Sunday, June 28, 2009

Update On Marketocracy Portfolio

Fund Performance for salvadordali's Mutual Fund
left curve fund rankings right curve

For the six month period ending March 31, 2009 your fund outperformed 97.8% of the other funds on our site. Your forum and other privileges are based on this ranking

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 ended 28 June, the S&P 500 has gained 6.76% (previously 1.33%) while my fund has gained 63.3% (previously 51.1%). There are usually rules which dictate that you must be at least 65% 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

recent returns vs. major indexes right curve
SMF 0.42% 46.16% 53.80%
S&P 500 0.14% 15.86% 3.10%
DOW -0.73% 10.90% -3.85%
Nasdaq 3.60% 20.26% 16.56%

recent returns right curve
Last Week -0.18%
Last Month 5.41%
Last 3 Months 42.76%
Last 6 Months 63.67%

Last Week -0.21%
Last Month 3.08%
Last 3 Months 13.30%
Last 6 Months 6.76%

Last Week 0.03%
Last Month 2.33%
Last 3 Months 29.45%
Last 6 Months 56.91%

left curve alpha/beta vs. S&P500 right curve
Alpha 54.37%
Beta 1.26
R-Squared 0.84
left curve turnover right curve
Last Month 36.12%
Last 3 Months 188.85%
Last 6 Months 292.71%

Symbol Price Shares Value Portion of Fund Gains Current Return
BAC $12.75 6,000 $76,500.00 6.90% $36,593.22 42.46%
STT $48.33 2,500 $120,825.00 10.90% $41,368.54 40.97% Details
ACTG $7.60 16,000 $121,600.00 10.97% $37,791.79 30.62% Details
QSII $56.47 1,500 $84,705.00 7.64% $16,267.77 13.56% Details
SXE $32.35 3,000 $97,050.00 8.76% $9,089.54 10.33% Details MIDDLE
MGM $6.78 14,000 $94,920.00 8.56% $5,124.78 5.71%
WFR $17.96 6,000 $107,760.00 9.72% $1,996.56 1.89%
F $5.61 30,000 $168,300.00 15.19% -$1,475.01 -0.87%
JEC $41.37 1,500 $62,055.00 5.60% -$645.73 -1.03%
AIG $1.46 50,000 $73,000.00 6.59% -$1,269.20 -1.71% Details
BDD $8.48 11,000 $93,280.00 8.42% -$5,221.13 -5.30% Details

p/s photos: Fukuda Saki

1 comment:

ronnie said...

Mr Dali,

Congratulations on your fine performance.

What are your views on local fund managers ? I have studied the performance of local fund managers and their performance is atrocious. My conclusion is that it is more fruitful to acquire a Porsche than invest in local unit trust. By my estimation, 80% of the so-called fund managers are incompetent. They are definitely well versed in financial jargon and they speak and write well. They come across as intelligent and learned people. The performance of their funds is a totally different matter. Many of the equity funds are down more than 50% and ther are bond funds that are under water.

There is even a unit trust where the CEO is also the CIO. Not that the unit trust has done anything wrong but surely the functions are better off separated.

The local fund management industry needs to be overhauled and upgraded ASAP. The industry needs to employ real professionals who are adequately rewarded for their performance.

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