Your returns in 2013

[BG2008]

BG2008 - can you provide some more details on your strategy/best and worst of 2013 and holdings?  Are you concentrated in less than 10 positions, etc.

 

MVP444300 - do your returns include cash or not and can you provide some more details on your strategy/best and worst of 2013 and holdings?  Are you concentrated in less than 10 positions, etc.  Did you suffer much of a decline in 2008?

 

Great returns BTW.

 

Packer

 

Packer,

 

This is purely for my IRA account  - Less than 10 names, portfolio level returns are based on fund assets as of Dec 31, 2012

 

Special Situation #1 - 90% gain on portfolio level, 250% gain on the name from inception, currently ~60% of my portfolio, I backed up the truck on this one.  Return is totally market agnostic from the point of entry with a ton of margin of safety.   

Special Situation #2 - ~8% gain on portfolio level, 80% gain from inception on the name

Special Situation # 3 - ~13% down on portfolio level, 30% down on the investment - value has stayed the same, price is down, one of the higher upside ideas going forward

Special Situation # 4 - ~6% down on portfolio level     

Special Situation #5 - ~6% gain on portfolio level

Awilco Drilling - ~ 6-7% gain for the portfolio, bought in the $14s and sold in the $21 and $24 (to make room for other positions) and received 2 dividends

ISLE - ~ 4% gain for the portfolio

Digirad - ~4% gain for the portfolio

Puts/Calls that expired worthless and other misc gains/losses

 

I've experimented within my IRA in the last few years.  I've come to the conclusion that I will concentrate on my best ideas.  I am willing to allocate up to 50% toward market neutral workouts and up to 1/3 toward my best "general undervalued" ideas.   

 

I am obsessed with market neutral workouts and hedging against a 2008/2009 style market meltdown.  All throughout 2013, half of my IRA account is in workouts that will pay a cash distribution within 12 months.  Sometimes, they take a bit longer.  So, if we get into another 2008/2009 situation, the account value may go down temporarily, but the events will pay out cash when they occur generating market neutral returns and providing cash when I can best put it to work.   

 

Hope others share more details on their investment styles.  These are great.  I'm noticing that there are some SuperInvestors per Warren Buffet's article here on this forum.  I would love to learn how people generated 20+% CAGR over 10 years.  I would love to hear strategies, any large gains/losses that altered the returns over time, anything that people would do differently if they were to start today. 

 

In Buffet's Superinvestors of Graham and Doddsville http://www4.gsb.columbia.edu/null?&exclusive=filemgr.download&file_id=522  The 10-20 year returns at the partnership level is less then 40%.  Some of the superinvestors on this forum generate returns that are actually higher than that.  I'm wondering what drives that?  Higher concentration?  Leverage? Smaller AUM?  Would love feedback on this topic. 

 

 

 

 

 

[kirkomi]

21%.

 

I had more than 30% cash at all times.

 

I was pretty lousy in the previous two years too. Still learning the ropes.

[gokou3]

73% on my biggest account.  By far my best performance out of the 9 years that I have been investing.

 

Biggest winners are AIG leaps and BAC leaps (still holding both), so obviously my return wouldn't have been possible without the knowledge generously dispensed by the people on this board.

 

Biggest loser is LTS.

 

In terms of style, I seem to have done well on the unloved mega caps.  Other previous winners in this category include MSFT and VOD leap.

 

Thanks again for the board and happy investing in 2014.

 

 

[giofranchi]

My firm’s equity is up 23% this year. And I am very happy! ;D ;D My goal is to compound it at 15% yearly for the next 45 years. I will then have created a billion dollar company from scratch. You might think it is not such a worthwhile endeavour, but it is all I really look for from a professional point of view. So, 8 percentage points more than my annual goal cannot make me but happy!

 

Although, my asset allocation really makes me look like a fool… 50% in between FFH and LRE, which practically went nowhere in 2013. Another 28% in cash + a basket of shorts, which cost me money in 2013. I also lost 4.5 percentage points due to USD/EUR exchange rate…

 

Difficult to imagine how I could have been more “wrong” than in 2013… And I am up 23%. I repeat, I am very happy. The less I feel the net worth of my firm depends on what the market does, the happier I am.

 

A prosperous 2014 to everyone! :)

 

Gio

 

[SharperDingaan]

Up 67% in the main account, & better than we expected, .... but a challenging year.

 

The negatives were a big loss on Poseidon Concepts (systemic fraud) early in the year, & allowing adverse wealth effects to influence our PD hedging. The positives were multiple correct choices under varying conditions (EFN, NBG, BB, ALS, PD, SAN), & a successful stress testing of our softer PM skills.

 

Barring the odd black swan; we are consistently getting better at risk management YOY, but our returns are now coming from patient managing of macro & commodity cycles - & they seem to be getting easier to assess & obtain. It would seem that there is a tipping point that is not in the literature.

 

Hopefully it continues, & others will get to experience something similar in 2014.

 

Good luck.

 

SD

 

 

 

 

 

 

[stahleyp]

So I am up 26.8% this year. Happy, but humbled to read the 50%+ returns on this board. I held a large cash position throughout this year, and didn't invest more in my best ideas. My new year's resolution is to change that.

 

Palantir, I know we've talked about this a bit in the past regarding your bullishness, but I'm a bit confused but why do you seem to be so bullish in some of the other threads if you have had such a large cash position? Sure the economy seems like it's improving but prices have gone up quite a bit, too. We're also 5 years into a bull market (I'll go on record here to say that I don't think we're in a new secular bull...though I know the market may prove me wrong, haha). Statistically speaking, it's getting long in the tooth. It might be different this time, but who knows.

 

As for myself, I'm still almost fully invested, but my cash cushion is a bit larger than normal based on selling some appreciated securities and having yet to invest them.

 

Fair point. I am investing a small amount of money and I only buy a stock when I'm really psychologically comfortable with it, and I like to have dry powder, so that results in me holding 30-40% cash.

 

I'm curious to know what you mean when you say that the rally is reaching its expiry date, so to speak. Does that mean you broadly expect poor returns over the next few years? Or do you simply mean that there could be a correction this year? If the latter, I agree with you, there could well be a -10% decline in the markets, but it could still be a long term bull. Who knows, though, that is why we have bottom up value investing, to prevent worrying about the level of the market, and focus on finding undervalued securities!

 

I'm not really sure what could happen. I think the more common consensus is that we'll have the correction. By reading what Klarman writes and some others, we could be in for a really tough ride.  A couple years ago, Burry seemed really pessimistic, based on a speech he gave. He's back with a fund betting against (or for) who knows what now. I'm of the opinion that when the Fed goes through experiments that it may (or may not) work out as well as expected. But, then again, what do I know.

 

 

[Kraven]

38.5% with 33.5% cash. Never less than 25% cash. Approximately 100 positions. No leverage.

 

Like Oddball I am impressed with the results of many here. All I can do though is what is comfortable for me. Know thyself is the key to being successful in this game. As much as I want to be Gordon Gekko, I will always be Bud Fox.

I personally find this result (and Nate's as well) just as impressive as the higher gains with the more concentrated portfolio's. With more positions there is a higher probability that skill instead of luck is the driving force behind the returns, and you have a lot less risk as well (especially with the cash position).

 

Kraven and I have discussed "know thyself " on and offline.  Whenever I have tried the Graham/Schloss style of of investing I have blown up or at least lagged badly - I have a knack for backing up the truck for loads of crap.  So For now I stick to the style that works for me which is similar to Eric's.  Do you call it luck that I have held BAc for nearly 4 years, AIG for two, Seaspan for 5.  Maybe its luck or maybe its a bit of an intuitive understanding of market psychology.  I also tend to load up the winners.  IMO, there is a lot of soft skill involved in risk managing a concentrated portfolio. 

 

I am certainly adaptable and ready to try a different path, should that make sense.  At this point it doesn't.  I have had one down year in 10, and it was 2011, not 08, or 09.  And it was due to style drift.

 

Good points.  It's important for everyone to do what works for them.  Graham recognizes this when he says (paraphrasing) if you can invest by forecasting the future or utilizing technical analysis, then that's what you should do.  He just knows it doesn't work for him.  So you have a strategy that you have been successful with.  It's smart to continue doing what works.

 

I think the problem many have is that they don't yet know who they are (in an investing context).  They are constantly trying on different hats and seeing what might look and feel good.  This is what many investors are doing -

(retro Brady Bunch clip where Peter is trying on different personalities).

[oddballstocks]

38.5% with 33.5% cash. Never less than 25% cash. Approximately 100 positions. No leverage.

 

Like Oddball I am impressed with the results of many here. All I can do though is what is comfortable for me. Know thyself is the key to being successful in this game. As much as I want to be Gordon Gekko, I will always be Bud Fox.

I personally find this result (and Nate's as well) just as impressive as the higher gains with the more concentrated portfolio's. With more positions there is a higher probability that skill instead of luck is the driving force behind the returns, and you have a lot less risk as well (especially with the cash position).

 

Kraven and I have discussed "know thyself " on and offline.  Whenever I have tried the Graham/Schloss style of of investing I have blown up or at least lagged badly - I have a knack for backing up the truck for loads of crap.  So For now I stick to the style that works for me which is similar to Eric's.  Do you call it luck that I have held BAc for nearly 4 years, AIG for two, Seaspan for 5.  Maybe its luck or maybe its a bit of an intuitive understanding of market psychology.  I also tend to load up the winners.  IMO, there is a lot of soft skill involved in risk managing a concentrated portfolio. 

 

I am certainly adaptable and ready to try a different path, should that make sense.  At this point it doesn't.  I have had one down year in 10, and it was 2011, not 08, or 09.  And it was due to style drift.

 

Yes, this along with what LC said are very important, one of the main reasons I'm skeptical of coat-tailing major investors.  Earlier in the thread I was looking at someone's five stock portfolio and played a little mind game with myself.  I thought what would happen if I sold everything and purchased those five stocks?  I concluded I'd most likely do worse than the poster, I would have no idea when to sell unless they gave me a call or something.

 

Some people do blow up buying the Graham companies, there are surely enough potential land mines.  This is where I incorporate the Buffett thinking, if something doesn't look like a home run to me (which for myself is a 50-100% potential gain) with a safe balance sheet I move along.  If I wanted to lower my standards there are probably about a dozen or more companies I would have purchased this year, instead I passed, too much debt, too many potential problems in a bad market, yet a few were 30-50% of BV and 2x earnings.

 

Know thyself and don't swing at every pitch are the two maxims I'd say are required to be successful. 

[rkbabang]

My firm’s equity is up 23% this year. And I am very happy! ;D ;D My goal is to compound it at 15% yearly for the next 45 years. I will then have created a billion dollar company out of scratch.

 

Why shooting so low?  You should aim impossibly high so that even if you miss by a mile you still do great.  So I'm setting a goal to make billions by compounding at 200% yearly for only 7 years.  See, that way, even if I only make 1/8th of my goal every year that is still 25% CAGR, if you make 1/8th of your goal you'll barely beat inflation, thus you have to come much closer.

[giofranchi]

Why shooting so low? 

 

Well, I guess it is just plain common sense. Warren Buffett has a track record of 19.7% compounded annual for the last 47 years. If you also consider the 10 years of his partnership, when he compounded at 31.6% annual, his track record might be closer to 25% compounded annual, more or less. And if he achieved 25% annual on average, I will be more than pleased to compound at 15%! :)

 

Gio

 

[BG2008]

My firm’s equity is up 23% this year. And I am very happy! ;D ;D My goal is to compound it at 15% yearly for the next 45 years. I will then have created a billion dollar company out of scratch.

 

Why shooting so low?  You should aim impossibly high so that even if you miss by a mile you still do great.  So I'm setting a goal to make billions by compounding at 200% yearly for only 7 years.  See, that way, even if I only make 1/8th of my goal every year that is still 25% CAGR, if you make 1/8th of your goal you'll barely beat inflation, thus you have to come much closer.

 

I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire.  It's akin to Munger's "Man with a hammer" approach.  If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself. 

[Cardboard]

Up 41.3% and deeply disappointed: no progress for about 6 months despite a nice surge peaking in October that has all been reversed and more. Tough to see the index going up everyday while you are doing nothing.

 

Very heavy into oil & gas going into 2014. 

 

Cardboard

[giofranchi]

I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire.  It's akin to Munger's "Man with a hammer" approach.  If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself.

 

Yes! Of course! But I think a goal helps you to keep things in perspective, and I find that to know what you are trying to build is very useful.

By the way, I started my company with 25.000,00 Euros in capital at the end of 2004. Today its equity is worth 1.672.000,00 Euros… You calculate the compound rate! ;D ;D ;D

 

Gio

 

[rkbabang]

My firm’s equity is up 23% this year. And I am very happy! ;D ;D My goal is to compound it at 15% yearly for the next 45 years. I will then have created a billion dollar company out of scratch.

 

Why shooting so low?  You should aim impossibly high so that even if you miss by a mile you still do great.  So I'm setting a goal to make billions by compounding at 200% yearly for only 7 years.  See, that way, even if I only make 1/8th of my goal every year that is still 25% CAGR, if you make 1/8th of your goal you'll barely beat inflation, thus you have to come much closer.

 

I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire.  It's akin to Munger's "Man with a hammer" approach.  If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself. 

 

I'd agree with that, I probably should have put a smiley on my post, but I think that might be against Kraven's rules for 2014. lol.

I don't really have a goal except to earn as much of a return as I can.

 

[ERICOPOLY]

I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire.  It's akin to Munger's "Man with a hammer" approach.  If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself.

 

Yes! Of course! But I think a goal helps you to keep things in perspective, and I find that to know what you are trying to build is very useful.

By the way, I started my company with 25.000,00 Euros in capital at the end of 2004. Today its equity is worth 1.672.000,00 Euros… You calculate the compound rate! ;D ;D ;D

 

Gio

 

A bit under 60% annually compounded.

 

This includes your own savings though I presume (earnings you chose to retain rather than paying out to yourself).

 

I used to be able to compound by 100% in my 401k just by saving $12,000 so the balance went from $12,000 to $24,000.

 

Is that partially the effect here?  Still impressive though.

[tombgrt]

About 70%. Had a lousy last quarter but can't complain. 2014 should be much harder...

 

I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire.  It's akin to Munger's "Man with a hammer" approach.  If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself.

 

Yes! Of course! But I think a goal helps you to keep things in perspective, and I find that to know what you are trying to build is very useful.

By the way, I started my company with 25.000,00 Euros in capital at the end of 2004. Today its equity is worth 1.672.000,00 Euros… You calculate the compound rate! ;D ;D ;D

 

Gio

 

 

Well obviously comparing that CAGR wouldn't be really fair given that you invested time in building the company that had it's value (and much above that €25.000) over the years. What did you do with your personal earnings? But aside from all that... it is a very impressive track record and evidence that hard work does pay off, congratz!

 

 

Also nice results given your portfolio Gio but I would be wary about being happy with certain results when the market has a 30%+ bull run. Say that LT market returns are 8%, then maybe you should divide your returns by a certain factor as well to compensate for the increased market risk. Or do you think you are more than properly hedged against such outcomes?

 

[giofranchi]

A bit under 60% annually compounded.

 

This includes your own savings though I presume (earnings you chose to retain rather than paying out to yourself).

 

Yes! Of course! Never pretended to be such a good investor, and I think that probably I will never be! ;)

 

Gio

 

 

 

[ERICOPOLY]

A bit under 60% annually compounded.

 

This includes your own savings though I presume (earnings you chose to retain rather than paying out to yourself).

 

Yes! Of course! Never pretended to be such a good investor, and I think that probably I will never be! ;)

 

Gio

 

Well, that makes two of us.  I continually assert that I'm just an average retail investor who copies better investors. 

[giofranchi]

Also nice results given your portfolio Gio but I would be wary about being happy with certain results when the market has a 30%+ bull run. Say that LT market returns are 8%, then maybe you should divide your returns by a certain factor as well to compensate for the increased market risk. Or do you think you are more than properly hedged against such outcomes?

 

Well tom,

The fact is I believe I will do much better, when the market happens to experience a not so bullish year! …If that will ever again come to pass…  ???

 

Gio

 

[txlaw]

After the surge at the EOY, my returns for 2013 in my regular account were 81% (pre-tax, of course). 

 

As with last year, I feel very good about the IV of my portfolio.  Loving the Fiat deal and am hoping that the market further re-asseses my energy companies.  I continue to hold my financial companies for the long term and have big hopes for some of my telecom holdings.

[rkbabang]

A bit under 60% annually compounded.

 

This includes your own savings though I presume (earnings you chose to retain rather than paying out to yourself).

 

Yes! Of course! Never pretended to be such a good investor, and I think that probably I will never be! ;)

 

Gio

 

Well, that makes two of us.  I continually assert that I'm just an average retail investor who copies better investors. 

 

Don't sell yourselves short.  I think you are both excellent investors, way above average, and way better than I.  I've seen people say that they copy other investors and don't have original ideas. What is an original idea anyway?  An idea where you are the first one to invest in the company?  Any public company has had investors prior to you, so an original idea is impossible.  It doesn't matter where you found the idea, only that you understood it and put your money into it and earned the return.

 

[wknecht]

Somewhat disappointed with a little over 26% for the year here. FFH and cash (combined to 40% throughout) dragged.

[Kraven]

My firm’s equity is up 23% this year. And I am very happy! ;D ;D My goal is to compound it at 15% yearly for the next 45 years. I will then have created a billion dollar company out of scratch.

 

Why shooting so low?  You should aim impossibly high so that even if you miss by a mile you still do great.  So I'm setting a goal to make billions by compounding at 200% yearly for only 7 years.  See, that way, even if I only make 1/8th of my goal every year that is still 25% CAGR, if you make 1/8th of your goal you'll barely beat inflation, thus you have to come much closer.

 

I think aiming to compound at a certain rate could be problematic and lead to entering into investments that backfire.  It's akin to Munger's "Man with a hammer" approach.  If you know what you're good at and what you're psychologically suit for, then you concentrate on your best ideas and the returns kind of takes care of itself. 

 

I'd agree with that, I probably should have put a smiley on my post, but I think that might be against Kraven's rules for 2014. lol.

I don't really have a goal except to earn as much of a return as I can.

 

Smileys, winks and other emoticons are ok so long as they are used sparingly.  Think of it like the 20 punches.  Imagine you can only use 20 emoticons in your entire life.  If so you would be very careful when it was used. An emoticon combined with an lol should be counted as 3 punches (I originally was going to make it 5, but thought that might be too draconian).

[goldfinger]

Only 25.96% this year, too much cash for too long. My mistake...

[ASTA]

lol omg Kraven :o u are crazy ??? >:(  :'(