As the stock market quickly gave up most of its gains of this
year since the beginning of May, GuruFocus model portfolio of
Buffett-Munger strategy shows great resilience. Up to the market
close today, Buffett-Munger model portfolio gained 8.8% year to
date, outperforming the S&P 500 by 5%.
GuruFocus monitors the performances of four value strategies.
Their performances are updated daily in
the value ideas page
. As of this year,
Undervalue Predictable Companies
portfolio lost 3%, underperforming the market by 6.8%. The
historical low P/S portfolio
historical P/B portfolio
are slightly better than the S&P 500. Since inception, all
model portfolios outperformed the S&P 500.
Among all value strategies, Buffett-Munger strategy has shown
very consistent performance. It has beaten the S&P 500 every
year since incepted in Jan. 2009, outperforming by 32.7%
cumulatively. As a comparison, the Undervalue Predictable
Companies has similar overall outperformance so far. But the
portfolio has higher volatility. By the end of April, the
portfolio has doubled since Jan. 2012. It has since given up some
of its gains.
Buffett-Munger strategy invests in companies with high
Predictability Rank, but carries no extra debt while growing, and
can maintain or even expand its profit margin over time. We
believe that these are the companies that younger Warren Buffett
would buy. These companies' competitive advantages can keep it
from margin decline over time. They are traded at reasonable
valuations. You can check out the current list of stocks in the
screen here. The high quality and reasonable valuation helped
reduced the stock declines during market downturns. These are the
companies you want to buy and hold forever.
For one time this year, the Buffett-Munger strategy
underperformed the S&P 500 slightly as the market runs up
quickly. But since the market decline started in May, by holding
companies such as Wal-Mart (
), Factset (
), Waters (
), the portfolio has withstand the market storm well.
You can check out the details of the Buffett-Munger portfolio
here.About GuruFocus: GuruFocus.com tracks the stocks picks and
portfolio holdings of the world's best investors. This value
investing site offers stock screeners and valuation tools. And
publishes daily articles tracking the latest moves of the world's
best investors. GuruFocus also provides promising stock ideas in
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