2/22/2015 More, or Less?

Sector Model	XLU	-1.87%
Full Model	Date	Return
ESI	8/4/2014	-42.28%
EDU	10/27/2014	-10.47%
UVV	12/2/2014	19.51%
JOY	12/8/2014	-12.81%
RS	12/11/2014	-5.65%
GNW	1/20/2015	9.45%
AGCO	1/23/2015	13.98%
DNR	2/4/2015	4.09%
ALB	2/10/2015	6.39%
ISBC	2/17/2015	-0.17%
(Since 5/31/2011)
S&P	Annualized	12.83%
Sector Model	Annualized	24.07%
Full Model	Annualized	21.36%
S&P	Total	56.88%
Sector Model	Total	123.53%
Full Model	Total	105.86%
Sector Model	Advantage	11.24%
Full Model	Advantage	8.53%
	Previous	2015
S&P	53.06%	2.50%
Sector Model	122.60%	0.42%
Full Model	101.13%	2.35%

 

Both models are positive for the year, but trailing the S&P.

The Sector Model is well ahead of both benchmark and the S&P since the time the STAR fund was launched at www.folioinstitutional.com. 

 

Ahead?

Behind?

Just depends on whether you are looking back for the full run or just the last few weeks.

I say this, because as a human being, it annoys the smack out of me to have a bad month, week, day, or even an hour.  The smaller the time frame you look in, the more manic depressive it becomes.

For any investor it is important to stand back and look at the numbers as a computer does, rather than as a human.

Computers can look at the entire period, the benchmarks, and the trends.  Humans hyperbolically discount time.  We’d rather have that piece of chocolate cake now than be thin later. We’d rather have that cigarette now than healthy lungs later.

The best representation of this is the now famous Marshmallow test. The kids are offered one marshmallow now, or two later.  Most kids cannot compare two later to one now – and so they eat one now.

Less is more, if it is sooner in time.

More is less, if it is greater in time.

Hence Warren Buffet could have awesome decades, and a bad week – and everyone will think he’s done.

If you’re human, look at your plan from a distance and get rid of the caveman noise screaming between your ears.  If you outperform, make sure it’s for longer periods instead of shorter ones.  If you can do both, even better.  But if you have to choose one: pick the one you like the least – the longer time frame.

Tim