2012 Returns

[eclecticvalue]

infinitee00, good job with the spreadsheet it is simple and it takes into cash which most portfolio tracking spreadsheets fail to do.

[infinitee00]

 

I imagine most people get it largely right.  That being said, I just had to correct a fellow investor to include taxes as an inflow for their IRR.

 

Can you please explain it? My returns posted above are gross returns, i.e. without taxes. I typically calculate my portfolio NAV every week and use that to calculate my portfolio returns for the year. Isn't that how most mutual funds/ hedge funds calculate their returns ( albeit every day, unlike mine which is done every week and is probably a simplified version)? I am not sure how to include taxes in my calculation though.

[racemize]

 

I imagine most people get it largely right.  That being said, I just had to correct a fellow investor to include taxes as an inflow for their IRR.

 

Can you please explain it? My returns posted above are gross returns, i.e. without taxes. I typically calculate my portfolio NAV every week and use that to calculate my portfolio returns for the year. Isn't that how most mutual funds/ hedge funds calculate their returns ( albeit every day, unlike mine which is done every week and is probably a simplified version)? I am not sure how to include taxes in my calculation though.

 

Oh, I just include the taxes paid for the investments (e.g., on cap gains/dividends, subtracting allowable losses) as an inflow on 12/31 of that year (since it is a loan until that time).  should work for XIRR, the easy TWRR, and Nav calculations.  I personally don't like dealing with NAV, so I use the approximated TWRR method.  It's almost always the same as IRR anyway.

[Charlie]

100% of my money in Berkshire  ;)

 

My returns should be larger than 16,82%, because I was investing half of my money in Berkshire, before Buffett made the repurchase announcement.

 

Today was a good day  :)

[infinitee00]

@eclecticvalue

 

Thanks. The spreadsheet was modified from a spreadsheet Jae from OSV posted on his website a few years back.

 

@racemize.

 

Yes, for some reason I prefer the NAV route, although if I had to go back and find my IRR from 2006-2007 ( when I started investing) I will probably have to follow the method you outlined.

[racemize]

@eclecticvalue

 

Thanks. The spreadsheet was modified from a spreadsheet Jae from OSV posted on his website a few years back.

 

@racemize.

 

Yes, for some reason I prefer the NAV route, although if I had to go back and find my IRR from 2006-2007 ( when I started investing) I will probably have to follow the method you outlined.

 

I think you can do the same with your NAV spreadsheet though, just have an entry on your last week with the taxes owed as an inflow.

[eclecticvalue]

Has anyone thought of creating a portfolio tracking software for the individual investor where it is better than the free options( good but flawed) and the current options (not user friendly, design not great) out there?

[txlaw]

TxLaw,

 

You rule!!!  Congratulations on a Big Year!  That is pretty awesome!

 

Brker_guy

 

Thanks to you, brker_guy, for keeping me in CLWR, as that certainly helped out. 

[txlaw]

About 94% for me in 2012. 

 

As if one ERICOPOLY weren't enough...!!  ;D

 

racemize, why have you started this thread?! To make me suffer like hell??!!  ;D ;D

 

PS

txlaw, just joking! And congratulations!!  ;)

 

giofranchi

 

Haha, thanks gio.

[woltac]

19.66% per Quicken with some cd interest that has yet to be entered.  Very good year for me.  Thank you to everyone on the board for the help.

 

BRK.B, BAC/BAC.WSA, AMX & LUK are the largest positions.  Smaller positions in MTB, MKL & Altius. Also have some money in mutual funds (Longleaf & Fidelity Selects).

[mysticdrew]

29.5% for me for 2012.  Many thanks for this board!!!

[biaggio]

Congratulations to all.

 

Makes me feel like I need some Viagra or some other male enhancer.

 

Mediocre ~+ 7%  (probably holding too much cash ~40%)

[brker_guy]

TxLaw,

 

Thanks to you, brker_guy, for keeping me in CLWR, as that certainly helped out.

 

You need not thank me.  You did all of the heavy lifting by putting your capital to work for you.  I am glad it worked out for both of us.  ;D :D

[stahleyp]

I save up quite a bit so a lot of it is commingled but I think I'm around 20% or so on investments. Not epic, but not too shabby.  :)

[wescobrk]

Through end of Nov (latest avail although up quite a bit more in Dec) up 87% for 2012 in Roth (all due to BAC) and up 22% in taxable account (up more in Dec probably close to 30%) bought BAC later in taxable after price rose

I'll never see 87% again so I'm going to enjoy it.:)

[meiroy]

 

Haven't calculated exactly, should be over 40% somewhere.  Mostly due to luck and the S&P going up itself, if it went down while my portfolio is up 40% then that would be something...

 

One thing I'm proud of is that this year I managed to trim the weeds and water the flowers even when they looked smaller than the weeds.  When the next fall comes I'll probably do fine.

 

Going over the performance threads it seems to be missing the "goal", it's like some are disappointed they have not got high yields while investing in companies like BRK or MSFT, it's not like they are expected to double every two years...  Having said teat, Kraven's post looks extremely impressive, would love to see his current team :)

 

Working full time plus with busy family at home, this couldn't have been done without you guys. 

 

 

[Shawn]

In my personal holdings 14.5%

 

I might have a mock portfolio that's very similar to my personal holdings I had on Investopedia last year if I can remember the password for the life of me I'll post it LOL.

 

The S&P 500 finished at what 16% in 2012 no ? I think it just barely beat me LOL. This is the first time the S&P 500 has ever beaten me by the way.

[Kraven]

Going over the performance threads it seems to be missing the "goal", it's like some are disappointed they have not got high yields while investing in companies like BRK or MSFT, it's not like they are expected to double every two years...  Having said teat, Kraven's post looks extremely impressive, would love to see his current team :)

 

Working full time plus with busy family at home, this couldn't have been done without you guys.

 

I assume you don't want me to discuss "teats", although I could give it the old college try.  In terms of my "team", it's just me.  No team.

 

 

[giofranchi]

+15%    >50% cash most of the year....

 

top gainers: brk, aig, bac, jef, usg, salm, crbc, osk and a long list of special situations/mergers

 

top losers: spy short (hedge), rimm, fbod

 

regards

rijk

 

Congratulations! Very solid returns, running practically no risk! I like it very much!

 

giofranchi

 

thanks gio...

 

as long as klarman/watsa/rodriguez are happy with low single digit returns just to protect their capital, i am going to be very cautious, with all the protection i build into my portfolio, i am extremely pleased to (just) beat the market.....

 

regards

rijk

 

+1

 

... only wish I could also (just) beat the market ... well, I guess, by definition not all of us can achieve that, right?  ;D

Keep on the wonderful job you are doing!

 

giofranchi

[giofranchi]

+26%

 

Dozens of positions.  No position started at larger than ~1% of portfolio.  I invest like my investing idols, Graham and Schloss.  I buy when things are very cheap and sell when they reach IV.  Cash never less than ~30%.  No leverage.

 

Kraven,

congratulations! Fantastic job!

I think very few investors on this board can claim to have studied Mr. Graham as extensively as you surely have. Therefore, let me ask you two questions:

 

1) How do you reconcile Mr. Graham's advice that “investing is most intelligent, when it is most businesslike” with the way he actually invested? I really do not know of a single businessman who holds interests in dozens of positions and who sells them as soon as they reach IV… What am I missing here? Was Mr. Graham just advising that investing is no hobby, but serious business? If so, don’t you think that wonderful phrase loses a little bit of its strength and meaning? Isn’t it just obvious that investing is serious business?

 

2) Is it true that at the end of his career Mr. Graham acknowledged he had made more money investing in Geico, than in all his other positions combined? Or is it just a myth? If it is true, how can this statement be reconciled with the way he invested throughout his whole career?

 

Don’t get me wrong! Your results speak very loudly for themselves! No doubt about it! And congratulations again! You are a much much much better investor than I am! It is just that you wrote your investing idols are Graham and Schloss, so I was curious!

 

Thank you,

 

giofranchi

 

[alwaysinvert]

You all did really well, but how many of you can now boast that your 2013 returns equal your 2012 returns? Seems I am the only one actually living by the adage of finding one-foot hurdles to step over :D

[Kraven]

+26%

 

Dozens of positions.  No position started at larger than ~1% of portfolio.  I invest like my investing idols, Graham and Schloss.  I buy when things are very cheap and sell when they reach IV.  Cash never less than ~30%.  No leverage.

 

Kraven,

congratulations! Fantastic job!

I think very few investors on this board can claim to have studied Mr. Graham as extensively as you surely have. Therefore, let me ask you two questions:

 

1) How do you reconcile Mr. Graham advice that “investing is most intelligent, when it is most businesslike” with the way he actually invested? I really do not know of a single businessman who holds interests in dozens of positions and who sells them as soon as they reach IV… What am I missing here? Was Mr. Graham just advising that investing is no hobby, but serious business? If so, don’t you think that wonderful phrase loses a little bit of its strength and meaning? Isn’t is just obvious that investing is serious business?

 

2) Is it true that at the end of his career Mr. Graham acknowledged he had made more money investing in Geico, than in all his other positions combined? Or is it just a myth? If it is true, how can this statement be reconciled with the way he invested throughout his whole career?

 

Don’t get me wrong! Your results speak very loudly for themselves! No doubt about it! And congratulations again! You are a much much much better investor than I am! It is just that you wrote your investing idols are Graham and Schloss, so I was curious!

 

Thank you,

 

giofranchi

 

Gio, thanks for the kind words and good questions.  Ha ha, I seriously doubt that I am a better investor than you or anyone on this board for that matter.  I just do my thing.

 

1) How do you reconcile Mr. Graham advice that “investing is most intelligent, when it is most businesslike” with the way he actually invested? I really do not know of a single businessman who holds interests in dozens of positions and who sells them as soon as they reach IV… What am I missing here? Was Mr. Graham just advising that investing is no hobby, but serious business? If so, don’t you think that wonderful phrase loses a little bit of its strength and meaning? Isn’t is just obvious that investing is serious business?

 

That line from Graham is one of my favorites.  With all due respect, I think you are thinking of being a "businessman" and "businesslike" in too narrow a fashion.  It would seem to me that you are equating the terms with running a business.  But it's more nuanced than that in my opinion.  I think when Graham talked about investing in a businesslike manner he was in the first instance distancing himself from how he saw most people of his day investing.  That is, they would buy something on a whim or based on a tip or what their friend or shoeshine guy said.  So for Graham, a "businessman" doesn't just jump into an endeavor without analyzing it and making a decision based on the facts.  Further, one of Graham's goals was to develop security analysis as a profession.  So in that vein he wanted an investment "scheme" to include thoughts about profit and loss and knowledge of own's results.  So "businesslike" to me in the broader sense mean being professional about investing.  Be serious about it.  Treat it in the same manner one would treat any type of work.

 

But you raise an interesting point.  I think there are many on the boards who equate "proper" investing with Buffett and Munger.  So a focused portfolio that one buys and holds until the earlier of eternity or a reason for the investment thesis changing.  That's one way to do it.  It's a damn good way if you can do it, but it never made sense to me.  I don't want to buy something that's arguably 2% below fair value today and let it compound for years.  I can't see the future in that way.  I would rather buy something at 50-60 cents on the dollar and let it revert to the mean.  Then I sell.

 

Graham also said that he buys his stocks like he buys groceries, not perfume.  That was always one of my favorite sayings from him.  I have always envisioned myself as running a grocery store or something.  My inventory is my stocks.  In one aisle you may have the high end filets and lobsters, but in another aisle is the gum and candy and paper plates.  To me it's all good.  What do I care what someone buys?  Come into my store and buy a pack of gum.  Sure, I might just make 2 cents on that, but gum sells all day long and it doesn't take a lot of time to determine your gum inventory.  You buy it, you stick it on the shelf and someone will buy it from you.  It doesn't take long to track it. 

 

So for me, businesslike is treating my investing as a business.  Our difference, if we actually even have one, is that you are equating each stock you own as if you ran the business while I see it as inventory.  While I do fervently believe that each stock I own is an ownership in a business, it is also just a piece of paper.  It's both, Graham says that as well.  We have the best of both worlds.  So I buy thinking of the business, but then put it on the shelf.  Everything is for sale!  I run things professionally and can't imagine running it in any more businesslike manner.

 

2) Is it true that at the end of his career Mr. Graham acknowledged he had made more money investing in Geico, than in all his other positions combined? Or is it just a myth? If it is true, how can this statement be reconciled with the way he invested throughout his whole career?

 

I don't recall whether Graham acknowledged it or not, or whether others said that about him after he died.  I don't think it's actually true, although someone can correct me if that's wrong.  My recollection is that while on paper he did make a ton of money on GEICO, I don't believe he actually sold the stock or all of it anyway and was holding at the time of his death when GEICO was on it's "last legs" and just a buck or 2 a share. 

 

Even if we assume for sake of argument that he made most of his money on GEICO (which I don't believe he did as noted above), it wouldn't change my views at all.  One, Graham made lots of money by investing in his net nets and so forth.  He was a millionaire many times over long before GEICO did anything.  Remember that he retired to California in the last 1950s.  After that point he taught and dabbled, but didn't really do much.  So any profits that came from GEICO were late in life.  And whatever he got out of it was really a "mistake". I don't mean a mistake in the sense that he didn't intend to buy it, but he didn't really care about investing all that much after he retired.  He held the position but I don't think it was because of the modern "compounding machine" reasons.  I think it was in his portfolio, he retired, he kind of forgot about it.

 

So for me, what Graham means to investing has nothing to do with his GEICO investment.  His brilliance was out there for the world to see long before GEICO did something or not in his portfolio.

 

Hope I answered your questions.

[jeffmori7]

Horrible year for me, +3%..thanks FTP...

[giofranchi]

Gio, thanks for the kind words and good questions.  Ha ha, I seriously doubt that I am a better investor than you or anyone on this board for that matter.  I just do my thing.

 

1) How do you reconcile Mr. Graham advice that “investing is most intelligent, when it is most businesslike” with the way he actually invested? I really do not know of a single businessman who holds interests in dozens of positions and who sells them as soon as they reach IV… What am I missing here? Was Mr. Graham just advising that investing is no hobby, but serious business? If so, don’t you think that wonderful phrase loses a little bit of its strength and meaning? Isn’t is just obvious that investing is serious business?

 

That line from Graham is one of my favorites.  With all due respect, I think you are thinking of being a "businessman" and "businesslike" in too narrow a fashion.  It would seem to me that you are equating the terms with running a business.  But it's more nuanced than that in my opinion.  I think when Graham talked about investing in a businesslike manner he was in the first instance distancing himself from how he saw most people of his day investing.  That is, they would buy something on a whim or based on a tip or what their friend or shoeshine guy said.  So for Graham, a "businessman" doesn't just jump into an endeavor without analyzing it and making a decision based on the facts.  Further, one of Graham's goals was to develop security analysis as a profession.  So in that vein he wanted an investment "scheme" to include thoughts about profit and loss and knowledge of own's results.  So "businesslike" to me in the broader sense mean being professional about investing.  Be serious about it.  Treat it in the same manner one would treat any type of work.

 

But you raise an interesting point.  I think there are many on the boards who equate "proper" investing with Buffett and Munger.  So a focused portfolio that one buys and holds until the earlier of eternity or a reason for the investment thesis changing.  That's one way to do it.  It's a damn good way if you can do it, but it never made sense to me.  I don't want to buy something that's arguably 2% below fair value today and let it compound for years.  I can't see the future in that way.  I would rather buy something at 50-60 cents on the dollar and let it revert to the mean.  Then I sell.

 

Graham also said that he buys his stocks like he buys groceries, not perfume.  That was always one of my favorite sayings from him.  I have always envisioned myself as running a grocery store or something.  My inventory is my stocks.  In one aisle you may have the high end filets and lobsters, but in another aisle is the gum and candy and paper plates.  To me it's all good.  What do I care what someone buys?  Come into my store and buy a pack of gum.  Sure, I might just make 2 cents on that, but gum sells all day long and it doesn't take a lot of time to determine your gum inventory.  You buy it, you stick it on the shelf and someone will buy it from you.  It doesn't take long to track it. 

 

So for me, businesslike is treating my investing as a business.  Our difference, if we actually even have one, is that you are equating each stock you own as if you ran the business while I see it as inventory.  While I do fervently believe that each stock I own is an ownership in a business, it is also just a piece of paper.  It's both, Graham says that as well.  We have the best of both worlds.  So I buy thinking of the business, but then put it on the shelf.  Everything is for sale!  I run things professionally and can't imagine running it in any more businesslike manner.

 

2) Is it true that at the end of his career Mr. Graham acknowledged he had made more money investing in Geico, than in all his other positions combined? Or is it just a myth? If it is true, how can this statement be reconciled with the way he invested throughout his whole career?

 

I don't recall whether Graham acknowledged it or not, or whether others said that about him after he died.  I don't think it's actually true, although someone can correct me if that's wrong.  My recollection is that while on paper he did make a ton of money on GEICO, I don't believe he actually sold the stock or all of it anyway and was holding at the time of his death when GEICO was on it's "last legs" and just a buck or 2 a share. 

 

Even if we assume for sake of argument that he made most of his money on GEICO (which I don't believe he did as noted above), it wouldn't change my views at all.  One, Graham made lots of money by investing in his net nets and so forth.  He was a millionaire many times over long before GEICO did anything.  Remember that he retired to California in the last 1950s.  After that point he taught and dabbled, but didn't really do much.  So any profits that came from GEICO were late in life.  And whatever he got out of it was really a "mistake". I don't mean a mistake in the sense that he didn't intend to buy it, but he didn't really care about investing all that much after he retired.  He held the position but I don't think it was because of the modern "compounding machine" reasons.  I think it was in his portfolio, he retired, he kind of forgot about it.

 

So for me, what Graham means to investing has nothing to do with his GEICO investment.  His brilliance was out there for the world to see long before GEICO did something or not in his portfolio.

 

Hope I answered your questions.

 

Kraven,

as I suspected, you are very knowledgeable and therefore very successful!  :)

Yours are extremely thoughtful answers about Mr. Graham’s way of investing and thinking about investing. He truly was the “Einstein of Money”!

Thank you very much,

 

giofranchi

[racemize]

A few observations on this post that I found interesting was that after 135 votes the poll results show a classic normal distribution curve. Although, I don't have access to the numbers and the granularity seems coarse, I suspect that the median returns would be very close to the returns of the S&P500.

 

so, I was thinking about this some more (it was bothering me as I expected general outperformance from the board)--the graph is deceiving.  It looks like a normal distribution, but the y-axis (in this case) is not linear, it is <0, 0-10 (gap of 10), 10-25 (gap of 15), 25-50 (gap of 25), 50+ (gap of 25), so I bet the underlying data are not centered around the S&P TR, but a bit above it.