2013 Performance Review
As my multi-year investing journey/experiment continues into 2014, I thought I’d take this opportunity to go over my 2013 performance, both to share with the community, also and to have a record I can come back to later.
My basic objective with CAPS is simply to determine whether or not I should invest on my own – or simply go with a low-cost index fund. I started this journey/experiment around 2012, and will continue it through about 2017. I will then examine my performance, and make a rational decision about my investment future. I’m a young, broke grad student, so this seems to be the perfect time to experiment with investing, before I actually have the opportunity to invest a lot of my own money in real life.
I primarily use two CAPs accounts, plus a newer virtual fund at Marketocracy.com to monitor my performance. Here are the results thus far:
My main CAPs page, JohnCLeven (this page), ended 2013 with an average score per pick of+2.98, and an accuracy of 67.09%, on 49 active picks, 37 ended, and 86 total picks. This is since inception, since I stupidly forgot to take down the performance numbers at the end of 2012. As a result of this post, I won’t be making that mistake again in 2014.
My other page, 20punches, didn’t have such a good year. The average score per pick was -0.51, and the accuracy was 33.33%, on 9 active picks, 0 ended, and 9 total picks. Despite, the underperformance, I’m pretty confident in the long-term future of this CAPs page.
I judge my two main CAPs pages on: 1) increase/decrease in average score per outperform pick, and 2) accuracy…not player rating.
Now onto my virtual fund:
2013 was a partial year for the virtual fund, located at marketocracy.com. From March 2nd, 2013 inception through then end of 2013, Teego Capital returned 24.07% (29.45% annualized) while the S&P 500 returned 23.89% (29.23% annualized) Total virtual net assets grew from $1,000,000 to $1,240,705.72.
I essentially matched the S&P 500.
Given the unusually large advance of the market in 2013, I am pleased with the fund’s performance. Due to the fund’s value approach, I generally expect to match or underperform in raging bull markets, while I expect to significantly outperform sideways or declining markets. Therefore, I consider the fund’s razor thin outperformance in the past 9 euphoric months as a win. (Though perhaps an insignificant win, since 9 months nowhere near long enough to pass judgment)
Additionally, the portfolio was 7%-10% cash during the year, so the actual stocks picked performed a little better than the overall performance would suggest.
We realized significant gains from sale of AAP and BBBY, as well by trimming positions in both LUK and DTV. We used those gains to add to BRK.B, IBM, MKL, ORCL, and MSFT.
The fund begins 2014 with two highly concentrated positions BRK.B and IBM (roughly 48% of portfolio combined), as well as smaller, but also important positions in ORCL, MSFT, DTV, MKL, COH, and LUK (45% of portfolio combined). The 8 companies we currently own have 3 important things in common 1) They have histories of creating significant shareholder value, 2) I believe they have a very high probability of creating more value in the future, and 3) I believe they were all purchased at attractive prices. These factors in combination should cause the fund will do quite well vs the S&P 500 over the long-term. Additionally, we held 7% of virtual assets in cash at years end.
New Buys: BRK.B, MKL
Added: IBM, ORCL, MSFT
Reduced: LUK, DTV
Sold Out: AAP, CHRW, NOV
TEEGO CAPITAL is a long term value-oriented virtual fund that seeks to deliver market-beating returns by buying a small number of very high quality businesses at fair-to-cheap prices. We believe excessive diversification is madness, and try to be as concentrated as possible on our very best ideas
So ends the 2013 performance update, thanks for reading!
In a few weeks, I’ll be posting my 2014 updated Return on Equity Achievers list.
It will be the successor to this original post: http://caps.fool.com/Blogs/a-fortune-article-from-1988-is/824762
Until then, best of luck!