I hate data, too. It"s obvious we shouldn"t actually compare the performance of actively managed funds, because it"s always thoseotherfunds that drag down the average.Fulorian said:Blah blah academic bullshit. It"s not hard to beat index averages by doing a little homework. Those statistics are compiled by PhD"s who scurried into academia after being failures at Wall Street. They make up shit like the efficiency frontier to feel superior about their failures. Trust me, I know: I live it every day (MS Finance & CFA 1 almost complete).
I know 3 months is a pretty short time, but I was intrigued by your choices and figured I"d look at how they"ve been doing so far.Here"s a few stocks I 500% guarantee exceed their benchmarks over the next 5 years (on both a risk adjusted and total return basis). I"m not saying you should own them (although I would, and do), but at least study their characteristics:
November 1: $3.80Ford (F) - Trades at 5 times trailing earnings, has amazing earnings growth, has the best management in the United States. Has pulled off a miracle, and an equivalent valuation of it against the GM IPO puts the fair price at $30/share.
Nov 1: $161.52Goldman Sachs (GS) - Best financial company in the United States. The VERY best and brightest, pulls off a 20% ROE like clockwork but is priced at less than 1.5x book.
Nov 1: $19.70Hyundai Motor (005380:KS - you have to have an international broker to touch it, but you can still find financial statements and study what they"re doing/valuations) - Best profit margins in the business, market share is growing at the fastest rate any automaker has seen since Japan entered the US market in the 70s. 3x US market share in less than a decade.
Nov 1: $8.78KKR Financial (KFN) - Personal favorite. Difficult to understand their financials, but they"re trading very cheap for what they are. Mainly only held by institutional investors, less predictable day-to-day movements as a result, but a long term solid company still stuck at a discounted price from the crash.
If you had equally distributed $100k in your 4 stocks ($25k each), this is the performance:
Will check back at the end of the year.Every single one of these will have doubled by 2015. Some will have doubled by the end of 2011. The S&P won"t. And academics will, 4 years later, tell you that a fund composed of these 5 stocks and nothing else are outliers, not statistically significant, and were impossible to predict in 2010.
By the way, to compare your portfolio to some benchmark:
Nov 1: 11,124.62
But as I said, 3 months is a very short time. I"ll make a note to check back at the end of the year. I presume you meant these to be buy & hold stocks, so won"t be making any changes to your portfolio.