Quant Value Newsletter
Last updated: 30 June 2019
Up 153% over nearly nine years; index only 52% (3 times better)
If you had followed all of the European investment ideas since July 2010 when the newsletter started, you would have a return of 153%.
Compare this to the result had you invested in the European STOXX 600 Index - your return would have been only 52%.
This is nearly 3 times better than the index.
And if you only look at the return of the investment ideas (ignoring cash in the portfolio) the performance was even better at +378%, over 7 times better than the index.
Here is the long term performance of the portfolio:
European portfolio total performance
European portfolio yearly performance
As you would expect the returns excluding the cash in the portfolios (green line) are higher on the up as well as down side (because of no cash cushion) but the overall returns were outstanding.
Return on €1000 invested in the European portfolio vs Index
Another way of looking at it is that if you invested €1,000 in the European portfolio, your investment would have grown to €2,533, compared to only €1,516 if you invested in the index and €4,783 if you were fully invested in the investment ideas (i.e. held no cash).
Percentage of positive investments 74% and average returns 31%
No cash returns show you the performance on ONLY the investment ideas excluding the cash in the portfolio which earns nothing and decreases performance.
The following table shows the performance of all the ideas recommended in the European portfolio:
Since July 2010 the newsletter has recommended 171 European companies, all of which, on average, would have given you a return of +31%.
As you can see, the returns have been outstanding!
North American portfolio
The newsletter’s performance in North America has been bad.
The North American ideas have not done nearly as well as in Europe. This is a fact I have never tried to hide, and I have kept you up to date every time I wrote to you about performance.
This is what the returns of the North American portfolio looks like since we started recommending investments in October 2011.
North American portfolio total performance
This is what the yearly returns look like:
North American portfolio yearly performance
The newsletter’s performance in North America has been disappointing
The North American portfolio has not done nearly as well as in Europe. In fact its performance has been a disaster!
This is largely due to the high amounts of cash in the portfolio. If you look at the performance of only the companies (green bars) it was a lot better, except in 2019 when returns were negatively effected by the one and only investment in the portfolio.
Percentage of positive investments 57% and average return 17%
In spite of lagging the index the investment ideas have performed very well, since October 2011 the newsletter has recommended 107 North American companies, all of which would have given you an average return of +17.2%.
Change the strategy?
Although the North American portfolio has substantially lagged behind the S&P 500 index, I am not planning to change the model the newsletter use to select investment ideas.
As you know, regardless of how well they have performed in the past, even the best investment strategies can underperform the market as Joel Greenblatt mentioned in his excellent book The Little Book that Still Beats the Market before they catch up and start to outperform again.
Why bad performance is good
In his book, Joel also says that periods of underperformance are a good thing for a good investment strategy, because without such periods, the strategy would be used by so many investors that it would stop working.
We have to be patient
As I have told you - we just have to be patient. It is simply a matter of time before the North American strategy starts outperforming the market.
Being underinvested with the market at record values is a good thing. It is just hard to look while it continues to go higher leaving the newsletter’s performance even further behind!
This is how the Asian portfolio has performed since we started tracking performance in January 2017.
Percentage of positive investments 54% and average return 11%
In Asia returns have not been great mainly because of the bad performance of the Japanese markets and because the newsletter does not recommend South Korean companies (hard to buy there) a market that has done very well and is included in the index.
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Wishing you profitable investing
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All the investment that have been sold
The following three documents show you detailed returns of all the recommended investments that have been sold: