Beating The Market

Groundhog Challenge (2019 Results)

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This Week at MANIFEST (2/7/2020)

“Patience is genius in disguise.” — Hugh McManus

“The function of education is to teach one to think intensively and to think critically. Intelligence plus character – that is the goal of true education.” — Dr. Martin Luther King, Jr.

Dateline: 02/02/2020. Yep, it’s a Groundhog Day palindrome — a numerical formation that hasn’t happened for 907 years.

  • This week’s update includes that Value Line Investment Survey Issue No. 13 plethora of community favorites.
  • Our cracker jack team of accountants have been spending more time eating pizza, swilling adult beverages and lighting cigars with greenbacks than crunching Groundhog Data thanks to the YCharts data.
  • When the stock that dominates Groundhog portfolios, Ardelyx (ARDX), has a positive final day of the Groundhog season while the market suffers one of its worst daily declines in years — the standings get disrupted. Newcomer Kurtis Sears still took home the individual honors but surrendered the top of the overall leader board to a rogue band of knights.
  • And yes, if you believe in the Super Bowl indicator, you’re hoping the San Francisco 49ers pan some gold. As of January 2020, the indicator has been correct 40 out of 53 times, as measured by the S&P 500 Index – a success rate of 75%. Sorry, Mahomes and Kansas City …

HAPPY GROUNDHOG DAY, EVERYBODY!

  • The average annual total return for Groundhog Challenge participants over the last 13 years is 13.9%. The benchmark Wilshire 5000 has gained 8.8% over that time frame.
  • The total return for the WIlshire 5000 (VTSMX) during Groundhog XIII was 17.9%.
  • The overall performance leaders for Groundhog Challenge XIII (2019) and winners of the “institutional” category are our Round Table Knights (Mark Robertson, Cy Lynch, Hugh McManus and Ken Kavula.) The stocks (including the aforementioned Ardelyx) chosen by the knights netted a total return for the 1-year contest of 67.8%. If you’re not familiar with our monthly FREE webcasts, you should be. You can register for the February 25th (8 PM ET) here. Second place in the institutional category went to the Motley Fool — with their relative new ETF (TMFC) checking in at 30.1%. An honorable third place among the institutions went to Abby Jo Cohen at 29.5%. After a few really rough years on the Barron’s Round Table, it’s good to see Abby among the honorable mentions.

  • The individual championship went to Kurtis Sears (pictured here, with family) of Oklahoma. Kurtis had a considerable lead going into the final day — but the 1-day down draft in the general market combined with a positive day for ARDX turned the tables. Kurtis is a newcomer and bolted out of the starting gate with a 66.7% result for the 2019 contest. 2-time Individual Champion Hugh McManus checked in at second place with a 62.1% total return. Third place for individual honors went to Gail Goldstein at 51.4%. In Gail’s own words, “Thanks so much for the gift of bragging rights after coming in 3rd place in the annual Groundhog Challenge. I’m 81 years old and only started investing on my own about 15 years ago. It reminds me of the time when shortly after I taking up golf, I accidentally (seriously) sunk at 80 foot putt.” Gail clearly gets it. There are few things more important than ending up on the leader board of this Championship of the CIVILIZED investing world. Several community citizens turned in solid results including Kaye Light, Barath Arianayagipuram (top of the leader board for most of 2019), Marty Eckerle, Nick DiVirglio, Petra Linden and Ruth Wilfong. It was a banner year with a number of Hoggers topping 30% (see below). Good luck in 2020, Gail and everybody …

  • We have it on pretty good authority that the accompanying image on the right accurately reflects the mood and atmosphere at meetings of the Bower City Ladies investment club of Janesville, Wisconsin. Why? Because the Bower City Ladies are the Group Champions for the 2019 campaign — their third championship all-time and second in the last four years! The Janesville ladies join the Broad Assets of St. Louis as 3-time champions. Bower City netted a 38.7% return for the trailing year. I’m thinking we should set up an investing club cage match between St. Louis and Janesville (by the way, Beardstown would be approximately at the epicenter between the two) and do some serious open house stock selection. Second place in the group category went to perennial leader board presence, Herb Lemcool and his grandchildren, the Koolkids of Traverse City, Michigan (36.4%). Third place in the group category went to education stalwart Ken Kavula and his family investment club (31.5%).
  • We mentioned this before and we’ll post the market beaters for 2019 below — but a horde of group entries dominated the 2019 leader board. 40% of individual combatants beat the WIlshire 5000 but 57% of the group entries topped the stock market for Groundhog Challenge XIII.

Bower City Ladies — Janesville, Wisconsin. Sitting (left-to-right) Marcia Neleson, Lavina Kuzuhara, Sue Chwala, Susan Maciolek, Cec Vanderlip, Lesley Hammer, Janet Miller. Standing: Carol Hatch, Beth Drew, Martina Tse, Laura Sykora, Barb Cisler, Mary Anna Greene, Maria Enriques, Laurie March. Missing: Julia Walters, Nancy Presti and Jodee Helland

MANIFEST 40 Updates

  • 2. Cognizant Technology (CTSH)
  • 4. Microsoft (MSFT)
  • 12. Visa (V)
  • 13. Alphabet/Google (GOOG)
  • 28. Oracle (ORCL)
  • 31. Wells Fargo (WFC)
  • 35. T. Rowe Price (TROW)
  • 38. Facebook (FB)

Round Table Stocks

  • Alphabet/Google (GOOG)
  • Amazon (AMZN)
  • Booking (BKNG)
  • Cognizant Technology (CTSH)
  • eBay (EBAY)
  • EPAM Systems (EPAM)
  • Facebook (FB)
  • Fleetcor Technologies (FLT)
  • Global Payments (GPN)
  • Infosys Tech (INFY)
  • Microsoft (MSFT)
  • PayPal (PYPL)
  • T. Rowe Price (TROW)
  • VMWare (VMW)

Best Small Companies (2020 Dashboard)

The status of the 2020 Best Small Companies can be tracked at: https://www.manifestinvesting.com/dashboards/public/best-small-companies-2020

Investing Round Table Sessions (Video Archives)

Investing Topics (Video Archives)

Results, Remarks & References

Groundhog Challenge XIII (2019) … continued …

Here are the 2019 entrants that “beat” the Wilshire 5000 during the trailing 12 months. Congratulations to all of you. Press on!

MANIFEST 40 Update (9/30/2016)

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Our MANIFEST 40 is a celebration of collective excellence in stock selection, strategy and disciplined patience.

“We have always believed that the collective decisions made by our community of long-term investors are worth huddling over … a place where ideas are born.”

The 40 stocks are something of a barometer because we know that these community favorites are not simply followed … most of them are also widely owned, with considerable diligence and vigilance.

The rate of return remains at 8.8% since inception (9/30/2005) vs. 5.8% for matching investments in the Wilshire 5000 for an excess/relative return of +3.0%. We believe that this portends success for many of our subscribers and investors.

MANIFEST 40: September 2016. Performance Results. These are the most widely followed stocks by Manifest Investing subscribers. Current leader Apple (AAPL) was added on 9/24/2009 and steadily climbed the ranks while generating a relative return of +19.1% (annualized). Figures in parentheses are the June 2016 rankings. Tracking dashboard: https://www.manifestinvesting.com/dashboards/public/manifest-40

Quality is still solid at 90 and the overall return forecast is 9.0%, pegged to slightly outperform the Wilshire 5000 or S&P 500. The average sales growth forecast is 6.6%. Again, we’d like to see an emphasis on discovering smaller, faster-growing companies — the focus of our Discovery Club efforts. We miss smaller, less discovered, companies poised to make difference, like Bio-Reference Labs (BRLI) did.

The top performers continue to be Apple (AAPL), Cognizant Technology (CTSH), Starbucks (SBUX), and Home Depot (HD). 57.5% of the decisions have outperformed the market.

Capturing Attention: Charger

CVS Health (CVS) advanced from #34 to #29. We’ve noted that CVS has been ubiquitous on screening results for a while and collectively, you’ve noticed. Fastenal and Microsoft swapped positions in the top 5 but there are no new entries to the 40 this quarter.

The results of $100 invested into any of these positions at the time of addition can be viewed at any time at: https://www.manifestinvesting.com/dashboards/public/manifest-40

We’ll continue to hope that a few promising faster growers will penetrate a future roll call.