Interestingly, Saul portfolio performance bears a strong resemblance to the behavior of aggressive growth funds. Take the FDN ETF, for example. FDN invests in aggressive growth with a large stake in online giants like AMZN, FB, GOOG, NFLX and others.
I was asked if I had more than 5 years of data and I actually do. I have the last 10 years.
Wow, #6, I was the one that asked for more years of data if you had it.
I find that correlation (for the last 10 years) to be incredible! It looks like someone should be able to get results similar to Saul’s recent results by investing in the FDN ETF. I may start dollar cost averaging into this fund.
Yeah, yeah, I know, past results are not indicative of future, blah, blah, blah.
What amazes me even more when comparing the FDN ETF to Saul’s results, as I just briefly looked at the FDN, is that their uncommonly accurate correlation was achieved, when currently, I think Saul only owns 1 of their current top 10 holdings!
And I’m completely guessing here, but based on my reading this board for almost 2 years now, I would think over the past 10 years, at any one time, Saul probably never owned more than maybe 1-3 of the same stocks as were in the FDN.
To be invested in almost completely different stocks and attain almost the same results really amazes me! Maybe it shouldn’t, but that seems really rare to me.
FDN: “The investment seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of an equity index called the Dow Jones Internet Composite Index”
That index is also DJINET. It contains 41 internet-related large companies, and constituents are adjusted quarterly. While I’ve been able to find a list of constituents, I haven’t been able to find a list with current weightings.
Unless I got my math wrong, the end result is quite a bit different.
One results in a total gain of 65.3% over the 10-year period and the other in a 249.9% gain.
Or put differently, average annual gains of 5.2% vs. 13.3%.
Seems like the related DJECOM (“Dow Jones Internet Commerce Index”) has done even better, but I cannot find an ETF or similar if one wished to purchase into this vehicle.
correlation is a lot easier to prove than causation
AI and machine learning works entirely on correlation. But they look at lots of correlations
As of March 2012 Google has scanned more than 20 million books.
Watson’s data base a few years back consisted of 200 million pages of documents, so it’s likely considerably more now
FDN really has me interested. Right now 95% of my retirement money is in index funds. The remaining 5% is being used to learn how to invest. As I get to retirement I would like to manage my full portfolio like you all are doing (I am 49 right now). I have a solid 10 years to learn this investing game (I plan to retire at 60). I just do not have enough money in my learning account to buy all of F.A.N.G. which I would like to do. FDN would allow me to get that exposure.
What amazes me even more when comparing the FDN ETF to Saul’s results, as I just briefly looked at the FDN, is that their uncommonly accurate correlation was achieved, when currently, I think Saul only owns 1 of their current top 10 holdings!
I had the same thought as well. How can this be? I kinda stumbled upon it when I noticed that Saul made 51% in 2013 and FDN made 53%. That caught my attention so I decided to look further.
Just like in science, this correlation suggests an hypothesis or further study:
Is it the case that sector selection overwhelms individual stock picks?
Is it enough to just do aggressive growth instead of jumping in and out?
I own IJS and SMH. The ETF expense ratio is about 1/2 of FND for IJS and slightly less for SMH. FND has done about the same as SMH and better than IJS over 5 years. Has grown the same as SMH and better than IJS over 2 years and not as good is either IJS and SMH over the past year.
Unless I got my math wrong, the end result is quite a bit different.
One results in a total gain of 65.3% over the 10-year period and the other in a 249.9% gain. Or put differently, average annual gains of 5.2% vs. 13.3%.
You know what? Your numbers are correct! I verified it independently and got the same results as you.
In the last 10 years, Saul performance averaged 5.2% a year whereas FDN logged 13.3% average gain per year. That is a very significant beat.
Looking closer at the numbers, the separation between the two started in 2010-2011 where FDN did far better. Then it was small incremental gains from there and the magic of compounding.
For example, in 2016 FDN did 22% to Saul’s 16%. It does not sound like much but if you string a few of those together year after year, you start getting some serious separation, which is what happened here.
I still think the close similarity of performance of FDN and SAUL is a strange coincidence as the portfolios of FDN and VGT are much closer, both consisting of top technology stocks.
$10,000 invested in each system would yield $34,991 in one and $16,563 in the other (and that doesn’t account for the SA/RB/etc subscription costs).
2008 explains a chunk of this difference, but not all. Had both portfolios taken a 44% loss in 2008, the yields would have been $34,991 versus $24,690.
Not criticizing, but the OP seems to misdirect the comparison.
