Perspectives, by Mark Robertson, Managing Partner
Originally Posted on January 1st, 2010 — we felt it was worth another look back at a visit from Santa … from a few years ago on the heels of a vicious bear market.
With certain apologies to Paul Harvey, we need to continue a look at our “Best Season To Invest?” theme from last month. Our December cover story included an exchange with Santa Claus where we playfully negotiated three wishes. The 3rd wish was for Santa to let us know the best day to invest during any given year.
Santa reluctantly agreed to see what he could do … after exploring our comments about lottery-related spam email. But his message was pretty clear, the perceived advantage isn’t nearly what most people think it would be.
We resumed the discussion where we left off during his visit to Rochester Hills, Michigan on a snowy December 25.
A Wish Already Granted? $100 invested into Tin Cup (our model portfolio) would have led to total assets of $1565 over the last ten years. The same $1000 invested on the best day for investing in each of those ten years stands at $1317. Investing regularly in quality companies with leadership projected returns turns out to be pretty compelling.
MI: So how’d it go in Omaha?
Santa: I’m still undecided. Buffett is on probation until I figure out why he said “Buy American!” and then bought a Chinese stock? But he gets good list points for pointing out long-term investing in general.
MI: Indeed. We think Buffett, and for that matter, all of us, should be willing to invest wherever your sled flies on Christmas Eve.
Santa: I might be mixed up on the years … but in any event, he’s on probation until I finish reading Snowball. If he’s gonna use one of my favorites for the title of the book, he’d better behave. I’m not convinced. For now, it’s a fly-by.
MI: Charlie Munger, too?
Santa: Not a chance. Charlie’s a hoot, one of my favorites. I may leave him a clump of coal just to play mind games with him. He’ll probably wonder if Buffett is out to buy an entire coal company next.
MI: Now who’s misbehaving?
Santa: Watch it. That 2010 list is already a work-in-progress. You’re already hanging in the balance.
MI: OK, I’ll add “being nice” to my list of resolutions for 2010.
Santa: It’s early. You have a shot.
MI: We’ve been doing some more thinking about that wasted third wish from last month. Is it possible that I wished for something less than we already have?
Santa: Ding. Ding. And two more angels get their wings. Your subscribers have already checked in with their own observations that Tin Cup gained 48% during 2009?
MI: Right. We’re thrilled!
Santa: Well … investing $100/year in Tin Cup and not worrying about “best day of the year” achieved $1565 over the last ten years vs. $1317 using the “best day” approach. Celebrate that. Hey! Nice touch on the beverage, chips and salsa … milk and cookies are great, but they get old after a few million stops.
MI: Thanks, Santa. Have a great year!