Correction in my portfolio end of April, and other reflections
I’m embarrassed to say that there was a small error in my end of month summary. I had told you I was up 24.8% at the end of the month, which was incorrect.
I discovered the error after the close yesterday (Monday), when my daily spreadsheet showed my portfolio up 27.8%. I said, whoa, my Schwab summary shows I should have been up about 2%, not 3%. I checked Monday’s totals and they coincided with Schwab’s totals, so I looked back at Friday’s spreadsheet, and sure enough, I had been up 25.8%, not 24.8%, and I simply mis-transcribed it to my end of the month totals. That’s old age! That also changes my portfolio totals for the 16 months to up 131.7% (1.842 times 1.258 equals 2.317).
Why am I telling you this? Well, if I discovered that I had given you a value incorrectly high I’d correct it, so I am fixing an incorrectly low value.
And, as an aside, I’m brought back to the discussion I was having with streina the last couple of days about how an individual can’t beat the indexes because mutual fund managers presumably can’t. And I see that Bill Mann contributed a great article expanding my reasons why mutual funds can’t, and why it doesn’t apply to us.
I note that all the indexes dropped on Monday by about 1%, and are all now in negative territory for the year, while I, and presumably you, added about 2%. So we gained a remarkable 3% on the indexes in a day. And here I am beating the averages by about 132% over the last 16 months, and a lot of you are doing about the same plus or minus 10%. And we have someone writing:
Sure one can beat the average mutual fund manager with all the overheads of their trade… but indexing is king in the long run. Anything else is just sport/fun/hobby. It’s merely statistics that bear this out. Not anecdotes.
I just LOVE it! Statistics prove it! I wonder how he thinks the indexes are going to overcome a lead of 132%, and over how much time. Or a 500% lead from 2000 to 2010 (through the 2008 crash). But statistics prove it!
And we have someone else pointing out how, if we had just randomly selected the exact correct set of criteria at the beginning of the year we could have picked a portfolio of stocks that would have done as well as we’ve done. But of course he hadn’t done that at the beginning of the year. That was fine-tuning his selection looking backward, with his program picking how well each criteria had done over the four months, in order pick the exact correct criteria to use for how stocks had done for those four months. It’s easy to pick what was going to do well looking backward.