he's already said. All his portfolios are designed to be held one year. not longer, not shorter. I'm too lazy to look up the exact quote. I suspect we won't being seeing too much of Matthew any more.

Just a quick update as of late today:

The VTI index fund portfolio is down about 0.1% from the start (basically just the commission has been lost)

Matthew's portfolio is down about 0.4% (not including the $100 he would have charged you for it)

Some of his picks have done quite well and others have done very poorly. But we still have about 50 weeks to go.

DH,

I'm trying to follow along here but I don't have experience with spreadsheet calculations; I seem to have come up with some different numbers than yours. What am I doing wrong?

https://docs.google.com/spreadsheet/pub ... utput=html

I'll check my numbers. On the surface the only difference I see is that I used 11/8 closing prices which results in a few differences in the number of shares bought.

This is one reason why I was insistent that we nail down the details in advance.

As someone who read the Intelligent Investor, Security Analysis, and another Buffett book on value investing, I can't even remember now, I do recall a few things that you don't seem to even be following that are basic tenants of value investing.

First off your time frame is extremely short for a value investor. Even Buffett uses 3-5 year time frames. You said you hold for 1 year?

Also, most value investors do an extremely heavy amount of research on their holdings, are you really going to be able to research all of those positions on a consistent basis? Jim Cramer, who isn't even a value investing guy, recommends one hour per position per week. You might as well quit your job.

Third is that value investing is just dead. Computerized trading systems have killed it and the highest correlation rates among assets ever has also helped destroy it. I am not saying Buffett is dead, hell he gets to meet with board members and get his firm very nice arrangements but you are not that smart.

The bottom line is this dude, next time the market crashes everything you own in that portfolio will crash also. Then I pose the next question to you, do you stick with your value investing tenants and just keep holding for 5 years? Thats like building out a value portfolio in 2000 or 2008, it doesn't matter, the timing is what is the most important. If you have done well since 2008 its because the timing and uptrend of the market has been higher. Thats all that really matters...

My blog here: http://financeinlife.blogspot.com/2012/ ... -time.html

I disagree. I don't believe value investing is dead. You need to do your homework & have the testicular fortitude to act one way or the other on your research but to say that value investing was killed off by a computer is short sighted.


The old saying 'the one who has the gold makes the rule' applies in his situation.

Update on the portfolios

The 1-month update

(fees excluded)

My portfolio is currently up 2.8% (rounded down to the nearest tenth of a percent).

VTI is up 2% (rounded down to the nearest tenth of a percent).

And you were down more than VTI just a few days ago. Something tells me we are only going to hear from you on the days you portfolio is up. That's kind of rude and immature don't you think? How about participating in the boards constructively on a regular basis.

And "not including fees" is kind of like cheating.

Your numbers seem to be way off. Please provide a breakdown and show your math.

You seem to be excluding fees (which you said), cash, and you must be using incorrect starting prices. Are you still using impossible opening prices?

Hey, I wanted to use the previous day's closing prices. Someone else wanted to use the next day's prices. I put the portfolios together before the day started trading. If you can't provide a concrete way of choosing a price, then don't complain. It started at the day's opening price because that was the very next price the stock traded at. Otherwise, you're just stuck complaining about any prices I use just because you can.

If I pick a stock the previous day, am I going to wait until the close of the next day to place the order? No, I am going to do it at the start of the day. Therefore, the start of that day's prices is MUCH more realistic than taking that the following day's closing prices would bring. Considering how much a stock moves in a day, you should accept this. If you didn't care about being as realistic as possible, the closing prices used on the 7th should have been used instead. Either way, I would not be using the close of the 8th's prices.

Ticker 2012 11 08 Opening Price Stocks bought Value 2012 12 08 Price Value
XRX 6.37 241 1535.17 $7.09 1708.69
GPK 5.93 259 1535.87 $6.20 1605.8
SUP 17.31 88 1523.28 $18.80 1654.4
BAS 9.5 162 1539 $11.17 1809.54
CLD 19.65 78 1532.7 $19.65 1532.7
AIZ 36.69 42 1540.98 $34.81 1462.02
BRP 17.2 89 1530.8 $16.27 1448.03
PL 25.75 59 1519.25 $26.79 1580.61
PRU 54.35 28 1521.8 $52.47 1469.16
RGA 51.89 29 1504.81 $51.99 1507.71
SYA 11.45 134 1534.3 $12.53 1679.02
HUM 70.17 22 1543.74 $66.65 1466.3
WLP 57.85 26 1504.1 $57.78 1502.28
19865.8 20426.26 2.82%


2012 11 08 # Value 2012 12 08 Value % change
VTI 71.6 279 19976.4 73.04 20378.16 2.01%

To all who complain that I don't post more, I am only obligated to post once a month. It's what I agreed to do.



All material studied that shows actual detailed, statistical results on value investing that I have gone over is for holding periods of 1 year. Therefore, I cannot recommend to someone a portfolio for 3-5 years. There's a lot of stuff out there that says stuff about value investing without backing up what they are saying in a meaningful way. Buffet, no doubt, goes beyond merely value investing in picking his stocks. There is no way that he made that fortune without taking some extra steps there. And aside from that, Buffett recommends that people invest in index funds while he himself invests a ton in specific stocks and owns businesses outright. Of course, there are reasons that he could be making the recommendation of using index funds while he does something else. Anyone without a strategy that beats the market would be better off using index funds after all and most strategies do not beat the market.

Matthew. Have you ever successfully bought a stock for real at the open price? If you have actually done any real trading you would understand that is a fantasy. But in the interest of giving you the benefit of the doubt, I'll use opening prices on 11/8 for the starting value.

I will also note that there was no stock trading on Saturday December 8. Does that mean in your update you have now decided to use closing prices from 12/7? If so then you should properly document that, don't you think? And why the switch?

You are up 2.6% before taxes. The index portfolio is up 2.0%. If we include taxes at 15% on dividends (assuming all are qualified) you are up about 2.5%. The index has not paid dividends since the tracking began so it is unaffected by taxes.

I don't know where you are getting 2.8% unless you are ignoring commissions and dividends. In the future your updates should include both of those so we can get a true picture of the performance.

Updates:

Portfolio currently up 8.09%
VTI up 5.35%

Expenses and dividends have been included. (Current above returns based upon 20k initial investment, so returns are based on dividing the result by 20k)

Portfolio:
Stock Value: 21492.16
Dividends: 121.66475(rounded)(after taxes)
Leftover initial cash: 4.85

Result: 21618.67475

VTI

Value: 20927.79
Dividends (taxed) : 129.24675
Leftover initial cash : 13.65

Result: 21070.68675

Here's the February 8th update.

Value of portfolio : 23193.78
After-taxed dividends : 121.66475
Money left over initially : 4.85

Total worth : 23320.29475
Gain/Loss : +16.6%

VTI

Value : 21868.02
After-taxed dividends : 129.24675
Money left over initially : 13.65

Total Worth : 22010.91675
Gain/Loss : +10.05%