Saturday, April 18, 2009

Update On Marketocracy Portfolio


My portfolio was started on 1st August 2008. Marketocracy lets you manage a virtual portfolio of $1M in a simulated trading environment, allowing you to track your performance accurately and compare your fund management skills to other investors and professional fund managers. Yes, they do take into account transaction cost as well. If your track record turns out to be one of the best, you could be hired to help manage a real fund at Marketocracy. It's a great place to learn, and a great place to prove your talent. They also have important rules to ensure that you are running an actual investing portfolio and not just sitting on cash:
  • No position can exceed 25% of your total portfolio value.
  • Half your portfolio must be comprised of positions under 10% each.
  • Your cash position isn't limited by this guideline, although you must be 65% invested
My fund was smartly called SMF, or Salvador Mutual Fund (no, not the foul language acronyms you are thinking). So far so good, although the first couple of months was iffy. SMF fund performance in orange colour.

The main objective of the fund is to beat the S&P 500. For the past 6 months, the S&P 500 has lost 6.58% while my fund has gained 27.3%. There are usually rules which dictate that you must be at least 60% or 80% invested at all time, and your aim is to beat the index. If you can consistently beat the index, you should be golden. If you look at the turnover rates, I have increased the trading activity over the past two months as I think the recovery is still volatile and is more suited to be traded.

modern portfolio theory, you basically aim to beat the index, based on the premise that:


over the long run stocks offer superior returns


hence if you consistently beat the index, over the long run, you should have superior returns




graph of fund vs. market indexes
SMF m100 S&P 500 DJIA Nasdaq


recent returns right curve


RETURNS
Last Week 3.55%
Last Month 25.13%
Last 3 Months 30.78%
Last 6 Months 27.34%
Last 12 Months N/A
Last 2 Years N/A
Last 3 Years N/A
Last 5 Years N/A
Since Inception -11.71%
(Annualized) -15.71%
S&P500 RETURNS
Last Week 1.04%
Last Month 11.39%
Last 3 Months 2.55%
Last 6 Months -6.58%
Last 12 Months N/A
Last 2 Years N/A
Last 3 Years N/A
Last 5 Years N/A
Since Inception -29.75%
(Annualized) -38.40%
RETURNS VS S&P500
Last Week 2.52%
Last Month 13.74%
Last 3 Months 28.23%
Last 6 Months 33.93%
Last 12 Months N/A
Last 2 Years N/A
Last 3 Years N/A
Last 5 Years N/A
Since Inception 18.04%
(Annualized) 22.69%



left curve alpha/beta vs. S&P500 right curve


Alpha 34.99%
Beta 1.12
R-Squared 0.78



left curve turnover right curve


Last Month 119.32%
Last 3 Months 163.76%
Last 6 Months 189.82%
Last 12 Months N/A



Symbol Price Shares Portion of Fund Gains Today Inception Return
EXM $7.24 8,000 6.32% $34,961.48 3.72% 36.83%
KBH $16.59 6,500 11.99% $19,730.30 1.90% 22.39%
ERX $26.85 3,000 8.95% $20,702.75 1.94% 21.09%
BRCD $4.58 15,000 7.76% $8,139.56 0.22% 13.44%
UBET $1.80 20,000 4.08% $6,590.86 0.00% 11.02%
QSII $49.80 2,000 11.39% $5,127.90 -0.93% 5.43%
DLTR $43.46 2,000 9.87% $4,022.24 -0.28% 4.85%
GCH $9.52 7,157 7.72% -$3,331.55 -0.85% -3.80%
ACTG $4.18 12,000 5.60% -$5,661.30 1.55% -5.93%
WFR $15.47 6,000 10.51% -$12,943.44 0.06% -12.24%
FXI $32.55 2,000 7.46% -$25,322.00 -1.17% -28.00%





p/s photos: Xu Jinglei


4 comments:

Soon Hui said...

Dali,

I don't mean to look down on you. I know you are a capable and bright person. But do you seriously think that you can outperform all those professional money managers by consistently beating the S&P Index, because I know that 90% ( or so) of the professional money managers underperformed this benchmark in the past, with transaction costs taken into account.

I know, your starting has been good, but investment is a long term game...

Salvatore_Dali said...

soon hui,

no u did not look down on me, u just said something quite silly...
how can u ask me if i seriously think i can outperform the index... that is exactly what i am trying to show u all...
and marketocracy takes all costs into calculation, brokerage n state/gov/exchange fees

its not my first day as a fund manager, i was one for 6 years before venturing into research...
better for u to come back when i fail to beat the index n laugh at me then ok... till then what u said is meaningless

i also know that 90% cannot beat the indices... thats what i have been posting many times, why tell me something i posted many times before... so whats the point of yr posting? ask me to shut down, stop managing the fund, or what???

chanyip said...

well done! beating the index by 27% shows that we can still earn while it's a bear market.
do you have any recommendation for malaysian and singapore stocks?
thanks!

sopsky said...

hi dali,

the continue volatility in the market, does it still do good to use gold as a hedge for the amount of equities exposed? any time soon to revisit your view on gold and oil again? thanks!