Groundhog Challenge (2019 Results)

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!

Groundhog 2020: The Battle Resumes

Battle? Yes, our 14th annual “battle.” The battle is part of our continuing demonstration that it is possible to humble the total stock market. And it’s more fun when we do it together. As we tally the 2019 results, please submit your 2020 entries. Good Hunting and Good Luck!

Groundhog Challenge XIV (2020)

We hold certain truths to be self-evident.

That most of us like to sleep at night.

That most of us believe in Occam’s Razor.

That “patience is genius in disguise.” — Hugh McManus

Most of us marvel at the performance of a relatively-passive model portfolio like our Bare Naked Million

We also pay homage to a few selected Rhinos. (Past winners have included Eddy Elfenbein, Abby Jo Cohen (Goldman Sachs), David Einhorn and Warren Buffett.) Some are included just for fun … it’s like playing against the “house.” #BeatJimCramer

We’ll keep it simple (again) for Groundhog XIV (2020).

Rules of Engagement

1. Enter by selecting a minimum of five (5) investments and a maximum of twenty (20) positions.

2. Participants will receive $1,000,000 in Groundhog dollars. The cool million will be divided evenly across the number of positions you decide to use. In other words, if you pick (5) stocks … we’ll divide the $1,000,000 evenly, creating a public dashboard with $200,000 each. If you submit (8) stocks, it’s $125,000 each.

3. Participants may submit entries as individuals and/or group (clubs).

4. No transactions will be permitted between February 3, 2020 and February 2, 2021.

5. Entries can be made between now and then and will be accepted until the market opens on Monday, February 3 at 9:30 AM ET.

Entries can be submitted by emailing markr@manifestinvesting.com or by posting here in the Groundhog Challenge forum folder.

Special Consideration. We will grant an exemption (an extension) to any group (investment club) that enters the fray during the month of February.

6. Stocks under $1 not permitted.

This is a total return contest — the influence of dividends is accounted for.

Who: The few. The proud. The brave. Bring your best ideas — club and individuals.

Crowning Groundhogs (2018)

This Week at MANIFEST (2/8/2019)

“A group of investors heeding the lessons of Graham, Babson and Nicholson has at least one leg up on the crowd and a better than average opportunity to generate exceptional returns.” — Our Groundhog Creed.

Super Performances

The Super Bowl is on Sunday.

Sorry Patriots fans, but if you care about the 2019 stock market, the only thing standing between you and the oblivion of an “old AFL team” winning the Super Bowl and poking the restless bear, the accompanying image of a focused Ram is it. Go Rams!

And that’s the second most important thing going down this weekend.

Our courageous band of Groundhogs have finished another revolution around the sun, the twelfth such rendition — and we’ll be crowning another repeat champion, Anna Gombar of Holly, Michigan.

Inviting Anna Gombar (and her husband Rod) to a stock selection contest is like inviting Tom Brady to a football tournament.

The results are in and the accounting team is crunching numbers, munching pizza and chugging adult beverages in the conference to compile the final results. Spoiler alert: They’re outstanding. Again. (I hope) No, we expect.

Back To The Super Bowl And All Things Commercial

What have been your favorites over the years? The Coca-Cola ad ranks as one of the best of all time. The Apple commercial is epic. And Budweiser consistently hits it out of the park with the gorgeous Clydesdales. But the E*Trade babies and the CareerBuilder Monkeys are legendary.

But — to us (particularly in Michigan) — the Eminem commercial by Chrysler stands out among the best. Ever.

The S&P’s 7.9% Advance Marked Its Best Start To The Year Since 1987

Sharp Rebound. The S&P 500 had it’s best month in three years following December’s slump. Hard to think of the market gyrations over the last four months as anything but a YoYo “Walk-The-Dog” market.

MANIFEST 40 Updates

  • 2. Cognizant Technology (CTSH)
  • 4. Microsoft (MSFT)
  • 12. Alphabet/Google (GOOG)
  • 19. Visa (V)
  • 27. Oracle (ORCL)
  • 28. Wells Fargo (WFC)
  • 36. T. Rowe Price (TROW)

Round Table Stocks

  • Amazon (AMZN)
  • Baidu (BIDU)
  • Booking.com (BKNG)
  • Cognizant Technology (CTSH)
  • eBay (EBAY)
  • EPAM Systems (EPAM)
  • FleetCor (FLT)
  • Global Payments (GPN)
  • Infosys Tech (INFY)
  • Microsoft (MSFT)
  • PayPal (PYPL)
  • SEI Investments (SEIC)
  • T. Rowe Price (TROW)
  • Western Union (WU)

Best Small Companies (2019 Dashboard)

The status of the 2019 Best Small Companies can be tracked at: https://www.manifestinvesting.com/dashboards/public/best-small-2019

Investing Round Table Sessions (Video Archives)

Turnout Tuesday Educational Sessions

Results, Remarks & References

Companies of Interest: Value Line (2/8/2019)

The median Value Line low total return forecast for the companies in this week’s update batch is 5.7% vs. 7.7% for the Value Line 1700 ($VLE).

Materially Stronger: Fiserv (FISV)

Materially Weaker: Sohu.com (SOHU), Ameriprise (AMP), SEI Investments (SEIC), BlackRock (BLK), Ctrip.com (CTRP), GroupOn (GRPN), Capital One (COF), Ansys (ANSS)

Discontinued:

Market Barometers

The thing very few people tell you about “overvalued” markets is that, occasionally, the fundamentals arrive to justify them. — Joshua Brown

Value Line Low Total Return (VLLTR) Forecast. The long-term low total return forecast for the 1700 companies featured in the Value Line Investment Survey is 7.7%, decreasing from 7.7% last week. For context, this indicator has ranged from low single digits (when stocks are generally overvalued) to approximately 20% when stocks are in the teeth of bear markets like 2008-2009.

Groundhog Challenge 2019

Gh invite 20190130

Groundhog Challenge XI (2017)

At Manifest Investing, we’ve held a stock selection challenge for the last ten years. Participants are encouraged to choose 5-20 stocks for a static portfolio, much in the spirit of Crossing Wall Street’s Eddy Elfenbein.  Where you might expect some “gun slinging” and swinging for the fences, the combatants are actually well-behaved and carefully deploy a long term perspective with a dash of speculation and adventure.  The overall performance has often topped market averages and lessons have been extracted.  If you would like to participate with this year’s field, send stock picks to markr@manifestinvesting.com or join the league at http://wallstreetsurvivor.com/league/GroundhogChallenge2017

Groundhog Challenge XI (2017)

We hold certain truths to be self-evident.

That most of us like to sleep at night.

That most of us believe in Occam’s Razor.

That “patience is genius in disguise.” — Hugh McManus

Most of us marvel at the performance of a relatively-passive model portfolio like our Bare Naked Million

We also pay homage to a few selected Rhinos. (Past winners have included Eddy Elfenbein, Abby Jo Cohen (Goldman Sachs), David Einhorn and Warren Buffett.) Some are included just for fun … it’s like playing against the “house.” #BeatJimCramer

Therefore, we’ll keep it simple (again) for Groundhog XI (2017) but with a slight experimental twist and invitation.

1. Enter by selecting a minimum of five (5) investments and a maximum of twenty (20) positions.

2. Participants will receive $1,000,000 in Groundhog dollars. The cool million will be divided evenly across the number of positions you decide to use. In other words, if you pick (5) stocks … we’ll divide the $1,000,000 evenly, creating a public dashboard with $200,000 each. If you submit (8) stocks, it’s $125,000 each.

3. Participants may submit entries as individuals and/or group (clubs).

4. No transactions will be permitted between February 2, 2017 and February 2, 2018 — for the MI/Forum-based version of the Groundhog Challenge. (See actively managed virtual portfolio alternative below.)

5. Entries can be made all weekend and will be accepted until the market opens on Tuesday, February 7 at 9:30 AM ET.

Entries can be submitted by emailing markr@manifestinvesting.com or by posting here in the Groundhog Challenge forum folder.

6. Stocks under $1 not permitted.

This is a total return contest — the influence of dividends is accounted for.

New For 2017

We have been invited by www.wallstreetsurvivor.com to host a stock contest using their virtual portfolio. Groundhoggers may make their “static” entry in the traditional field kept by Manifest Investing and also enter and maintain a challenger at Wall Street Survivor. I plan to have an entry on both platforms,

Where: www.wallstreetsurvivor.com/league/GroundhogChallenge2017

What: Create an account. Locate the Groundhog Challenge “league”. You will receive $1,000,000 on Groundhog Day (Thursday, Feb 2) and can make your own transactions all year long.

Why: It’s an opportunity to test “passive” vs. “active” for some. For others, experiment with options, short selling and other “non-core” tactics.

Who: The few. The proud. The brave. Bring your best ideas — club and individuals.

There will be transaction costs for the Survivor league. More activity would be more expensive.

20 Consensus Stock Selections

Here are the consensus selections from the participants in our annual stock picking contest — Groundhog X (2016) … twenty pretty good stock studies that could be worthy of a closer look.

The tracking dashboard can be accessed here: https://www.manifestinvesting.com/dashboards/public/heavy-hogs-2016

Heavy hogs dash 20160205

Growth: Top line growth forecast.  Projected P/E: Long term P/E ratio.  Projected Yield: Long term “average” dividend yield.  Financial Strength: Consensus ranking based on Value Line, Morningstar, S&P and debt quality considerations.  EPS Stability: Relative variability of EPS trend (2009-2019).  Quality: Percentile ranking based on financial strength, EPS stability and relative growth & profitability.  PAR: Projected Annual Return for long term return forecast.

This Is How We Do (2014 Results)

For those of you who watched the Super Bowl (and those of you who watch the commercials and halftime show), recall that Katy Perry rode into the stadium for the halftime extravaganza on a huge lion, singing about roaring like a champion?

One of her hit songs is entitled, This Is How We Do.

This is how we do… yeah, chilling, laid back
Straight stuntin’ ya we do it like that

I didn’t know what “stuntin” actually referred to but based on this urban dictionary rendition, we think it applies to all things Groundhog. Hugh McManus of Pasadena and the Serious Investment Club of Pittsburgh are the latest in a long line of stuntin legacy — taking home top honors for Groundhog Challenge VIII in the individual and group categories.

Collectively, we “chill, lay back” and select a basket of 5-20 stocks that will go unchanged over the course of the Groundhog Calendar. Over the years, we’ve noticed very little swinging for the fences. A few participants will try to isolate a promising deep value situation with a potential catalyst that could deliver over the course of a year. But for the most part, the participants select high-quality stocks that would be suitable for the long term, a time horizon measured in years, if not decades.

Gh returns 20150202r
We kick off this performance results summary with a look at the collective performance over eight years where the average annualized return is 10.0% during a period when the Wilshire 5000 delivered 6.6% annualized returns.

Straight stuntin’ indeed.

The following table presents the leader board at the conclusion of the 2014 stock picking contest.  $1,000,000 invested on Groundhog Day (2/2/2014) became what is displayed here.

All-Time Results: Honor Roll

Heavy Hogs (2014): Invest With Your Friends

Heavy Hogs (2014)

The Groundhog Challenge is our 9-year running stock picking contest that runs from Groundhog Day to Groundhog Day.  The results over the years have been pretty special and we’ll be back soon with the 2014 finish line results. The “Heavy Hogs” is the annual tracking portfolio for the consensus favorites.

The overall results for Groundhog VIII (2014) were … for lack of a better word, a little stinky. (I have high expectations and you’ll see why when we report the comprehensive results)

Collectively, we stumbled to multi-year lows for relative return and accuracy.

Not all of us were blessed with the luck of the Irish like Mr. McManus, so it probably makes sense to remind ourselves that there seems to be better performance in “numbers.”

As of 2/1/2015, 10-of-the-20 (50%) most frequently chosen stocks by 2014 Groundhoggers had outperformed the general stock market over the annual contest – racking up an average return of 18.1% (+3.9% RR) led by Apple (69.4%)

When nobody else is selecting that hidden gem you’ve identified, be careful. Confirm your assumptions. And when legions of our your friends hold their nose at your selection (think BODY) — you might be right, but ignore them at your peril. It’s also worth noting that there’s no escape hatch in this contest version. You’re stuck with the selections made in early February for 52 weeks until Punxsy Phil stirs again.

Don’t get me wrong. This lack of an escape hatch is often a virtue. We generally believe that hyperactivity in “investing” is erosive and history rhymes with us.

But when the consensus selections outperform the vast majority of hundreds of participants, it’s probably worth heeding the group. Investing with your friends can be a very good idea.

Heavy hogs 2014 20150202