Manager: TenStocks
Model: TenStocks
The Tenstocks Covestor Portfolio completed its first year on May 11th, 2011. We do not believe performance based on less than five years of data has any real significance. The predictive value of one year’s worth of performance is close to zero. Multiple grains of salt are required. However, this being a new portfolio, and the first year being the first mile marker on what is hoped to be long and successful marathon, we can take a quick peek at how we did, even if it doesn’t mean very much.
As I write this at the end of April we have underperformed the US and global market over the last year. The two main reasons for this: the market has been more resilient than we expected, and we were under invested. Cash levels, which began at 100%, and averaged around 50% for the year, finished at around 35%.
According to Covestor the portfolio as of 4/29/11 has returned a little better than 11% for the year 2011 to date, versus almost 23% for the Dow Global Index and almost 18% for the S&P 500.
We think this first year performance (model since inception) can be viewed in either of two ways. It could be viewed as disappointing as we underperformed the benchmarks, or somewhat positive as we still produced over 10% even though we were often heavily in cash.
This is a Fed-fueled market that does not reward prudence. Risk is being actively encouraged. If we want to take part in this fabricated fiscal fiesta we must abandon the discipline and strict value criteria that brought us here. We will not do that.
So, after one year, we are not a front runner. We are back in the pack somewhere. As somebody a lot smarter than me has said: In order to finish first you first have to finish.
Our first focus remains long term survival and safety. Everything else is gravy.
