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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (29510)	12/31/2007 11:24:03 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78673

Ah yes, the famous case of the Beardstown Ladies. Fame and fortune can disappear when you "forget" to account for the monies you added to your portfolio during the year, when you calculate your balances at year end. At the time, I never could figure out how their % gains were possibly as great as they suggested, given the typical stocks they were buying/recommending. Further, I understand the power of compound wisdom and group knowledge, etc., but how a bunch of old lady amateurs could consistently - consistently - beat (reported as percentage gains), professionals - professionals who are among the brainiest people around, working min. 40 hours/wk at it, with their contacts and their group knowledge -- well, that was too hard to believe. And that they could outdo me too by such a great percentage, that was tough too! online.wsj.com You may need a subscription to WSJ to read the above. It's a "where are they now" column dated May 1, 2006. Apparently the group (with new members entering, older leaving/dying) is still buying and holding stocks for the long term (WMT, CAKE, BBBY, types). Maybe doing very well at it. Because when they were properly audited, the results did show that they did produce pretty darn good results (well, imo): "... while a shocked and disappointed public turned its back on the Beardstown Ladies, nobody really paid much attention to another number the outside auditor had discovered: that the club's average annual return from 1983 to 1997 was 15.3%, outpacing the Dow and the club's own pedestrian 1984-93 returns." Plus, the club never got sucked into the dotcom bubble.

To: Jurgis Bekepuris who wrote (29510)	12/31/2007 11:31:56 AM
From: Dale Baker	Read Replies (1) \| Respond to of 78673

Jurgis - I rarely add or withdraw funds from my portfolios except for this year, so I just take my starting balance and subtract it from the ending balance on 12/31. That includes commissions but not taxes, which vary widely depending on what I sold or kept. This year I am figuring results as if I hadn't made a withdrawal and simply held those funds in cash since October. My overall portfolio is flat since the withdrawal so it shouldn't make any difference.

To: Jurgis Bekepuris who wrote (29510)	12/31/2007 1:50:08 PM
From: Paul Senior	Respond to of 78673

"... pre-tax gains is pretty much the only game in town." My point is I don't play the game. (I'm too old for it -g-) I'm not that interested in using the number for bragging or selling or comparing myself to others or to an index. Maybe maybe to see if I am in the ballpark with others who might have a similar risk/reward profile to me - if I even knew who might have the same profile as I do. I'm interested in % completion toward a $ goal. I know my portfolios' values at any given time, and I know my goal for each. I don't need the cockamayme calculations for year-end performance calculations that have to be made for monies added in or taken out. The way I figure my performance, I just need two figures: where I stand and what my goal is.