Performances

Performances of my first book on this series

Performances are measured by the average return of all the stocks in the recommended lists. To illustrate, the average return of 2 stocks with one 40% and one 10% is 30%. Commissions and dividends are not included for simplicity. Survival bias (stocks having been merged or deleted from the database) is ignored for the short period.

Annualized Return

It is used for better comparison. However, I try to skip annualized returns for less than 10 days as it would detort the results. The annualized return is a double-edge sword. It amplifies the result in either direction.

If you have 3 test returns: 10% in 2 years, 10% in 1 year and 10% in 6 months. It appears they are the same. However, the annualized return tells the right story. They are 5%, 10% and 20% respectively for the 3 test results.

Beat SPY by

In addition, beating SPY (an ETF simulating S&P 500) is a good yardstick on how the selected stocks perform. My returns do not include dividends, commissions and bid spreads. In the past few years, SPY is harder to beat than S&P500 as it has many successful FAANG stocks. Their successes may change. 

Ask any mutual fund manager how his/her career would improve by beating it by 5%. Beating it by more than 5% is huge. It may not be sustainable in the future and past performance has nothing to do with future performance. But, the last selection did.

Beat SPY = (Avg. Return – SPY return) / SPY return

Performance of my book “Best Stocks 2014 According to me”

This is my first book from my memory published in Dec. 16, 2013. Here is the performance from Dec. 16, 2013 to June, 16, 2014, 6 months away.

	Ann. %	SPY%	Beat SPY by
All stocks	77%	34%	126%
Sub lists:
Conservative	79%	34%	132%
Risky	97%	34%	185%
Riskiest	46%	34%	35%

The average return of the list of the Riskiest Stocks does not perform well relative to the other two lists. In the future book, most likely I will eliminate the list of Riskiest Stocks and keep the number of stocks to around 100. At the meantime, select the stocks in the first two lists, which have better performances.

Performance of my book “Best Stocks for 2020”

This book recommends stocks for the entire year from 2019 to the end of 2019. This book was published in May 24, 2019. Here is the performance from May 24, 2019 (the publish date) to June 24, 1 month later.

	Ann. %	SPY%	Beat SPY by
All stocks	65.73%	45.25%	45%

I put money where my mouth is. Ask any subscription service whether they invest in their own recommended stocks, dates of purchases and the performances. You can cheat with daily price fluctuations and many other tricks, but not in a real portfolio from a broker. Here our mine of the recommended stocks from this book above. The current prices are based on today’s date (6/28/2019).

Stock	Buy Date	Return	Ann Return
COP	05/29/19	3%	41%
LUV	05/24/19	-1%	-12%
ORCL	05/28/19	7%	81%
Avg.	05/27/19	3%	37%

Average holding period is 32 days. I placed a buy order on MOH. I did not get it as it rocketed from the start. Otherwise the performance should be better. That may explain why my cash portfolio is less than the recommended portfolio.