Constantine Lycos’s stock picks performance review May 2023
In August 2020, I started recording a monthly video for the Lycos Asset Management youtube channel. In the videos, I usually give a short overview of recent events that affected the financial markets, talk about current market conditions, and attempt to prognosticate the general direction of asset classes such as stocks, bonds, real estate and commodities. I also give my top stock recommendations.
Almost three years later, I thought I would be a good idea of reviewing the performance of my stock picks and compare them to a suitable benchmark, like the MSCI World Equity Index, as represented by the URTH ETF, in US dollars including dividends. [The performance of my stock picks does not include any fees or withholding taxes from US / foreign dividends. The performance of the URTH ETF includes management fees to the ETF, withholding taxes that the ETF had to pay for foreign dividends but no withholding taxes for ETF distributions to its unitholders.]
I am happy to report that my picks were up on average 11.6% a year after I recommended them and the URTH ETF was up 2.6%. That’s 9% better than the benchmark!
This is unusually high in my experience due to a partial return to value type investing during the last 3 years or so, but reassuring nevertheless. My motto of “buying good businesses at good prices” does go in and out of style and there are times when fundamentals such as earnings, cashflows, balance sheet strength and most importantly valuations don’t matter. Under those conditions I would expect my stock picks to under-perform. Under more rational conditions, I would expect my picks to outperform. Investors and markets can stay irrational for longs period of time so there can be long periods of underperformance so we have to practice patience when that happens.
Some more good news, my picks outperformed in 17 out of the last 20,
resulting in a “winning” percentage of 85%
Anything above 50% is good as equity markets do well over time and out-performing the markets is off course even better.
I’m planning on reviewing the performance of my picks twice a year so stay tuned for more updates!