S&P 500 at 5,000?

[Lootman]

About half an hour ago the S&P 500 hit 4,999.89 before falling back slightly. So close.

The 2009 intra-day low was 666, so anyone who took Buffett's advice about buying at the point of maximum fear is up 7.5 times since then (excluding dividends and FX gains that I cannot be bothered to compute).

That works out to about a 14.5% annual compounded gain. Curious if any Lemon has beaten that with an active strategy or UK-centric strategy?

[bluedonkey]

What was the average for the index in 2009? That might be a more realistic price point. No, I haven't achieved 14.5% compound, unfortunately.

[GoSeigen]

About half an hour ago the S&P 500 hit 4,999.89 before falling back slightly. So close.

The 2009 intra-day low was 666, so anyone who took Buffett's advice about buying at the point of maximum fear is up 7.5 times since then (excluding dividends and FX gains that I cannot be bothered to compute).

That works out to about a 14.5% annual compounded gain. Curious if any Lemon has beaten that with an active strategy or UK-centric strategy?

Not beaten, but close (13.5% Net Net), with a UK bond-centric active strategy including being short S&P500 to some extent over most of the relevant period.

GS
P.S. Hmm, probably beaten 14.5% if for a fair comparison we are talking about returns from the portfolio low of 2007 (28% drawdown -- bias was heavily short). The 13.5% is calculated over entire investing period from 2001ish.

[Oggy]

Anyone who has bettered the S&P has done very very well. For the average Joe like me, I cannot think of many better places for my hard earned which offers a similar reasonably acceptable level of risk and diversity. Will it continue I wonder?

[mrodent]

Anyone who has bettered the S&P has done very very well. For the average Joe like me, I cannot think of many better places for my hard earned which offers a similar reasonably acceptable level of risk and diversity. Will it continue I wonder?

I refer you to the latest update from http://www.goatsentrails.com ... an unequivocal "we've never before been so sure about our ambivalence".

[SalvorHardin]

In the 2000s I found it fairly easy to beat the S&P 500, due to focusing heavily on small oil explorers (spending lots of time looking at reserve estimates, production profiles and some extremely good analysis generated by the Oil & Gas community on TMF) at a time when the market had completely underestimated the demand for oil. In several years I earned at least 20% more than the S&P500 (that's S&P 500 returns + 20%, not S&P 500 x 1.2) and in one year my total return was over 100%.

Unfortunately it has been a mixed bag since the 2008 financial crisis, and much harder to outperform. In the last five years I've only managed it once, in 2021 mostly thanks to the Archaegos Capital scandal where a large family office became massively exposed to ViacomCBS (amongst others), causing a price spike up to $100 when the shares had only been $14 a few months earlier. The family office's manager is currently facing serious fraud charges and ViacomCBS's (now Paramount Global) share price has collapsed back to below $14, leaving a lot of stale bulls who didn't get out as I and many others did once the price approached $100 (I recently bought back into Paramount Global).

https://en.wikipedia.org/wiki/Archegos_Capital_Management

My stalwarts (and two largest holdings), Canadian Pacific and Union Pacific, have comfortably outperformed the S&P500 since 2009 (each just over 19% p.a. compound) and I don't see them underperforming over the next decade or two. It's a shame about most of the rest

Anyway in the last couple of years I made a bit of an adjustment by buying two investments that I would never have done some years ago; an S&P500 Index Tracker plus a small holding in Microsoft (both of which are now each roughly 3.2% of my portfolio). At the time friends wondered if I had had a rush of blood to my head

That said I'm not complaining. Had I tracked the indexes in the early 2000s I'd probably still be working (especially given the truly pedestrian performance of the FTSE100).

[simoan]

The problem with these kinds of observations, is that investing is about the future, not the past. FWIW my own US portfolio has beaten the S&P500 because of very overweight positions in Apple and Microsoft, plus more latterly a large position in the US listed shares of Cameco. But that's not big or clever. Who would've predicted such performance? Not me, especially when Steve Ballmer was CEO of Microsoft and he thought it'd be a great idea to buy Nokia. FWLIW my largest position is in Fundsmith Equity which has managed a not too shabby 15.4% since inception in late 2010, although some of that gain will be due to Sterling depreciation.

[Bubblesofearth]

Interesting thread. Lootman pretending to be curious if anyone UK-centric has beaten the S&P, knowing full well it's unlikely. Basically another dig at UK only investors, probably focussing his scorn on HYPers.

Then a bit of thinly disguised chest thumping from GS, SalvorHardin and Simoan.

Seems survivor bias is alive and well on TLF. Assuming the anecdotals are even true and not just cherries plucked from otherwise ordinary performances. Cherries we've been fed many times before by the usual suspects on here.

FWIW (very little I suspect) the performance of my own portfolio since the GFC has been well short of the S&P. Hope I don't come across as bitter

boE

[simoan]

Interesting thread. Lootman pretending to be curious if anyone UK-centric has beaten the S&P, knowing full well it's unlikely. Basically another dig at UK only investors, probably focussing his scorn on HYPers.

Then a bit of thinly disguised chest thumping from GS, SalvorHardin and Simoan.

Seems survivor bias is alive and well on TLF. Assuming the anecdotals are even true and not just cherries plucked from otherwise ordinary performances. Cherries we've been fed many times before by the usual suspects on here.

FWIW (very little I suspect) the performance of my own portfolio since the GFC has been well short of the S&P. Hope I don't come across as bitter

boE

I take exception at your post. My own post made it quite clear I was not “chest thumping” and in fact quite the opposite ie you can beat the index just by holding a few companies in a very overweight position and getting lucky. When I first bought Microsoft in 2004 it was completely impossible to see the company it is today. Same goes for Apple. Nothing clever about it other than holding on and not selling due to any number of negative occurrences along the way whilst adding more at various times.

[SalvorHardin]

Interesting thread. Lootman pretending to be curious if anyone UK-centric has beaten the S&P, knowing full well it's unlikely. Basically another dig at UK only investors, probably focussing his scorn on HYPers.

Then a bit of thinly disguised chest thumping from GS, SalvorHardin and Simoan.

Seems survivor bias is alive and well on TLF. Assuming the anecdotals are even true and not just cherries plucked from otherwise ordinary performances. Cherries we've been fed many times before by the usual suspects on here.

FWIW (very little I suspect) the performance of my own portfolio since the GFC has been well short of the S&P. Hope I don't come across as bitter

boE

Yes it's survivor bias. Though some of us who are based in the UK treat America as our primary stockmarket (in my case Canada is a close second).

If you were on TMF back in the early 2000s you may have noticed that a lot of us on the Oil and Gas boards were making a lot of money. Some made up to 100x their original investment in Soco; mine was a mere 24x. And there were lots more small oils which did exceptionally well back then.

As to Union Pacific and Canadian Pacific, I have written about them for many years. If TMF hadn't deleted its archive I could show you quite a few posts of mine, both on the UK and American sites.

In particular when Berkshire Hathaway bought the BNSF railroad in 2009, which was a cue for people to suggest that British investors should buy shares in First Group because it operated trains. I pointed out that this made as much sense as buying a cinema if Buffett bought a farm; they were totally different businesses.

I suggested Union Pacific (up over 850% since then, First Group was down around 55% when I checked a few months ago).

I don't think that beating the S&P500 one year in the last five is "chest thumping", especially since in that one year I beat the S&P500 because someone tried to corner the market and created a massive short squeeze in the process.

[Bubblesofearth]

I take exception at your post.

Of course you do. I fully realise I've been a very naughty boy. I just couldn't help myself. Seriously, some of these success stories have been shoved down our throats for years. Soco stands out as the poster child for this. Galling enough to be constantly reminded of how some posters made it rich through the O&G minnows but far more so to be expected to believe it was skill not luck.

BoE

[SalvorHardin]

I take exception at your post.

Of course you do. I fully realise I've been a very naughty boy. I just couldn't help myself. Seriously, some of these success stories have been shoved down our throats for years. Soco stands out as the poster child for this. Galling enough to be constantly reminded of how some posters made it rich through the O&G minnows but far more so to be expected to believe it was skill not luck.

BoE

Soco (and the other oils) were very heavily researched by the TMF Oil and Gas community. The sort of detailed analysis that is very rarely seen on TLF but was quite common in the 2000s on TMF.

Soco was well known, well publicised on TMF and lots of people chose to ignore us (and indeed, be quite hostile) even when it was obvious that we were onto something. Then they got seriously jealous and drove top quality oil posters like emptyend off TMF.

The vital thing with Soco was to eventually sell. Last time I looked its shares had fallen by more than 90% off their peak (which was a bit over £24 in old money before the 4 for 1 split).

My main contribution was discovering Dragon Oil, analysing its reserves and digging into Turkmenistan's politics. A mere 60 bagger, though I made a lot more on Soco (and Dana).

As to whether it was luck, I refer you to film producer Samuel Goldwyn; "I'm a great believer in luck, and I find the harder I work the more I have of it."

[simoan]

I take exception at your post.

Of course you do. I fully realise I've been a very naughty boy. I just couldn't help myself. Seriously, some of these success stories have been shoved down our throats for years. Soco stands out as the poster child for this. Galling enough to be constantly reminded of how some posters made it rich through the O&G minnows but far more so to be expected to believe it was skill not luck.

BoE

Well that says more about you than anyone else. Time to look in the mirror and consider your own biases rather than flinging accusations at others.

[Bubblesofearth]

Well that says more about you than anyone else. Time to look in the mirror and consider your own biases rather than flinging accusations at others.

Yeah, yeah, all very p/c I'm sure. Problem is people start to believe these stories and that they can emulate them either by directly copying or opting for risky or concentrated portfolios. That's when real financial damage is done rather than inconsequential accusations which only matter if you care about them. I no longer do.

BoE

[Lootman]

Note to add: we touched at 5,000.40 before sliding back a little.

Time for a pause that refreshes?

[Bubblesofearth]

Soco (and the other oils) were very heavily researched by the TMF Oil and Gas community. The sort of detailed analysis that is very rarely seen on TLF but was quite common in the 2000s on TMF.

Soco was well known, well publicised on TMF and lots of people chose to ignore us (and indeed, be quite hostile) even when it was obvious that we were onto something. Then they got seriously jealous and drove top quality oil posters like emptyend off TMF.

The vital thing with Soco was to eventually sell. Last time I looked its shares had fallen by more than 90% off their peak (which was a bit over £24 in old money before the 4 for 1 split).


[/i]

The more detailed the analysis the more likely you will put success down to skill rather than luck. The oil price, like the value of major currencies, is notoriously difficult to predict. Millions of analysts are constantly looking at it. To believe you have an edge is hubris in the extreme. Without the big rise in the price of oil the Soco story, and the story of many other O&G companies, would have played out very differently.

What you are doing by continually harking back to those days is suggesting that it is possible for private investors to outsmart the market. All the evidence I've ever seen points the other way. This makes it a very dangerous suggestion for the many would be investors who are hungry for anything that might give them an edge - tip sheets, get rich courses, pyramid schemes, Bitcoin etc.

It's luck and survivor bias, nothing more.

BoE

[simoan]

Well that says more about you than anyone else. Time to look in the mirror and consider your own biases rather than flinging accusations at others.

Yeah, yeah, all very p/c I'm sure. Problem is people start to believe these stories and that they can emulate them either by directly copying or opting for risky or concentrated portfolios. That's when real financial damage is done rather than inconsequential accusations which only matter if you care about them. I no longer do.

BoE

No stories. Just facts in my post. The return of Fundsmith since 2010 is public and irrefutable. The return on Microsoft likewise. Buy good companies and do nothing works. Buy poor companies and do nothing does not. The most discussed investment approach on this forum is the latter.

[simoan]

Note to add: we touched at 5,000.40 before sliding back a little.

Time for a pause that refreshes?

It’s the VIX that worries me. It just keeps marching up and there’s so little volatility. It makes me feel uneasy.

[Lootman]

The more detailed the analysis the more likely you will put success down to skill rather than luck. The oil price, like the value of major currencies, is notoriously difficult to predict. Millions of analysts are constantly looking at it. To believe you have an edge is hubris in the extreme. Without the big rise in the price of oil the Soco story, and the story of many other O&G companies, would have played out very differently.

What you are doing by continually harking back to those days is suggesting that it is possible for private investors to outsmart the market. All the evidence I've ever seen points the other way. This makes it a very dangerous suggestion for the many would be investors who are hungry for anything that might give them an edge - tip sheets, get rich courses, pyramid schemes, Bitcoin etc.

It's luck and survivor bias, nothing more.

You are basically restating the efficient market hypothesis that claims that you can only beat the market through luck, taking on more risk or having inside information. Personally I am not unsympathetic to that and my largest holding by far is in a S&P 500 index fund.

That said and unlike you, I do want to hear from those Lemons who have beaten the market. I want to learn from them and would never seek to disparage or discourage them, even if their style of investing does not suit me.

And of course even your beloved HYP had a tip sheet for a while. And HYP surely also represents itself as better than index investing. That said I do enjoy TJH's posts as he clearly has found a version of HYP that can give competitive returns.

My OP was trying to show how good a neutral benchmark can be. If in 1999 someone had offered you a 16% (with dividends) annual return over the next 15 years then I suspect you would have taken it over picking individual shares. And I did a bit of both and so only got about 12% overall.

[Lootman]

Note to add: we touched at 5,000.40 before sliding back a little.

Time for a pause that refreshes?

It’s the VIX that worries me. It just keeps marching up and there’s so little volatility. It makes me feel uneasy.

A Vix of 12.79 is high?

https://www.google.com/search?q=vix+sto ... e&ie=UTF-8