Thursday, June 10, 2010

September 2009 Update

For the Fiscal Year ending September 30th, 2009 the Model Portfolio’s return was -3.9% vs. S&P 500’s total return of -9.4%. Since inception, the Model Portfolio's 4-year return through September 30th, 2009 is 16.5% vs. S&P 500's total return of -13.9%. To perhaps put Mr. Market's recovery from the spectacular slump in late 2008 and early 2009 in better perspective, consider that the Model Portfolio's return from January 1, 2009 through September 30, 2009 was 31% vs. S&P 500’s total return of 17%.

After a flurry of activity in November 2008, we remained on the sidelines for the remainder of the Fiscal Year notwithstanding a few small trades in August and September 2009. Many of the stocks we purchased in November could have been had at significantly lower prices in March 2010 but hindsight is of course 20/20. Still we managed to purchase high quality companies at a fraction of their intrinsic values. The analogy of feeling like a kid in a candy store could not have been more appropriate in November 2008. We added new positions by buying shares of Starbucks (Nasdaq: SBUX) and Goldman Sachs (NYSE: GS) and increased our holdings in Ebay (Nasdaq: EBAY), Intel (Nasdaq: INTC), Cisco (Nasdaq: CSCO) and Sears Holdings (Nasdaq: SHLD) among others at incredible prices.

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