Reviewing Some of 2005

The title says some because I’m sure there will be a couple of things that I will forget to mention.

A major aspect of my approach is to try to be right more often than I am wrong. There is no getting around being wrong, success can still be had being wrong on many things.

Theme-wise I really did not get too many thing wrong this year. Energy worked as the sector, measured by XLE, outperformed the SPX by about 35%. I overweighted dividends too. DVY actually lagged SPY by about 3%. Add back in the extra percent and half yield advantage and total return lagged by about 1.5%. That one might be a push?

I was obviously wrong with the little bit of defensive action I took in October. That caused some drag in the fourth quarter.

I overweighted foreign. Generally that worked very well. Of the roughly 29 foreign holdings that are in my ownership universe, 25 of them outperformed the S+P 500. I think what is most interesting is that many foreigns outperformed despite the dollar being up for the year. Also most of the countries I talked about all year beat the S+P as well.

Most of the wrongs were individual stocks. I had rough go’s with BSX, BKF, ZBRA, IGT, SYMC, VZ, DELL and JNPR. My worst stock was FOXH which was owned by one client with an aggressive mandate. I sold it so he could take the tax write off. There may be others but that paints a good picture. Fortunately no one client owned all of them.

At this point I’m not sure how I did for the year. It looks as though I lost a little bit of my lead in the fourth quarter but I was still ahead of the S+P 500.


  1. The S&P 500 made 3% this year, which is what you could get in a money market fund. I’ve heard some people opine that index funds are a fad that worked during the Bubble but now, not so much . . . I might be coming around to agreeing with them.

    Thanks to you (among others) for hipping me to the whole international thing. I moved about 30% of my IRA overseas this summer and I’m happy so far.

  2. The S&P 500 index was up 3.00%, but add in dividends and Total Return was 4.91%.


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