Sleep Well Fund Investing Results

Updates: Jan 2012 update - Feb 2011 - Oct 2010 - March 2010 - March 2009 Dec 2006 (adding Tesco) - February 2007 - February 2008

In April 2005 I posted a message to the Curious Cat blog about 10 stocks for the next 10 years. I also setup an fund through Marketocracy, which allows for 3rd party tracking of investing results.

These pages do not represent investment advice (in deciding what investments to make you must consider your unique situation). The pages just provide some information on my experience. I find managing the marketocracy funds educational. You can manage your own fund through marketocracy for free.

I am continuing to manage the fund in that way. I intend to have little turnover. As of January 2012 the return (marketocracy subtracts "management fees" of 2%, in addition to transaction fees, to mimic a real fund's expenses) has been 5.9% annualized (so about 7.9% without the 2% fee)*. The S&P 500 is up 4.1% for the same period (the return is beating the S&P 500 by 380 basis points, without the fees). The marketocracy portfolio includes small amounts in several stocks since I can't purchase Tesco using marketocracy and some cash (with Tesco I would be performing worse, but still above 300 basis points better annually, I believe).

*Tesco has purchase price of $22.55 on Dec 11th 2006. Unfortunately since marketocracy still doesn't have this company available the exact returns are difficult to calculate (factoring in dividends), so I just make a very rough estimate. I reduced Tesco from 10% to 5% in late 2011.

** Dell was sold in 2010 at a 50% loss and replaced by Apple.

Those 10 stocks (now 12) were selected with the main criteria being: "companies with a history of large positive cash flow (that seemed likely to continue that trend)." The rules for setting up a marketocracy required more diversification at that time. I have small percentages in a couple other stocks to comply with marketocracy diversification rules in the actual portfolio. I am leaving Dell as the twelth stock for now, but may well remove it.

I would consider replacing PetroChina and Pfizer: I like both sectors more than I like the companies themselves. Still as part of the portfolio I think they are valuable. I would like a bit more exposure to commodities and health care but I haven't found the right companies to add to this portfolio (I tend to like smaller companies and haven't found companies I am happy to lock away for 5-10 years).

I have been running another mock mutual fund portfolio on Marketocracy since 1993. See more on the Darvamore Fund (see results from inception July 2000 to Jan 2006 the annualized return was 5% v. -.5% for the S&P 500. As of August 2009 the results are: .4% v -2.5% (beating the S&P 500 by 3% after a 2% "expense fee" - or 5% without the fee included).

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