I just wanted to say thanks to all the people that make this board what I believe to the best of its kind.
With what I have learned here and applied to my own trading, I managed to be up 15.5% on the year. It was the first year I have actively managed a portion of my own investments and it has been a very rewarding experience.
In all the years I have kept my savings with mutual funds, I have never had a return this big. There is something to be said about managing your own destiny, and I only hope I can become consistent over the coming years and start to allocate more and more to my own personal investment portfolio.
The main successes I have had are with SHOP, ANET, and SBNY. I also did very good with Canadian Bank Stocks (I am in Canada).
I am looking forward to improving my knowledge and hopefully being able to contribute more meaningfully to this group in the future.
With what I have learned here and applied to my own trading, I managed to be up 15.5% on the year
Mess:
Congratulations on your returns this year!
It is very important that you always compare your returns to the indexes IMO…how else are you going to know if you are doing any better than just buying an index and using all that extra time to be with family/friends/hobbies/etc??
For example, your return of 15.5% was good, but did you know the indexes were up as follows:
As I have mentioned before, Saul has a unique combination of savvy with investments AND he truly enjoys spending the time on his investments. BOTH of these character traits are REQUIRED to pull off what he is doing IMO…one without the other will not be routinely successful.
But IMO, it is crucial that every investor be honest with themselves on the sustainability of the effort to achieve results and the honest comparison with likewise stock indexes…what I call the “effort adjusted returns”
Wishing you, Saul and everyone on this board, a happy and prosperous new year!
We are past Thanksgiving Day, but I too want to thank the consistent contributors of this board. It truly is best in class. Year end is a good time to reflect and also be thankful for what we all have. Last year we hit a message board bump with some pretty strong criticisms of the BOFI drop and actions taken. But now BOFI hit a 52 week high just 3 trading days ago. BOFI and SWKS are my two best for the year.
This year the message board got a couple of belligerent members that surprisingly had a few supporters even though they were actively saying they wanted to disrupt the board’s purpose. I think Saul and most contributors did an excellent job of controlling and resolving that so this board could continue. With the help of Motley Fool who removed the postings.
I am very thankful for having found this board and for Saul’s altruistic and beneficent leadership of maintaining the board’s purpose. Happy New Year to all and remember… “Life moves pretty fast, if you don’t stop and look around once in awhile, you could miss it.”
I too am very thankful to Saul and this board. I have learned skills that will hopefully make me a better investor long term.
I do agree that one needs to know themselves and know what they are capable of both long and short term. Sustaining the amount of time and effort required is not possible for everyone.
I do think that ETF and index investing is a reasonable alternative for those that know that they cannot sustain the intensity or are not capable of the insight that people like Saul have but I also caution against the thought that because an ETF or fund had a spectacular year that one should feel that ones efforts were not worth it. and it is time to jump ship.
The Morningstar wide moat portfolio was mentioned and yes it had a great year at a 21% increase but in reality when annualized its returns are really not that great and depending on which wide moat portfolio is looked at it did not beat the S&P over the long term.
I had a good year but in part that was due to a fairly large (now trimmed) holding in NVDA - that was a fluke and does not make my portfolio one to emulate. I did way too much buying and selling and although some of those sells helped me, many hurt my returns. I will be concentrating on avoiding the gut instinct to sell going in to 2017. As long as we are learning and growing that is what matters.
<i>The Morningstar wide moat portfolio was mentioned
and yes it had a great year at a 21% increase but
in reality when annualized its returns are
really not that great and depending on which
wide moat portfolio is looked at it did not
beat the S&P over the long term.</i>
Thanks Craig:
But what data are you looking at?
The portfolio I referenced has handily beat
the S&P over past 11+ years:
S&P Wide Moat
2016 9.8 22.4
2015 1.4 -4.3
2014 13.7 9.7
2013 32.4 31.5
2012 16 24.5
2011 2.1 6.6
2010 15 8.5
2009 26.5 47
2008 -37 -19.6
2007 5.5 -1.3
2006 15.8 17.7
Sum 101.2 142.7
AVG 9.2 13.0
For example, your return of 15.5% was good, but did you know the indexes were up as follows:
S&P. 12%
Outperforming the S&P 500 by 3.5% is great! I only managed 5.8% underperforming all indexes but then, one of my largest positions (NVO) took a huge hit but it should recover in the next year.
My point is that while the comparison with indexes is interesting (I do it all the time), a one year period is just short time in a portfolio’s life cycle and January first is a very arbitrary date. Do it but but don’t take it too seriously. It’s having enough for retirement that counts. My 5.8% return paid my year’s expenses with some left over to fatten the portfolio.
My apologies, the data is was looking at was the Morningstar Wide Moat tracking index and the MOAT ETF which I guess must be a little different for the Morning Star Wide Moat Portfolio.
I still stand by my point and that is that it is easy to stand here with hind sight vision and say looking back that anyone who did not beat that index ( or the IJS ETF - another one widely quoted) should have been invested in that portfolio and let the market just work for them but in reality past performance does not equate to future performance and is not a guarantee of success.
I still stand by my point and that is that it is easy to stand here with hind sight vision and say looking back that anyone who did not beat that index ( or the IJS ETF - another one widely quoted) should have been invested in that portfolio and let the market just work for them but in reality
Agree with you there…what is good for the goose should be applied to the gander.
I suspect that most regular posters here actually enjoy the tussle of investing and the time requirements.
But surely there can be no reason not to apply a metric to how well one’s efforts are doing…and as you say, a single year isn’t proof of anything…but 11 years is certainly hard to argue
Hope you have a happy, healthy and prosperous new year!
BTW, Anyone with an iPhone, type in “happy new year” in as a text and send to anyone…never gets old
I still stand by my point and that is that it is easy to stand here with hind sight vision and say looking back that anyone who did not beat that index ( or the IJS ETF - another one widely quoted)
IJS was up 29.6% in 2016, handily beating all the major indices.
It is a departure from its historical average of 14.4% annual gain, but that average is not bad, either.
IJS tracks the performance of the S&P 600 Small Cap Value.
UR#6, I don’t want to send this thread off topic but I am wondering what your thoughts are for IJS with regards to new money. It seems like it has really gapped up hugely over the last 6 weeks or so and I am wondering if technically it needs to retrace some of that movement. Certainly as a stock I would betting/expecting it to revisit its 50 DMA before heading upwards. I am wondering if as an index that is more or less likely since it represents a bunch of stocks all or most of which would have gapped up pretty much. As Saul alluded to in the past he would see IJS more as a stock than as an investing mantra. I certainly would like to add to my holdings but am worried that buying in at this level would be a mistake. No real way of knowing I guess.
UR#6, I don’t want to send this thread off topic but I am wondering what your thoughts are for IJS with regards to new money.
I am with you on that one. This year was very unusual for Small Cap Value and over time it will revert to the mean, no question. I would not put new money to work in IJS unless it is a dollar-cost-averaging scheme of making small, periodic, equal contributions over a ten-year period.
OTOH, Small Cap Value stocks tend to make most of their money selling in the US, so these are immune to the ill-effects of the strong dollar, which could be an issue in 2017 for large multinationals.
There is published research that contends that Small Cap Value stocks, in aggregate, have returned 14.4% annually since 1926.
I believe that is the controversial French/Fama study. 1926 to 2016 is 90 years and none of us have that long an investing horizon but closer to 25 years which means we have to worry about bubbles and busts. The good thing about Small Cap ETFs is that they remove the survivorship issue. As a management consultant in the '70s one factoid that we kept in mind was that 75% of startups go bust in the first 5 years and 75% of those that go broke do so for lack of working capital (financing growth is expensive). The ETFs remove the worry about buying busts, the winners more than make up for them. But they don’t solve the problem of cycles, you still have to buy low, dollar cost average, or something.
I believe that is the controversial French/Fama study.
Correct. Not sure that it is controversial, though.
1926 to 2016 is 90 years and none of us have that long an investing horizon but closer to 25 years which means we have to worry about bubbles and busts.
People should start investing immediately after college, starting with the first paycheck. The investment runway oughta be stretched to 40+ years. But practically, you are correct, people don’t start early enough.
Even if we only consider the last 16 years, 10% annual average gain is pretty good. Think about what we have been through. The Tech bubble of 2000, Sept 11th terror attack, two wars, the meltdown of the banks in 2008 and the great recession. During that stretch, the S&P 500 only managed to rise 5% annually.
With what I have learned here and applied to my own trading, I managed to be up 15.5% on the year.
Hi Mess, I think you did great! You did a lot better than I did, and a lot better than the S&P 500 did too. Someone said the S&P was up 12%, but a simple check shoes that it finished last year at 2044 and this year at 2239. That’s up 9.5% and you beat that by 6%. Congratulations!
Someone said the S&P was up 12%, but a simple check shoes that it finished last year at 2044 and this year at 2239. That’s up 9.5%…
While the index numbers above are correct, in my view the purpose of a benchmark is to answer the question if all one’s stock picking, buying and selling outperforms the simple alternative: investing in the index. Investing in the S+P is easy, just buy SPY. As such, the total return including dividends of SPY last year is indeed 11.9%, or 12% when reinvesting the dividends paid throughout the year.
While the index numbers above are correct, in my view the purpose of a benchmark is to answer the question if all one’s stock picking, buying and selling outperforms the simple alternative: investing in the index.
Very good point. I’m going to switch to comparing vs. the index funds instead of directly against the indexes themselves, JPX for S&P 500. What do I use for
