There was some discussion on the board just over a year ago about whether it was possible / easy / difficult to consistently beat the market.
At some point I suggested that it was easy to beat the market by simply choosing a portfolio of quality businesses and holding for the long term.
After a while I thought that, having made this suggestion, I should back it up.
I came up with a portfolio of $25,000 that would aim to beat the market over a 5 year timeframe (post 21799).
My last update was in April (post 26855).
The portfolio I proposed was as follows:
Value at % Value at Sept 2016 Change. Sept 2017 Adobe Systems (ADBE) 962.19 38.90 1,336.48 Amazon (AMZN) 2,405.40 19.12 2,865.31 Bank of Internet (BOFI) 1,006.65 21.01 1,218.15 Broadridge Financials (BR) 1,024.50 20.75 1,237.08 Casey's Gen. Stores (CASY) 1,054.89 -7.14 979.57 Chipotle (CMG) 825.46 -23.85 628.59 Disney (DIS) 1,017.17 8.25 1,101.09 Facebook (FB) 1,018.96 33.89 1,364.29 Google (GOOGL) 1,619.64 16.48 1,886.56 Mastercard (MA) 1,008.20 41.82 1,429.83 Middleby (MIDD) 1,496.28 -2.53 1,458.42 Mitek (MITK) 994.48 20.32 1,196.56 Markel (MKL) 1,845.04 14.49 2,112.39 Universal Display (OLED) 1,000.96 125.56 2,257.77 Starbucks (STBX) 977.04 3.30 1,009.28 Shake Shak (SHAK) 987.00 -5.62 931.53 Shopify (SHOP) 991.76 178.92 2,766.22 Transdigm (TDG) 1,724.40 7.63 1,855.97 Tesla (TSLA) 1,032.50 70.02 1,755.46 Under Armour (UA) 1,019.20 -58.14 426.64 Visa (V) 985.80 29.45 1,276.12 Totals $24,997.52 24.39% $31,093.31 S&P Gain 16.01% Difference 8.38%
Although a 24% annual return is rather humble compared to some of the results reported on this board - I’m quite satisfied. Especially so, because
I didn’t have a great start. The portfolio trailed the S&P by 2.17% after one month and then 7.22% after two months. But it has gradually made ground from there to be 8% ahead of the S&P today.
This is a long term buy and hold portfolio. I have not made any sales or additions since inception and it is unlikely that I will do so in the foreseeable future unless something extraordinary happens.
The portfolio is ‘real money’ in the sense that I do hold all of the stocks in my own portfolio to at least the value shown. But my holdings are not in the same proportion as in the example portfolio. I have much heavier weightings for BOFI and TSLA, for example. In my own portfolio I trimmed CMG when Monty Moran left, but I have since added back most of what I trimmed.
I also hold stocks and some option positions that are not in the portfolio. Over the last year I have started positions in BABA, CGNX, MELI, SQ, NVDA and ANET. I have some UK and European stocks, some ETFs, odd small holdings, and rump positions that serve as a reminder of past mistakes.
If you are curious about any of my picks, please feel free to fire away and I will answer as best I can.