Yeah, but how good is he with *real* money?
I absolutely *love* CAPS - for a whole lot of reasons. One thing CAPS isn't though, by design, is a portfolio simulation game. There is no buying more on dips, allocating more money to some picks than to others, etc.. This might leave some Fools wondering, "Hey, that player's CAPS score is great, but what does that tell me about how good that player is when it comes to investing in the real world?"
I know I've wondered just how well some other CAPS players do when managing their real-life portfolios, so I'm guessing that some of you might be wondering how well I've done when managing my own real-life portfolio.
Unfortunately, I can't tell you that.
It's not that I *won't* tell you... I *can't* tell you. Truth is, I don't know exactly.
I certainly monitor my portfolio, I know that it's grown over time, I've made a few really nice picks that have made some pretty nice gains (my best individual stock pick is a triple - no 10 baggers yet, but I'm working on it!) - and I've made some mistakes too that cost me a pretty penny (or I *wish* they only cost me a penny!).
But I've never really sat down and figured out what my portfolio's overall rate of return has been, so while I believe I've beaten the overall market, I've never done the math that proves it - and if I have been beating the market, I don't know by how much. Who knows? Maybe I've been just treading water or even losing to the market and would be better off in Spyders - I doubt it, but since I've never done the math, I don't know for sure.
Why haven't I calculated my portfolio's return over time to see how well I'm doing? Seems like a good and logical thing to do, right? I'm sure that it is, and maybe someday soon I'll sit down and do it - and if/when I do, I'll let you know in a blog post how the numbers come out - good or bad.
When it comes to tracking my portfolio's overall success, though, I guess I'm of the Henry Ford school of portfolio management. Henry Ford is widely attributed as having said, "Watch the pennies, the dollars will take care of themselves."
This pretty well captures my personal view regarding tracking my portfolio... "Watch the individual companies and stocks - the overall portfolio return will take care of itself." If I buy great companies at good prices, monitor them, buy more of certain holdings when Mr. Market decides to put what I think are great companies on sale, my overall portfolio return will take care of itself. After all, my overall portfolio return is nothing more than the sum total of all of the investing decisions I've made to date - if I do well with the little things, the individual stocks, companies, and decisions, the big things, in this case my portfolio's overall return, will follow.
Watch the pennies, the dollars will take care of themselves. This approach might not work for everyone, but I think it's served this Fool pretty well so far.