On Pitching Better

Dance Until Everybody’s Watching

 Mark  Robertson   “Work like you don’t need the money. Love like you’ve never been    hurt. Dance like nobody’s watching.” — Satchel Paige (1906-82)
. . . and sing like you do when you’re alone and behind the wheel of your car. I’m not sure what happens to that amazing rock star or would-be opera sensation when I leave the car, but my serenades just aren’t the same as between Point A and Point B. Anybody else encounter that mystery?

Satchel Paige is part of the magical lore of baseball legend. He springs to mind almost every year as dreams develop in the hearts and minds of Americans with the start of yet another baseball season. Yes, I believe the Chicago Cubs and Boston Red Sox will win it all someday.

If we could ask him, Paige would agree.

But Satchel transcends the sporting world. His words are about life itself. He’s often quoted, and you’ll recognize many of his gems.

“Age is a question of mind over matter. If you don’t mind, it doesn’t matter.”

Every time I see that one I smile and think of people like Tom O’Hara and Ralph Seger and countless NAIC chapter volunteers who are so willing to share their investing experience with anybody who will listen. Many of them have a lot of years, but their spirit prevents them from having a lot of “age.”

Paige was timeless. We’re not even sure when he was born — it’s estimated that he was born on July 7, 1906. In 1965 he took the pitching mound for the last time, throwing three shutout innings for the Kansas City Athletics. Fifty-nine years old. Wow.

“You win a few, you lose a few. Some get rained out. But you got to dress for them all.”

“Don’t pray when it rains if you don’t pray when the sun shines.”

“I never threw an illegal pitch. The trouble is, once in a while I would toss one that ain’t never been seen by this generation.”

Pitching Better

This is part of where the challenge that faces us resides. NAIC investing ain’t all that easy to see by this or the next generation. At least not yet.

And we simply have to find effective means of making this so.

During a recent strategy session, a group of us spent considerable time discussing the attributes of NAIC and investing better. One of the participants chimed in with: “These characteristics are all part of the better investing experience. However, what we do ‘here’ is really more about enabling individuals to access a lifetime of successful investing. We can point to case after case where an individual or group of people have experienced a favorable impact on their lives as a result of what we think of as investing better. Perhaps we ought to focus a little more on this notion of better.”

“I never had a job. I always played baseball.”

“Ain’t no man can avoid being average, but there ain’t no man got to be common.”

NAIC holds a solution to many of the perplexing mysteries of investing. As Satchel suggests, this carries a responsibility, and it doesn’t have to be “work.” It’s part of our purpose.

Some recent surveys show that the average investor is generally miserable. We also know that NAIC investors are a bold exception. In exit surveys (from former members) conducted in February 2004, we asked them if NAIC made them better investors during the time they spent with us. Result: Yes — 73. No — 0.

Better — According to Webster

The definitions for the word better include: being positive or desirable in nature, a good experience; having qualities that distinguish, serving a desired purpose; superior to the average, of high quality; complete, thorough, reliable, beneficial to health; and a condition of excellence.

All of this reconciles pretty well with my view of what investing better is all about. It’s a time-honored approach that’s ageless. “How old would you be if you didn’t know how old you are?” It’s an interesting question and challenge.

Investing better. Enabling better futures. NAIC investors do not sing or dance alone.

Mark Robertson is the founder and managing partner of Manifest Investing, an investment research firm focused on strategic long-term principles. He served as senior contributing editor for NAIC/BetterInvesting from 1997 to 2004.  This article was originally published in Better Investing in 2004.

Ten Years … Gone “Hog Wild”

This started with the top trailing 10-year performers from the S&P 500, which is cool — and at least they got that going for them. But we know the virtues of All-of-the-Above investing, which means the Value Line 1700 list is even cooler. Look what Groundhog Nation did with them.

Carl Quintanilla (CNBC) provided this list of the best performing stocks in the S&P 500 since the market low ten years ago.

It’s been fun and rewarding for many. Take note how many of these have been covered and/or resident in our model portfolios, etc. since then.

Who did we miss? Why?

Spy top 50 performers since 2009 20190308

So what were you doing when the “Great” Recession bottomed on March 9, 2009? CNBC got this whole this started with the S&P 500 but we know that even better opportunity manifests in the Value Line 1700 — and we weren’t disappointed.

There are 1200 stocks with stock price data for 3/9/2009 and 3/8/2019, ten years later. Investing $100 into each of these 1200 ($120,000) would worth $1,012,892 this past weekend — an annualized total return of 23.8%. Sorry, Carl Quintanilla, but the S&P 500 checks in at 17.3%.

  • The annualized total return (10 years) on the Wilshire 5000 (VTSMX) is 17.5%. 655 of the 1200 stocks (54.6%) beat the market. This collective of gainers have an average quality ranking of 69.
  • 1138-of-1200 (94.8%) gained and a have a current value greater than $100. The stocks that lost ground have an average quality ranking of 27.
  • The top performing decile has a sales growth forecast of 9.2%. The bottom decile stands with a 5.3% growth forecast.
  • If the Value Line Arithmetic Average were “investable,” the annualized total return was 19.7% as 999.30 advanced to 6046.07 during the time period. All-of-the-Above Investing works.

Gone Hog Wild (March 2009)

Every year we run a stock picking contest that starts on Groundhog Day and continues until the next Groundhog Day. Back in March 2009, we featured the most-frequently selected stocks as something of a screening exercise. As the accompanying image shows, yes, Virginia, the average return forecast was “north” of 20% at the time.

The Sweet 16 stocks featured back in March 2009 generated a return of 21.2%.

The top performer was the swing-for-the-fences selection of Sigma Designs (SIGM) and every once in a while, Casey does not always strike out. 36.6% can be a wonderful thing. But the rest of the field was also formidable and include a number of community favorites (Manifest Investing 40 residents).

Sweet 16 (3/1/2009) Results — Ten Years Later. As shown the collective performance of the (16) selections known as “Heavy Hogs” delivered a 21.2% annualized total return. Dividends are included. We can’t help but note the strong performance from the companies at the top of the 10-year-old screening results vs. the achievements of some nearer the bottom. Quality Systems (QSII) morphed into NextGen Healthcare (NXGN). [Editor’s Note: If we’d only listened to Cy Lynch and WellCare Health Plans (WCG) at the time, +44.1%.] Buffalo Wild Wings (BWLD) was acquired by Arby’s after a considerable gain. Navellier Fundamental (NFMAX) evolved into a private wrap offering, results shown are from Navellier fact sheet (https://navellier.com/files/3815/4964/8534/fundamental-a-factsheet.pdf).

 

Invest With Your Friends.  The journey can be a most informative, rewarding and entertaining adventure.

 

Start a test drive (trial subscription) at http://www.manifestinvesting.com ($79/year, group discounts for club partners and educators) and participate in the next ten years of going “Hog Wild.”

Questions?

Contact Mark Robertson via markr@manifestinvesting.com or via Twitter by reaching out to @manifestinvest.  Manifest Investing also maintains a “slipstream blog” at Facebook: https://www.facebook.com/manifestinvesting/  Comments and inquiries welcome.

 

A Harangue of Hoopla

This column appeared in Better Investing magazine nearly 20 years ago. The only time I now trim my eyebrows is when my wife threatens me.

1998. Paraphrasing a great statesman, “It was a year like all years, filled with events that shape and illuminate our times.” It’s so true. In some ways this one was different, but in many others, the same.

One difference was thanks to the recent space mission, our 12-year-old daughter has now seen Mr. Cronkite, and she now knows who he is. Our 8-year-old observed that he seems to be a “nice, smart man, but he needs to trim his eyebrows.” We gently reminded him to be polite and offered some photos of Albert Einstein. During an afternoon at the Ford Automotive Museum, we discovered that the more “famous” of the Fords was Henry, not the Harrison variety that the kids seem to know better. The kids (and adults) were treated to stories of innovation about the real Mr. Ford and his relationship with Thomas Edison. Alex, in noticing Mr. Edison’s “bad hair day” in a photo, combined with the Einstein photo, and Walter’s eyebrows, decided to muss his hair to see if it stirred his imagination. I’d submit that it already had.

As this issue went to press, we appeared to be headed for another strong annual performance result. 1998 had its moments, including the July-August sell-off which quickly reminded many that these things do happen. Interestingly enough, the September-to-November rebound may have inhibited the message a little. Although far from a market call, we might observe that third and fourth quarter earnings results continue to weaken. If this trend continues, it would be easy to build a case for some tough days ahead.

There are risks associated with investing in stocks. Recent exuberance sometimes makes this message a little hard to deliver. But in 1998, as in every year, one of our core messages is to encourage investors to stay the course, no matter what tomorrow brings. The greater risk, to us, is that of NOT being involved.

The Wall Street Journal caused a bad hair day for the NAIC last week, followed by legions of syndicated translations nationwide in the days that followed. The Chicago Tribune decided that their own interpretation was “Join an Investment Club? No Thanks!”

We might suggest two themes for your consideration. The first is that it’s possible that, once again, the message delivered misses the point. See “Our Editor’s Reaction” below.

The second is that it’s time to extinguish some of the mystery. NAIC investors are extremely successful, so much so that we’ll continually be challenged by those untouched by our community and experience. It’s time for a factual debate and apples vs. apples comparisons. In the months ahead, we’ll look to explore the facts and share them with you.

The annual performance of growth mutual fund managers is commonly cited. We read that 5, 10, 20 and in rare cases, 30 or 40 percent of funds exceed the S&P 500 in a given year. The NAIC has conducted surveys, going back decades, that measure performance, using lifetime statistics and a more stringent comparison, as we assess performance. Placing mutual funds under a multiyear microscope, here’s a chilling statistic. From a sample of 3,637 funds, regardless of type, 18 or 0.5 percent (that’s 1-in-200, folks) outperformed the S&RP 500 over the last five years.

It’s time to explore our fascinating track record and Great Expectations going forward. As for our eight year old, Alex, I doubt that he’ll ever trim his eyebrows.

The NAIC wishes a most jubilant and safe holiday season, to you and your family.

Timeless Perspective From Omaha

A number of Manifest Investing community participants have recently forwarded this message to investment club partners, friends and family.  It’s a timeless reminder from 2008-2009, Warren Buffett … and we doubled down on it recently.

The following was excerpted from Bloomberg (11/21/2008):

Billionaire Warren Buffett’s Berkshire Hathaway Inc. slumped 32 percent last year, the worst performance in more than three decades, as the U.S. recession forced down the value of the firm’s equity holdings and derivative bets.

Most of the stock decline happened in the last three months as Berkshire posted a fourth straight profit drop amid sagging insurance results. The company still beat the 38% tumble of the S500, the 14th year in 20 that Buffett outperformed the benchmark. Just six of 1,591 (0.37%) U.S. stock mutual funds with at least $250 million in assets made money for investors last year, according to data compiled by Bloomberg.

“In 2008, there was nowhere to hide,” said Guy Spier, chief investment officer at Aquamarine Capital Management, which holds shares in the Omaha, Nebraska-based company. “Berkshire can’t escape the general fate of American businesses. What Buffett tries to do is ensure that Berkshire Hathaway does less badly than other companies.”

Buffett built Berkshire over four decades from a failing textile maker into a $150 billion company by buying out-of-favor stocks and businesses whose management he deemed superior.

Buffett Not Concerned

The stock plunge “doesn’t make any difference,” Buffett told Fox Business Network Nov. 21.

“It’s happened to me three other times,” Buffett said. “It happened when it went from 90 to 40 back in 1974, and it happened in 1987. It went down 50 percent in 1998-to-2000. I mean, I hope I live long enough so it happens a couple more times.”

=End of Excerpt=

It’s a perspective that has led to 20% annualized returns over multiple decades. Ignore it only if you’re willing to settle for a dimmer future.

Mark Robertson

Brkvsp5002008

I recently watched a 10-year retrospective on the financial crisis of 2007-2009.

Do you remember Buffett’s reaction to one of the most challenging market moments of his lifetime?

Answer: I hope I live long enough to experience a couple more of these.

Perspective matters.

Here’s what Warren Buffett says to do when the market tanks (CNBC, 10/10/2018)

“Don’t watch the market closely,” he advised those worried about their retirement savings at the time. “If they’re trying to buy and sell stocks, and worry when they go down a little bit … and think they should maybe sell them when they go up, they’re not going to have very good results.”

… he recommends investors “get ice cream with their kids and say hi to a friend they haven’t spoken with in a while.”

 

And he’d appreciate it if you’d find the nearest Dairy Queen for the occasion.

Stocks, NOT Markets, For Success

Some words from Better Investing editor Don Danko and his editorial advisory team back in October 1991 …

It’s Stocks, Not Markets, That Bring Investment Success

When investors gather in Chicago later this month for NAIC’s annual Congress, it will be the 41st consecutive year that members will have come together to learn more about common stock investing.

Forty-one years. That’s quite a stretch of time. For many in the NAIC family, the members who have attended these meetings over the years represent at least two generations, in some cases even more. And those four decades of time also have involved all types of economic activity and all kinds of stock markets.

Some have been quite memorable. Like 1987 in Detroit. The Congress took place Oct. 14 -17 that year, literally on the heels of the market’s biggest plunge ever. In fact, the dive started on Friday, Oct. 16, with a collapse of more than 100 points in the Dow Jones Industrial Average while investors were attending seminars and touring the corporate exhibit area. That day they experienced the largest one-day drop in market history, a record that was not to stand very long. On Oct. 19, Black Monday, the market fell another 508 points.

Two years later, on Oct. 13, 1989 (yes, it was a Friday the 13th), the market took a huge plunge again while NAIC investors were holding their annual meeting in Minneapolis. The fall was not as severe as in 1987, but it was large enough (190 points, with most of it in the final hour of trading) to bring on the usual flurry of media reports and interviews suggesting that the sky may be falling.

Yet the surprising thing to many observers, in truth even a bit unbelievable to some, was the fact that Congress-goers didn’t seem to be too concerned about losing money or deciding when and what to sell. Yes, they had a keen interest in following what was happening in the market. And, yes, what was happening did have an effect on the value of their holdings. But the focus of most every investor we met with at both Congresses was on what and when to buy instead of what and when to sell.

What Wall Street was reporting as gloom and doom, our members were viewing as an opportunity to bargain shop.

We don’t intend to make light of bear markets. They are real and they hurt people. Some are hurt because they are forced to sell shares at low prices to meet financial needs. Others because the fear of even greater loss is more than they can handle. They didn’t expect this type of loss could happen.

Nevertheless, bear markets, even the fear of bear markets, keep investors from enjoying the benefits a program of regular investing can bring. Bear markets drive people away from equity investing. People get no enjoyment in watching the prices of stocks that they have been patiently buying, sometimes for years, fall below the price they paid. That’s not their idea of something to celebrate.

Over the past four decades, if there has been one single conclusion that we have come to, based on the experiences of thousands of Americans throughout the nation, it’s that it is important to stay in the market and continue a program of regular investing in order to build wealth. That simply is the best way that wealth is created.

To do that requires three key ingredients: 1) A focus on the long term. (Don’t be derailed by pressure to think and act short term.) 2) A discipline to apply in building and managing a portfolio. 3) Patience to persevere. (This is where clubs and other individuals who share similar goals can provide invaluable support.) It’s hard to say which ingredient is the toughest. They are all important and success depends on being able to blend all three into your own personal program of investing.

There are times when bears frolic in financial markets, and other times when the dancing is done by the bulls. But in order for most investors to build their wealth and fund their lifelong dreams, they need to dance to a different drummer.

We believe very strongly that the words to the tune that drummer is playing go like this: There is little in today’s news that has a bearing on the wealth an individual can accumulate over his or her lifetime. Money can be made in all types of markets, if the focus is long term. It’s stocks, not markets, that bring investment success.

The Rest of the Story: Wasted Wish?

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!

Fribbles: Mother’s Day Tribute

Motley Fool Fribbles

A Mother’s Day Tribute

by Mark Robertson (May 8, 1998)

In the early days of the Motley Fool kingdom, Selena Maranjian presided over an oasis known as Fribbles — tales about life and investing. This morning I was reminded that some things on the Internet are less permanent as access to some of these pages is no longer supported. However, via the magic that is Google, the content has been preserved in a cache making it possible to revisit, recapture, re-present and rekindle the moment.

After the past few weeks of tax season, it’s time to get back to what’s really important. For me, one of the most important resources and inspirations that I’ll always have, no matter what the future holds, is my mother.

Her outlook on investing and personal responsibility is one that you might carefully consider, applying the attributes as appropriate to your personal situation.

She raised four children in the grass-roots, meat-and-potatoes railroad junction in the prairie known as Savanna, Illinois. Until recently, we could proudly proclaim that we were without a stoplight in the entire county. In Savanna, the hard-working natives never needed a stoplight to tell them when to stop and go.

Dad is the greens keeper at the local golf course near their home. One of the highlights of a visit to Grandma’s house is the opportunity for Mom’s grand kids to drive Dad’s golf cart about the neighborhood. It’s a rural setting, but it’s charming to see Mom and Dad still nurturing responsibility as they hand over the keys to the cart to the grandchildren, some of them small enough to make most people squeamish with the prospect of them behind the wheel.

Mom’s two daughters became nurses; the youngest of them is a tenaciously Foolish saver, something that I wish had rubbed off a little more on me over the years. The older sister, while usually exercising good judgment is a Chicago Bears fan — a rabid one. ‘Nuff said, she’s usually pretty rational.

My brother is among the hardest working individuals that I’ve ever seen. I keep one of his recognition certificates on the wall of my office to remind me to try to work at least half as hard as he does.

I was educated as an engineer, and have recently worked with the National Association of Investors Corp. (NAIC) in the realm of investor education. Fervent Fools recognize the NAIC as the sponsoring organization of investment clubs and individual investors. The NAIC is committed to the education of individual investors, with a particularly Foolish message: “With some effort, anybody can take control of his or her personal investments… and achieve outstanding results.”

Consider handing over the keys to investing to the young people around you. Mom’s influence would suggest that it’s important to provide our youngsters and the young-at-heart in our lives with the challenges, responsibilities, and opportunities to achieve Foolish success. [Editor’s note: Start by pointing them to our Young Fools area!]

I believe that our existing educational system is bereft of opportunities to learn the fundamentals of personal investing. This gap, and its impact, is massive, and it’s sad that many of our financial institutions basically promote ignorance. They constantly remind us how challenging it is to understand and participate in the management of our own financial future. It’s part of the boom behind the mutual fund rush. (Let a professional do it for you. After all, you wouldn’t perform brain surgery or a root canal on yourself.)

Mom is an avid reader, consuming a few books every week along with a plethora of magazines and the local news. Unlike most Americans, judging from the explosion of movie theaters around us, she rarely goes to movies. Why? It’s not about exorbitant costs. She once told me that it was much simpler than that. She reads lots of books, many of which go on to reach the silver screen. The problem is, that in her experience, “nobody can quite make a movie like I make a movie as I turn the pages. Sure, every once in a while Spielberg (Jaws, Close Encounters) or Michael Crichton (Jurassic Park, E.R.) come close, but it doesn’t happen very often. Imagination is a powerful force, and the best of the best have trouble keeping up.”

It’s a small jump from Mom’s wisdom to taking personal responsibility for our personal investing efforts.

Thanks, Mom!