Sadly, my IRR since inception is now lagging the Russell 3000 broad-market index. So now the subject line of my postings isn’t true for the long term either. It’s been that way for a while in the short and medium terms. This just further illustrates value investing having fallen out of favor and the serious lag in returns from the MFI style of stocks in the past. The long term return I have gotten is still satisfactory at the present moment in time. However, without some serious outperformance in the next year or so, the returns I achieved with MFI will likely fall further behind the index.The returns of my portfolio versus those of several Russell indexes through 31-Dec-2020 are as follows: Portfolio Inception Date IRR R3000 R2000Real Money 02-Feb-2006 +9.60% +9.79 +8.32The following table details performance (IRR) over various time frames through the end of the quarter: Portfolio 10 year 5 year 3 year 1 year Real Money +12.65 +7.20 +2.48 -1.25R3000 +13.79 +15.43 +14.49 +20.89R2000 +11.20 +13.26 +10.25 +19.96Fortunately, MFI was never a large percentage of my portfolio allocation. While the returns lately have been poor, the overall pain is somewhat muted by that fact. Upon reflection it seems like in the ‘early days’ that there was a fairly large turnover in the companies that showed up on the list. The past 7 or more years seem like the same names continually stay on the list with the occasional new name here and there. Whether that’s really the case, or whether that had any outcome on the results I cannot say with any certainty. It could just be that I was stubborn and wanted it to work out and held on for longer than I should have.j
Portfolio Inception Date IRR R3000 R2000Real Money 02-Feb-2006 +9.60% +9.79 +8.32
Portfolio 10 year 5 year 3 year 1 year Real Money +12.65 +7.20 +2.48 -1.25R3000 +13.79 +15.43 +14.49 +20.89R2000 +11.20 +13.26 +10.25 +19.96
I had my doubts about MFI after I read the book and ran my own backtest (I believe on portfolio123) and came up with about HALF the return that he claimed. Still better than the market, the S&P 500, though.I ran a small MFI portfolio for a couple of years and noticed the same thing you mentioned. The same names stayed on the list. Worse yet, it kept putting up one stock that was a continual loser, with a steadily declining price and a terrible chart.All that said, these last few years have been odd. The S&P500 performance has largely been a handful of stocks---mainly AMZN and AAPL. Any strategy that didn't heavily weight these 3 or 4 stocks had no chance to beat the S&P 500.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |