2006 SINLetter Model Portfolio Returns

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December 31, 2006 | SIN Picks | | Author Asif

2006 proved to be a spectacular year for many investors and I hope that SINLetter subscribers benefited from the more than 60% returns of the SINLetter model portfolio. The 46% rise in the Bombay Stock Exchange (BSE) certainly contributed to these returns as we held a number of Indian ADRs such as Wipro (WIT), Infosys Technologies (INFY), Tata Motors (TTM) and Sify (SIFY). But the story was not all international stocks and triple digit returns from small-cap stocks like Medifast (MED) and VA Software (LNUX) along with respectable gains from large-caps like Seagate Technologies (STX), ATI Technologies and Safeway (SWY) also contributed to these gains.

While 2006 will be a difficult act to follow, I will continue to look for stocks and strategies that will help us achieve the kind of alpha we have seen since inception, without taking on excessive risk. The returns of the SINLetter model portfolio along with the returns of major indices are tabulated below.

Performance Metric Dow S&P 500 Nasdaq SINLetter
2006 Annual Returns 16.29% 13.38% 13.62% 60.80%
Since Inception (Aug 2005) 17.32% 14.81% 10.02% 83.18%

2006 SINLetter Model Portfolio Returns




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Comments

  1. AF
    January 3rd, 2007

    OK,

    So I am convinced.  If you can do it next year I will send you $30K and see what returns you can get for me.  How much will your fees be?  I would propose a flat 1% of the Net. 

    AF

  2. Asif
    January 3rd, 2007

    From your initials I am assuming that you are my friend from Oregon. I guess you must have missed the statement,

    "Past performance may not be indicative of future results"

    found on most financial websites. As I mentioned in the blog entry and the January 2007 newsletter (which you should receive by email tonight or early tomorrow), 2006 will be a difficult act to follow especially given my bleak outlook for 2007.

    If I ever decide to do this professionally and switch from IT to finance, you will be on the top of my contact list. How does a fee of 1% AUM plus 10% of profits (only if I beat a benchmark index) sound? It is half what most hedge funds charge at 2% of assets and 20% of profits. 

  3. AF
    January 4th, 2007

    :-)

    So if my math is right:

    Initial investment $30K;  a 2006 gross return of $18K less $2100 in fees; net of $15.9K, a return of about 53%

    That would almost pay my mortgage for the year.

    AF

  4. mumbaikar
    January 4th, 2007

    You must see how mumbai stock exchange has been performing.

    I think India is the real "growth" stock story. I would keep Growth section of the portfolio to BRIC (Brazil, Russia, India, China) indexes and "value" part of the portfolio to global stocks comprizing of blue chips with more than 50% business coming from out of USA markets.

  5. Asif
    January 5th, 2007

    AF, your math is spot on mate. The thing that strikes me the most about these numbers is that $16K is sufficient to pay your mortgage for a whole year. You get to live in a beautiful state and pay less for your house than most people pay for rent in places like San Francisco.

    I hope you did not forget about capital gains tax. Unless you have this money in a traditional or a roth IRA.  

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