Jubak Picks Portfolio Performance 1997-2014
Buy and hold? Not really.
Not by a long shot.
So what is the stock-picking style of The Jubak Picks portfolio?
Click to expand...
I try to go with the market’s momentum when the trend is strong and the risk isn’t too high, and I go against the herd when the bulls have turned piggy and the bears have lost all perspective. What are the results of this moderately active—the holding period is 12 to 18 months—all-stock portfolio since inception in May 1997? A total return of 334% as of December 31, 2012. That compares to a total return on the S&P 500 stock index of 125% during the same period.
Jubak Top 50 Portfolio Performance for 2016
This long-term, buy-and-holdish portfolio was originally based on my 2008 book The Jubak Picks.
Trends that are strong enough, global enough, and long-lasting enough to surpass stock market averages.
Click to expand...
In The Jubak Picks I identified ten trends that were strong enough, global enough, and long-lasting enough to give anyone who invested in them a good chance of beating the stock market averages.
To mark the publication of my new book on volatility, Juggling with Knives, and to bring the existing long-term picks portfolio into line with what I learned in writing that book and my best new ideas on how to invest for the long-term in a period of high volatility, I’m completely overhauling the existing Top 50 Picks portfolio.
You can buy Juggling with Knives at bit.ly/jugglingwithknives
Dividend Income Portfolio Performance for 2016
Every income investor needs a healthy dose of dividend stocks.
Why not just concentrate on bonds or CDs?
Click to expand...
Because all the different income-producing assets available to income investors have characteristics that make them suited to one market and not another. You need all of these types of assets if you’re going to generate maximum income with minimum risk as the market twists and turns.
For example: bonds are great when interest rates are falling. Buy early in that kind of market and you can just sit back and collect that initial high yield as well as the capital gains that are generated as the bonds appreciate in price with each drop in interest rates.
CDs, on the other hand, are a great way to lock in a yield with almost absolute safety when you’d like to avoid the risk of having to reinvest in an uncertain market or when interest rates are crashing.
Dividend stocks have one very special characteristic that sets them apart from bonds and CDs: companies raise dividends over time. Some companies raise them significantly from one quarter or year to the next. That makes a dividend-paying stock one of the best sources of income when interest rates start to rise.
Bonds will get killed in that environment because bond prices will fall so that yields on existing bonds keep pace with rising interest rates.
But because interest rates usually go up during periods when the economy is cooking, there’s a very good chance that the company you own will be seeing rising profits. And that it will raise its dividend payout to share some of that with shareholders.
With a dividend stock you’ve got a chance that the yield you’re collecting will keep up with rising market interest rates.
But wouldn’t ya know it?
Just when dividend investing is getting to be more important—becoming in my opinion the key stock market strategy for the current market environment—it’s also getting to be more difficult to execute with shifting tax rates and special dividends distorting the reported yield on many stocks.
I think there’s really only one real choice—investors have to pull up their socks and work even harder at their dividend investing strategy. That’s why I revamped the format of the Dividend Income portfolio that I’ve been running since October 2009. The changes aren’t to the basic strategy. That’s worked well, I think, and I’ll give you some numbers later on so you can judge for yourself. No, the changes are designed to do two things: First, to let you and me track the performance of the portfolio more comprehensively and more easily compare it to the performance turned in by other strategies, and second, to generate a bigger and more frequent roster of dividend picks so that readers, especially readers who suddenly have a need to put more money to work in a dividend strategy, have more dividend choices to work with.
Why is dividend investing so important in this environment? I’ve laid out the reasons elsewhere but let me recapitulate here. Volatility will create repeated opportunities to capture yields of 5%–the “new normal” and “paranormal” target rate of return–or more as stock prices fall in the latest panic. By using that 5% dividend yield as a target for buys (and sells) dividend investors will avoid the worst of buying high (yields won’t justify the buy) and selling low (yields will argue that this is a time to buy.) And unlike bond payouts, which are fixed by coupon, stock dividends can rise with time, giving investors some protection against inflation.
The challenge in dividend investing during this period is using dividend yield as a guide to buying and selling without becoming totally and exclusively focused on yield. What continues to matter most is total return. A 5% yield can get wiped out very easily by a relatively small drop in share price.
Going forward, I will continue to report on the cash thrown off by the portfolio—since I recognize that many investors are looking for ways to increase their current cash incomes. But I’m also going to report the total return on the portfolio—so you can compare this performance to other alternatives—and I’m going to assume that an investor will reinvest the cash from these dividend stocks back into other dividend stocks. That will give the portfolio—and investors who follow it—the advantage of compounding over time, one of the biggest strengths in any dividend income strategy.
What are some of the numbers on this portfolio? $29,477 in dividends received from October 2009 through December 31, 2013. On the original $100,000 investment in October 2009 that comes to a 29.5% payout on that initial investment over a period of 39 months. That’s a compound annual growth rate of 8.27%.
And since we care about total return, how about capital gains or losses from the portfolio? The total equity price value of the portfolio came to $119,958 on December 31, 2012. That’s a gain of $19,958 over 39 months on that initial $100,000 investment or a compound annual growth rate of 5.76%.
The total return on the portfolio for that period comes to $49,435 or a compound annual growth rate of 13.2%.
How does that compare to the total return on the Standard & Poor’s 500 Stock Index for that 39-month period? In that period $100,000 invested in the S&P 500 would have grown to $141,468 with price appreciation and dividends included.) That’s a total compounded annual rate of return of 11.26%.
That’s an annual 2 percentage point advantage to my Dividend Income portfolio. That’s significant, I’d argue, in the context of a low risk strategy.
Portfolio Related Posts
Copper for September delivery closed up 2.84% today. Copper stocks did even better with Freeport McMoRan Copper and Gold (FCX) closed up 5.73% for example. Southern Copper (SCCO) ended the day ahed 3.37%. And First Quantum Minerals (FQVLF) traded up 10.14%. So what’s going on?
If you use an Android smart phone in Beijing, you can just tap it to pay for a ride on the city’s transit system. An iPhone? Forget it. Apple’s Phone uses ApplePay. And the company doesn’t grant access to third-party apps like those from Yikatong that handle payments on Beijing’s subways and buses–or to those that handle the bulk of mobile payments in China. Estimates say that Apple has less than a 1% share of China’s mobile payments market.
There’s really nothing wrong with Chesapeake Energy (CHK) that an increase in natural gas prices wouldn’t fix. Yesterday, August 3, Chesapeake reported second quarter earnings of 18 cents a share after subtracting one-time events. In the second quarter of 2016, Chesapeake reported a loss. Wall Street had been expecting earnings of 14 cents a share in this quarter. Adjusted revenue was $1.28 billion. Wall Street was looking for $1.07 billion. And, finally, the company announced that it had reduced debt to $9.7 billion from $10 billion on December 31,2016. And still the stock fell 2.6% yesterday to $4.50.
On August 1 Xylem (XYL) reported second quarter earnings of 59 cents a share (excluding one-time items), beating Wall Street earnings estimates by 2 cents a share. Thanks to recent acquisitions revenue of $1.16 billion climbed 24.9% year over year, slightly missing the analyst consensus of $1.17 billion. And the company raised guidance for 2017 to earnings of $2.30 to $2.40 a share
The big questions for Apple (AAPL) won’t be answered until this fall when investors get to see the new iPhone (and see how hot or not it is) and learn whether or not Apple’s suppliers are indeed having trouble manufacturing key components such as the OLED display. Apple still remains a stock where the future is much more important than the present. But that doesn’t mean the earnings just reported for the June quarter (the third quarter of the company’s fiscal year) aren’t important.
Let’s try to put together a few events from last week into a coherent (or, if that’s too much to hope, at least a semi-coherent) explanation for where the equity market stands now. What events, you ask? How about Friday’s report on second quarter GDP growth, and the earnings reports from Facebook (FB) and Amazon (AMZN)–and the market reaction to those pieces of news?
“Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully,” James Boswell quotes Samuel Johnson as saying upon the occasion of the hanging of William Dodd in 1777 for a loan scam. CEOs don’t (often) face hanging. In their case it’s often the appearance of an unwanted corporate suitor that brings new energy and focus to the job of running a company. So it seems with Bunge (BG), the world’s largest processor of oilseed and a leading merchant of corn soybeans, and wheat.
Alphabet (GOOG) dropped 3.1% in after hours trading in spite of reporting earnings of $5.01 a share, well ahead of the $4.49 expected by Wall Street. Revenue of $26.01 billion, up 21% from the second quarter of 2016, also beat the Wall Street consensus of $25.6 billion. The 21% growth rate was better than the 19% growth in revenue that Wall Street expected. Revenue growth came mostly from increased ads on YouTube and on mobile search. Alphabet said YouTube now reaches 1.5 billion monthly users.What investors and traders didn’t like, though, was a drop in the cost per click of 23%.