Hi All, I downloaded the trade log file of value investor portfolio of Zacks. you can subscribe for 7 days for free and have access for it. the portfolio is managed by Tracey Ryniec. I tried to calculate the performance of such portfolio and compare it to the SPY. there was two options to apply the gain and loss. first: for each stock the portfolio suggest, I allocate fixed number of stocks ( lets say 100) second: for each stock the portfolio suggest, I allocate fixed budge ( lets say $10000) Note: -I closed all trades based on today's price so I can calcuate 2019 performance ( partial performance) -The portfolio started at sept 2011 so I had to adjust the SPY performance. This benchmark showed that their performance lags the SPY ! what a surprise !!!!! if zacks lags the SPY then it will be better to save time and money and just buy the index !!! I can't find any trader/hedge fund that beat the market !
You answered your own question. Value investment is long dead. Just buy SPY. or better yet. QQQ. By the way Zacks is the worst.
NDX has been doing 12.5% since the day it was born in 1986... it's virtually unbeatable... unless you have mega millions AND lucky enough to find someone like Paul Tudor Jones.. therefore QQQ/XLK is no brainer... with a small twist.. historically the QQQ has about a 20% P/E premium on the SPY... which is about where we are right now. a few years ago the premium was at 0 and it was a no brainer to go all QQQ... nowadays with the fair premium perhaps just a mix of QQQ and SPY, depending on your risk appetite. I'd not invest in IWM... some funny earning accounting going on there... plus there has been a paradigm shift where the small size is no longer an advantage... we are going on an AI revolution and only the big guys have the resources to do big stuff.
Keep in mind that QQQ had about an 80% drawdown in the dot-com crash while the S&P was down about 50%. During the 2008 financial crisis, the drawdowns were much more similar (both in the 55-60% range I believe). Of course, QQQ had a huge run up before dot.com and still has good returns in spite of it, but you better be able to stomach a huge drawdown after a huge run-up.
I use Buffett guideline. 50% draw down and sleep well. However. I personally guarantee there will be no crash in the foreseeable future. The public participation rate is too low. This is not how a bubble pops. If there is one. I have always been asking the question and nobody can give an answer. Because there is no answer. Find me another asset class in the world. High quality as the sp500 and yielding 5.9% forward. Not to mention I can trade the short side when we actually have a bubble. But that will be at least till the equity earning yield get somewhere close to the bond yield. With 10 year close to 2% SP is RIDICULOUSLY CHEAP. borrowing Buffetts words.
for finding 'value'? I wouldn't bother as 'value investing' is dead anyway. the reason I said they are the worst is because I have researched this before.. Zack's results are worse than say portfolio123.com QQQ is unbeatable... no need to bother with anything else.
Forget about value investing. I am talking in general . I am looking for successful portfolio so i can learn their strategies wether it is value, growth, momentum ,... Do you know anything about performance of fools.com