Portfolio Up 37.7% YTD

THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET

  • Enlightened-American Portfolio: +37.7% YTD (my actual IRR, including cash balance)
  • DJIA: +17.9%
  • Nasdaq: +36.0%
  • S&P 500: +21.3%
  • DJ Wilshire 5000: +16.9%
  • Russell 2000 (smallcap): +12.7%

Our portfolio lagged the broader market during November but continues to outpace the major indices for the year. In any case, I implore members to take caution against focusing on monthly or even a year’s results — investing is a marathon, not a sprint. With a 39% cash position, our 38% return on the year is somewhat insulated if the market should turn down at year-end while positioning us well to take advantage of any opportunities. However, if markets persist in their upward climb, we will eventually fall behind due to holding too much cash. Either scenario is acceptable.

November was a slow month for the portfolio, with only one new position added. Join EA-Premium to get access to all my latest portfolio moves and research.

As for the market outlook, I tire of imitating a broken record (markets expensive, risk high, ignore macro view, focus on fundamentals, etc.), so I direct readers to John Hussman’s latest missive by way of The Big Picture. Hussman runs an absolute return fund which has performed as designed, delivering relatively small positive returns through good and bad years, including the crash of 2008. He was among those sounding the credit crisis alarm well before the severity of it was clear even to the schmucks on CNBC.

It is hard to see risk when the sun is shining and all seems well, but that is precisely why it is so dangerous — investors are lured into a false sense of security. With so many indicators suggesting the market is overvalued, stocks will probably move up in the short-term (the market likes to thumb its nose at those who seek to predict it), but eventually economic fundamentals should exert themselves.

2 Responses to “Portfolio Up 37.7% YTD”

  1. Jay @marketfolly Says:

    Hey great stuff congrats on the success. Do you have historical track record publicly available? How did it fare last year?

    Also was curious if it’s long/short or just long-only? Clearly I’ll need to read up more on this hah but congrats again always good to see solid stockpicking!

    Jay
    @marketfolly

  2. Davy Bui Says:

    Hi Jay,

    I have been posting my portfolio publicly ever since I started the site which was late 2006. Last year’s IRR was -25%, which is 10 points lower than what’s shown on the spreadsheet due to the way I accounted for options, basically not marking them until the contract closed out. Earlier this year, a third party audited all my brokerages’ statements to verify returns and calculated 2008 to be ~ -25%, not the -15% as shown. I’ve since changed my accounting to prevent such a divergence. Nevertheless, -25% is better than the -37% or whatever the market posted last year and the massive drops in my naked put positions are what’s enabled the outperformance this year.

    I’m long-only. Just can’t stomach the asymmetric risk profile of shorting. I do pay some attention to asset class allocation but without access to superior vehicles, this is difficult for retail investors.

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