j'adoube

A Hedge Fund Clone Portfolio For 2007

MebFa-

Like da metodology, mon. Let's look at da performance, two double zero sevon to date, mon:

As of 5/10/07

AAPL +26.5%
AMP +10.1%
AMT + 3.9%
AMX +19.6%
AXP + 4.0%
AZO +15.7%
BBBY +6.8%
CMCSK -7.7%
COH +12.0%
GOOG +0.2% Memo to MebFa --
MSFT +2.8% Don't put these two so close together.
QCOM +16.5%
TYC +6.2%
UNH -1.3%
WU -5.6%

I get an average weighted total return of +7.3% as of 5/10/07.
The S&P total return (basis VFINX) is +5.8% over the same period.

Now that certainly doesn't stink, MebFa. But I'm not yet ready to see you put on Judy Collins' old dress and start singing "Send in the Clones". Not even sure the extra return justifies the concentration risk --- [big pause] yet.

It's early. It's just inning three. And heck, one year is not even close to an adequate test period. Several of these guys have 3-5 year average holding periods.

Which leads me to a possible refinement. It would seem that results may improve if you filter out holdings that have "aged". That is, you want to accumulate stocks that are early in their hold cycle among the subject managers. If the average holding period among these managers is, say, three years, you don't want to buy stocks that are already held, say, for an average of two years by these managers, because they're already looking for the exits, perhaps. (On the other hand, the greatest gains on their holdings may come toward the end of their holds. Peter Lynch liked to say that his big gains often came in the thord or fourth year he held a stock).

Anyway, good work so far, big guy. Keep mining this rich vein. I'm there with ya.

j'adoube