The Jubak’s Picks, my 12-18 month portfolio, returned a paltry 0.7% in the first quarter of 2010.
Since today, June 30, marks the close of the second quarter of 2010, I guess you can say I’m little behind in reporting the performance of Jubak’s Picks. In fact I’m almost exactly a quarter behind on giving you the first quarter 2010 numbers. (That’s the quarter that ended on March 31, 2010 in case you can’t remember back that far.)
My apologies. I’ll try to do better with the second quarter numbers. If I’m very industrious, they might even be up tomorrow, July 1.
Anyway.
This marks the second quarter that the return on Jubak’s Picks has trailed the major indexes. In the fourth quarter Jubak’s Picks returned 3.9% compared to a return on the Dow Jones Industrial Average of 7.4%, 5.5% on the Standard and Poor’s 500 and 6.9% for the NASDAQ Composite index.
For 2009 as a whole the Jubak’s Picks portfolio was up 21.3% while the Dow Industrials were up 18.8%., the S&P 500 23.5%, and the NASDAQ Composite 43.9%
So what’s the matter?
It’s pretty simple actually.
In 2009 I never quite trusted this rally. In retrospect I was dead wrong. The rally that began in March 2009 was (or maybe that should be “is” despite the correction, an 18% drop in the S&P 500 from April 23 to the close on June 30 to be precise, that began in late April 2010) one of the great recovery rallies in market history.
And in the first quarter of 2010 I positioned the portfolio for the inevitable correction that had to hit the March 2009 rally just as corrections eventually hit all great rallies.
The key word here is “eventually.” The drop to the February 2010 lows didn’t usher in that correction. Instead stocks recovered to post new highs in April.
Turns out I was positioned in January for the correction that finally arrived in late April 2010.
Nothing like being early to put the kibosh on a portfolio’s returns.
But the quarter wasn’t just spoiled by a bad top-down call. I managed to get six individual stocks picks pretty stunningly wrong too. My biggest loser for the quarter was Maxwell Technologies (MXWL) down 31%, followed by Ormat Technologies (ORA) with a 26% loss, Ambev (ABV) with a 12% loss, HSBC (HBC) with an 11% loss, Taiwan Semiconductor Manufacturing (TSM) with an 8% loss. Statoil (STO) with a 6% loss, and Goldcorp (GG) with a 5% loss.
The quarter did see some substantial winners—just not enough of them. The biggest gain in the quarter came from Johnson Controls (JCI) up 21%. No. 2 with a 17% gain was Middleby (MIDD). Then came Thompson Creek Metals (TC) at 15%, Teva Pharmaceuticals (TEVA) at 12%, Potash of Saskatchewan (POT) at 10%, Cisco Systems (CSCO) at 9%, and Coach at 8%.
The 0.7% return for the quarter brings the total return for Jubak’s Picks since inception in May 1997 to 285%.
Here are the traditional Jubak Picks long-term performance numbers.
For the 12 months that ended on March 31, 2010 Jubak’s Picks was up 26.6%. In that period the Standard & Poor’s 500 Stock Index was up almost 50% at 49.8%.
For the three years that ended on March 31, 2007 the portfolio was down 8%. Yep, for the entire three-year period the portfolio delivered an 8% loss.
Terrible until you remember that at the end of March 2007 the S&P 500 was at 1420 in its run up to the bull market high at 1552 on October 8, 2007. It’s all downhill from there, even including the huge rally that began in March 2009. The S&P 500 finished March 2010 at 1169. That’s a 17.7% drop in the index in those three years.
The five-year return for Jubak’s Picks doesn’t look so bad at 46.1%, but then at 10 years the figures look pretty horrifying again. The 10-year return for Jubak’s Picks is just 16.4%.
That’s not 16.4% a year. That’s 16.4% for the entire period.
The explanation is much the same as with the horrible 3-year numbers. March 2000 was the top of the stock market in the great technology bull market so the performance for that period begins with a high point that the stock market indexes are still looking to reclaim.
On March 31, 2010 the S&P 500 was at 1169. The Dow Jones Industrial Average was at 10857. The NASDAQ Composite was at 2398.
On March 31, 2000 the S&P 500 was at 1499. The Dow Jones Industrial Average was at 10922. The NASDAQ Composite was at 4573.
That works out to a drop of 22% in price of the S&P 500 index during that 10-year period, a drop of 1% in the Dow Jones Industrial Average, and a drop of 48% for the NASDAQ Composite.
The 285% return on Jubak’s Picks since its May 7, 1997 inception compares to a 43% gain for the S&P 500, a 53% gain for the Dow Jones Industrials, and an 81% gain for the NASDAQ Composite during that period.
All returns for Jubak’s Picks deduct costs of commissions on each buy and sell.
Another request, please.
In addition to adding to the what of your performance reports – CAG, which I guess is something like what I call annualized ROI – I would like to see your performance reports in a tabular format, as we used to get in your regular MSN columns or even at https://jubakpicks.com/jubaks-picks-performance-3rd-quarter-up-8-4-ytd-16-7/ .
Thanks.
C.
Jim, as a long-time reader of the Hulbert Digest, I’d love to see the performance of those stocks you sold in addition to those you stuck with… alpha anyone?
Ok. I thought I had seen a few details on MSN a long time ago and I found – under “How to Get Started” that the portfolio is equally weighted. But I still don’t know what the value is to understand what Jim means when he says he is 34% in cash.
I’d like to see an explanation of how the portfolio is constructed, Are there equal dollar amounts of each stock? What is the total value of the portfolio? I’ve enjoyed the analysis and stock picks over the years.
Please Mr. Jubak, I mean no offence by my words, none of us is perfect,, least of all me.
Jubak picks good stocks, but the problem is his chart timing is terrible !
Please, no offence.
I saw mr Jubak pick USB, when it was just under the 200 day on the daily chart,, I looked at that pick like it was poison, and I was corrcet ! USB has been falling ever since he picked it. USB may well be a great stock, and I am watching it, but not till my charts tell me to buy.
Hi Jim,
If you are working from the standard
totalreturn = principle * ( 1 + CAGrate) and not an annuity with variable annual contributions, for the odd May 7 start date, you can just calculate CAG based on number of days between now and then – in excel it looks like this
cell A1 = total return in %
cell B1 = “=TODAY()-DATE(1997,5,7)”
cell C1 = (A1+1)^(1/(B1/365.25))-1
C1 is your CAG
In your case 285% total return over 4,803 days is equal to 10.8% CAG to date. at least if my math is right.
thanks for all you do…
Thank you so much for your honestly if all the companies managers can report their result like that without putting any cream on it, who know’s the market might not swarm in all those mis information.
gnomony
I wish I had the guts to do something like that. I only started really following and first investing in the Picks the beginning of mid Jan of this year with POT. But as I was reading this site as a learning tool and guide adding more into my portfolio.
But the warnings on this site and seeing Jim move out to cash I actually began to get out ASAP if I broke even or ANYTHING positive making my first sells ever based on trying to see the future rather than I need money/cash out stocks situation.
Haven’t locked in any losses for the underwater ones but it will be a long ride back in this economy to break even. But I have to admit I’ve learned more in these last 5 months about the market here than I ever suspected.
Jim-
I’ll second that thot of gnomony’s: I invest in a completely different- well sort of different- way than you, but your valuable advice and insight have made me a lot of money over the years, CAG, Total Return, or whatever. Not to mention the great reading, the wit, and the wisdom [but I did anyway.] Thanks as always.
Jim, you make more sense to me than anyone else I can find to read. Somehow, using your analysis as a primary navigational aid (but not following your conclusions), I took my IRAs to 90 percent cash in late April and stayed there. Thank you for what you do. You are more valuable than your own numbers suggest!
rickbudzy, CAG would in many ways be an easier format for me too since that’s the way that the index returns are calculated. The only calculation that gets a bit tricky is the since inception because of the odd May 7 start date. But I’ll see what I can do starting with the 2nd quarter of 2010.
yx, the year to date for the first quarter is the first quarter. When I publish second quarter numbers, I hope today, I’ll include a ytd.
Jim,
It isn’t about half empty or half full, or even being bigger than it needs to be. The important thing to remember is you have glass and keep it covered. Thank you for all the hard work!
I’d like to see a YTD too.
It would be nice to have a your own portfolio (eg $100000) visible to your subscribers so that I will always know how much of the portfolio is in stock or in cash.
Jim,
No apologies necessary. These are crazy days to be an investor.
Why do you need CAGR when Jim already compares apples to apples? It’s a pretty simple calculation to go from total to CAGR, and calculators can be a great, cheap investment.
You had the value investor curse this quarter of always being early. That 40% cash (or whatever exactly you’ve raised it to) will crush the market (losses) next quarter as long as you’re not top heavy commodities or other big losing sectors.
Congrats on continuing success. I’ll say it every quarter: When Jim has lower returns they tend to be much, much higher when risk adjusted. There’s no way to measure that value!
Jim,
Would love to see an update on what you think about FLS.
which i did haha. ouch!
i think the 285 percent return is equal to 8.39% year over year for 13 years. nothing wrong with reporting flat numbers. i for one dont care if my CAG is 11% if i just had a -18% quarter 😉
285% gain since inception is very impressive, especailly when looking at the S&P only having a 43% gain during that same period. Jim, don’t be too hard on yourself over a few short term anomalies in an overall stellar performance. I admire your honesty and your abilitites to comprehend and decipher such a wide range of information. You have tremendous analytical skills which pays off over a longer period of time. The only one I know of that claimed he never had a down period was Bernie, and we all know how that turned out. Thanks for everything you do to help the rest of us make sense out of these volatile investing times.
That 285 percent return since 1997 (13 years total) equals out to about 11 percent a year compounded, right? Rather good for this volatile time period.
I’m sensing an update to JCI in our futures considering the current stat is $39 by July 2010 :- )
rickbudzy:
Looking a gift horse in the mouth! Or is it egg in your beer you’d be wanting?
Jim:
Always appreciate your honesty and insight. However, your performance number reporting drives me crazy. It would provide so much more clarity if you would normalize your numbers to a Compound Annual Growth (CAG) rate. Include your performance CAGs for the current quarter, the YTD, the previous year, the previous 3 years, the previous 5 years, and since inception. This way I can tell whether I’m getting value out of your advice, especially since you are moving to a paid subscription service.