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

Groundhog Challenge: 2013 Results

Groundhog Challenge VII: Final Results (2013)

We’ll be reviewing the final results of the 2013 Groundhog Challenge and celebrating the achievements of the Broad Assets investment club of St. Louis, our group champions for the second year in a row and the king-of-the-hill finish by our friend, Andy Pagorek of Chicago, our individual champion for 2013.

Andy felt pretty good about his total return greater than 80% for 2013, until he saw the St. Louis group come in at over 110% for the annual contest. In a note he sent to me several weeks ago, he applauded the St. Louis gang for their repeat performance, acknowledging them in his perpetual quest for effective and successful long-term investing methods.

Join us for a FREE webcast where we’ll explore what worked and how our collective Groundhog Nation performed versus some celebrity rhinos. What didn’t work so well? Well, if confession is good for the soul, we’ll be visiting my selections that narrowly avoided finishing in last place for 2013. (In case you’re worried, I’m still near the top of the all-time leader board.)

Time: 10:30 AM ET (February 1)

Registration: http://www.manifestinvesting.com/events/142-a-few-moments-with-groundhog-nation-february-1-2014

Groundhog VIII: Join our next ‘Iditarod’

Entries from individual investors and groups (clubs) currently being accepted via the MANIFEST Forum and/or email to: manifest@manifestinvesting.com.

There aren’t many rules.  Participants select a minimum of five (5) stocks with a maximum of (20).  Selections are distributed in $1,000,000 based on stock prices on February 2, 2014. (1/31/2014)  The winner is the highest value on February 2, 2015.  An individual champion and group champion is crowned each year and all-time performance is also in focus.  (We have seven years under our belts now.)

Groundhog Challenge VIII (2014)

Bring out your best.

Groundhog VII (2013 edition) comes to an end on February 2, 2014. we have seen a number of photo finishes over the years in our annual stock selection challenge.

This will not be one of those years.Last year’s group champion, The Broad Assets investment club of St. Louis has dusted the field — and barring calamity and collapse at a couple of their key positions during January — currently has a 111% total return for 2013. (That’s NOT a typo) In similar fashion, Andy Pagorek of Chicago is up 82% for the individual championship. More on them to follow in the February newsletter.

For now, it’s time to start your Groundhog shopping for 2014. $1,000,000 is evenly invested in 5-20 stocks (or funds) on 2/2/2014 and we stand back and watch the selections grow for the next 52 weeks until the 2/2/2015 finish line. Five selections is the minimum … and yes, dividends are reinvested. This is a total return contest.

Individuals and groups are encouraged to join the fray. Discuss it during your January club meeting and either post your 2014 entry in the MANIFEST forum under the Groundhog Challenge or submit selections to markr@manifestinvesting.com BEFORE February 2, 2014.