Novel Investor

Compounding investing wisdom...

Happy Hour: Tracking Index Returns Via ETFs

by

A couple weeks ago I shared a spreadsheet that tracked index returns via index funds. The Google Finance spreadsheet functions for mutual funds are really easy to use to figure out returns over different periods of time.

For stocks and ETFs, it’s more complicated.

That said, making it work with ETFs is the better way to go since ETFs exist for every imaginable index, but there were a few issues to work through.

Well, I got ambitious.

The first problem was finding a simple solution that pulls start and end date prices, then calculate the return over the period. The second problem was figuring how to automagically update the start date for year-to-date returns when January 1st rolls around because I’m lazy and don’t want the hassle of remembering to do it manually each year.

I found a solution to both issues. It may not be the cleanest but it works. Here’s the spreadsheet with a link and a few caveats underneath. Continue Reading…

Lessons from Carret’s The Art of Speculation

by

Philip Carret on bad judgment

Every investor is speculating at some level. That’s Philip Carret’s argument in The Art of Speculation and he’s right. Rarely does an investor know everything about an investment (when they do it’s usually too late). There is always an unknown element just out of grasp.

Accepting that is the broadest lesson from the book. Carret dedicates the rest of it to help investors deal with the unknown in the hopes of coming out ahead.

And in that, there are some good lessons worth learning. Let’s get started. Continue Reading…

Happy Hour: The Wild Ride of GEICO

by

Some of you may know the story of GEICO. It was started in 1936 by the Goodwin family. They put up 25% of the initial capital, with the other 75% coming from a single outside source.

Ben Graham entered the picture in 1948. He was offered a deal to buy 50% of the company. He wasn’t the first or even the second person offered the deal, but he was the first to not turn it down. And he broke all of his own rules by accepting.

GEICO was nothing like the deep value cigar butt that usually caught Graham’s eye. It was a growing insurance company and, as Graham relayed in a postscript to The Intelligent Investor, “the price was moderate in relation to current earnings and asset value.”

It was overpriced not long after the deal, but Graham, a bit out of the ordinary, held on.

I can’t say the same for everyone else. Which is where things get interesting. I’ll let Walter Schloss pick up the story from here: Continue Reading…

Walter Schloss on Not Trying to Be Warren Buffett

by

Walter Schloss was a master of humility. In all my reading, he’s probably the most humble investor…and honest, straightforward, and simplistic.

He’s no Warren Buffett. He knew it. And he didn’t try to be him either.

What did he get for not emulating Buffett? Very little attention for one. Few people knew he existed until Buffett outed him in The Superinvestors of Graham and Doddsville in 1984.

He also built a decent track record for himself even though he fell a little short of Buffett’s (20.5% annually over the 45 years from 1956 to 2000).

The few interviews he sat for, he was always asked about Buffett and their association. And he always had a great answer for why he never invested like Buffett: Continue Reading…

Happy Hour: Tracking Index Returns

by

The Google Finance portfolio tracker was updated earlier this year. The “update” was more like a horrendous downgrade. It removed all the useful features until there was nothing left worth using. I’m not entirely sure what Google was thinking.

Since then, I looked for a replacement to no avail. I settled on using a spreadsheet via Google Sheets to track things.

I also used Google Finance to track the performance of indexes, factors, and alternative strategies via a corresponding ETF. It didn’t get heavy use but it was convenient to have everything in one place.

Creating something similar in a spreadsheet has been on my to-do list. So I tackled that this week. Turns out, it works better in a spreadsheet. Here’s the result (links to copy and explanation are below): Continue Reading…

Philip Carret: The Classic Tale of Novice Mistakes

by

On paper, investing seems easy enough. Stock prices fluctuate. All you have to do is simply buy a stock and sell it at a higher price. It’s a magical idea. Just repeat until wealthy.

Philip Carret outlines the typical experience a novice investor goes through as they come to realize investing is not nearly as easy as it appears on paper.

The novice learns that no such simple plan of operations as this will work. His experience, however, does not shake his confidence in the axiom that stock prices are consistently fluctuating. Indeed, the next stage of progress of the novice — a stage beyond which many traders never get at all — comes with the observation that the prices of securities fluctuate considerably from day to day and week to week.

A confident novice is a deadly combination. With all those stocks flopping around which do you buy? The one you hear about, of course. Continue Reading…

Return Tables

Asset Returns Thumb

Recent Posts

Connect