Sunday, January 12, 2014

2013 Summary

Alright folks, 2013 is over and 2014 is underway.  Frankly, I'm not sure what to think about last year's performance.  On the one hand, my absolute returns were decent, and that's despite my very conservative cash position.  On the other hand, I under performed the S&P, which is never a good thing.

Speaking of the S&P, it was up an astounding 32.3% last year!  On a percentage basis, that's better than the bounce we saw in 2009 (which was only 30.4%).  In fact, this is the market's single best year since I began investing (which was 8 years ago).  And, on top of all that, this is the 5th straight year market's been up.

So where does this leave us?  Well frankly, as a value investor, this has all been a bit frustrating.  After all, the more "stretched" valuations become, the more difficult it is to find companies trading at a discount to their intrinsic value.  In fact, right now the most compelling opportunities are the ones that have something "wrong" with them (like Sears and Strayer).  If companies like these can be "fixed," the payoff can be huge, but there's execution risk...

Anyway, here's the summary:
  • I started the year with $213,090 and finished with $267,482.  Since I didn't deposit or withdraw any money, this increase is straight appreciation.
  • In percentage terms, my portfolio was up 25.5% in 2013, whereas the Hypothetical S&P appreciated 32.3%. 
And here are the exhibits (8 year performance summary, waterfall graphs, holdings summary, and quarter-to-quarter bridge, click to enlarge):

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