upside. I was in International explorer before it became a "hot hand" and IIRC you yourself got into it after a couple of good return years. Of course, you had your reasons :lol:
I didn't say "no one", I just said the performance chasers. Disciplined investors are in the fund before it gets hot, and stay after it has cooled off. That's because they buy for reasons other than performance chasing. I am still in VINEX, since I bought in as a move to add small caps to my international allocation. How about you :D

By the way, do you remember the post I authored on the Clipper fund around 2004? My analysis of the assets in Clipper showed a massive inflow after the short-term outperformance. You see that pattern repeated so many times that you don't even need to look anymore. Of course, there were long-term investors in Clipper before it became hot, but they were obviously there for reasons other than performance chasing. I consider those investors to be very different from the much larger number who jumped in after the fund got hot.

Best wishes.
Hi Andy,

I'm still in international explorer and I have never followed HH per se. I just seem to often have the fund already, like this year's (Dividend Growth) which I've had for several years. I have no interest in Growth equity fund or any growth fund preferring blend funds and value funds of the active persuasion.

Anyway, I guess I'm confused as to whom your comment was aimed at originally, since we have no performance chasers here :roll:

best,
Bill
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Post by paulob »

Wagnerjb wrote:Wow. Kinda stunning how lousy the "Hot Hands" fund has done over the past 4 years. By far the worst performer of any of the equity funds or allocations. Glad I didn't chase performance in that strategy :D

By the same token, Sheltered Sam and S&D trailed Wellington and Wellesley considerably during the same time period. Are you also "glad" you didn't invest in these stategies during this time period? Or maybe you did?
Paul
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bilperk
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Post by bilperk »

goggles wrote:I have always suspected life would be easier if I just switched to all Wellington. Now it turns out that not only would life be easier, I'd have a lot more money. Sigh.

Brad, thanks for doing these reports! Interesting stuff.
If you run a growth of 10K chart on Wellington vs Wellesley over the entire 39 year history of Wellesley, you will see that their returns are amazingly close. Of course, the next 39 years may not be the same :lol:

best,
Bill
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Post by stratton »

goggles wrote:I have always suspected life would be easier if I just switched to all Wellington. Now it turns out that not only would life be easier, I'd have a lot more money. Sigh.

Brad, thanks for doing these reports! Interesting stuff.
I use Wellesley in a small inherited IRA where I have to take RMDs. Set it and forget it.

BTW the ~5% foreign bonds in Wellesley are hedged according to the annual (?) report that just showed up.

Paul
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Post by Wagnerjb »

paulob wrote:
Wagnerjb wrote:Wow. Kinda stunning how lousy the "Hot Hands" fund has done over the past 4 years. By far the worst performer of any of the equity funds or allocations. Glad I didn't chase performance in that strategy :D

By the same token, Sheltered Sam and S&D trailed Wellington and Wellesley considerably during the same time period. Are you also "glad" you didn't invest in these stategies during this time period? Or maybe you did?
First of all, those comparisons aren't meaningful....comparing an 80% equity portfolio with one with maybe 40% equity.

In reality, Wellington and Wellesley probably outperformed a comparable passive portfolio by maybe 1% during that time. That means the odds are still bad for this passive vs. active choice. I have a chance at a large loss with Hot Hands, or a small gain with Wellington or Wellesley. I don't like those odds....that's why I think passive is preferable.

Best wishes.
Andy
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Post by paulob »

Andy,
Sure those comparisons are meaningful. I understand that investors should compare strategies with similiar risk components. But when an 80% equity strategy lags significantly behind a 40% strategy, many people question whether the strategy is correct. That's the same message I took from your post, but I knew it was only directed at active strategies.

I don't think the four year period should be viewed in isolation. If so, I want the 40% equity strategy. But that is not what I believe the future holds. For me, I don't have any reason not to anticipate RTM. And I believe it will be evident in the next four year period.
Paul
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