2012 Performance Review

Below is a chart of how our investment portfolio performed against the S&P 500 index and the 30-year Treasury based on the January 3, 2012 rate (found here).

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Our portfolio exceeded the guaranteed rate (30-yr treasury) by almost double.  However, the S&P 500 exceeded our 2012 return by more than double.

Below is the cumulative performance of our investment strategy since 2006 when we codified our investment approach in the last quarter of 2005.  We have compared our performance to the indexes indicated, based on $10,000 invested over the subsequent period of time.

Year Dow Indu.  $ 10,000.00 S&P 500  $ 10,000.00 Nasdaq  $ 10,000.00 NLO Portfolio  $ 10,000.00
2006 16.29%  $ 11,629.00 15.74%  $ 11,574.00 9.52%  $ 10,952.00 18.30%  $ 11,830.00
2007 6.43%  $ 12,376.74 5.46%  $ 12,205.94 9.81%  $ 12,026.39 19.80%  $ 14,172.34
2008 -33.84%  $   8,188.45 -37.22%  $   7,662.89 -40.54%  $   7,150.89 14.35%  $ 16,206.07
2009 18.82%  $   9,729.52 27.11%  $   9,740.30 43.89%  $ 10,289.42 36.65%  $ 22,145.60
2010 11.02%  $ 10,801.71 14.32%  $ 11,135.11 16.91%  $ 12,029.36 7.14%  $ 23,726.79
2011 5.53%  $ 11,399.05 0.00%  $ 11,135.11 -1.80%  $ 11,812.83 6.20%  $ 25,197.85
2012 7.26%  $ 12,226.62 16.20%  $ 12,939.00 15.91%  $ 13,692.25 7.80%  $ 27,163.28

6 responses to “2012 Performance Review

  1. Oh wow, your perforamnce is pitiful. Get off the internet and stay off. No one needs to know about your crap results.

    • Greetings Greg,

      Thank you for your interest in our work. We agree that our performance was pitiful this year when compared to the S&P 500 index. Falling short of the index by half is nothing to be proud of.

      However, as Dow Theorists we like to compare our performance against the Dow Jones Industrial Average. In this regard we have exceeded the returns of the Industrials 6 out 7 years. Our concentrated portfolio most resembles the Dow Industrials rather than the S&P 500. However, whenever possible, we’d like to exceed to the returns of the most widely tracked index.

      As you will notice, in the 7 full years that we’ve compared our performance against the major indexes the Dow Industrials have “averaged” +4.50%, the S&P 500 has “averaged” +5.94% and Nasdaq Composite has “averaged” +7.67%. Our “average” annual return has been +15.75% over the same period of time.

      Again, we’ve prominently compared our performance against the S&P 500 because it is a popular benchmark that most would accept. With half our portfolio in cash for most of 2012, saved for the month of December, we’re not surprised about the overall performance.

      Keep in mind that our priority is to avoid consecutive annual losses and exceed the gains of guaranteed alternatives.

      Regards.

  2. To Greg I would say one year is much too short a timeframe to pass judgement on a strategy. NLO’s seven year performance has been outstanding and would probably place it in the top 1% of professional money managers.

    To NLO, I thank you for posting your results, whether they be good, mediocre, or poor.

  3. actually, Greg, this is phenomenal performance – 7 years of positive returns, including 2008, with a long only approach. and no down years!

    however, i am wondering if the methodology will allow this streak to continue. the process as i understand it is to buy stocks at their lows, hold them for a significant gain, and then sell a portion of the position but retain some % of original principal in the investment. won’t the portfolio eventually have such a large percentage of these residual holdings that the incremental effect on returns from the new positions will be overwhelmed?

  4. actually, Greg, this is phenomenal performance. 7 years, long only portfolio, without a down year – including 2008. and annualized returns over that period of double the S&P.

    my understanding of the portfolio management technique is to sell just the profitable portion of winning trades. won’t the residual positions eventually overwhelm the anticipated contribution to returns from new purchases?