Buffett-Munger Model Portfolio Up 14.4%; All Positions Gained

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May 03, 2011
GuruFocus Buffett-Munger Model Portfolio is up 14.4% year to date, without counting dividends. All positions in the portfolio gained.


Buffett-Munger Model Portfolio contains the top 25 stocks on the beginning of the year from the Buffett-Munger Screener. The 14.4% year to date is after a 27% gain in 2009 and 21.1% in 2010. The "Buffett-Munger Screener" can be used to find the stocks that young Warren Buffett and Charlie Munger would invest:


1. Companies that have high Predictability Rank, that is, companies that can consistently grow their revenue and earnings.


2. Companies that have competitive advantages. It can maintain or even expand its profit margin while growing its business


3. Companies that incur little debt while growing business


4. Companies that are fair valued or under-valued. We use PEPG as indicator. PEPG is the P/E ratio divided by the average growth rate of EBITDA over the past 5 years.


All of the positions in this portfolio gained. Leading the gain is World Acceptance Corp. (WRLD, Financial), which gained 241% since added into the portfolio in 2009.


This is the portfolio details:


This is the complete portfolio of the portfolio:

(Current Value: $175,949. Invested: $100,000 on December 31, 2008)



Symbol

Company

# of Shares

Bought on

Share Cost

Current Price

Change

Value ($)

CASH

Cash

221.15

12/31/1969

1

1

0

221.15

ADM

ARCHER DANIELS MIDLAND CO

199

01/01/2011

$30.08

37.02

+23.07%

7,367

ANSS

ANSYS Inc.

115

01/01/2011

$52.07

54.67

+4.99%

6,287

ASNA

Ascena Retail Group Inc.

227

01/01/2011

$26.42

30.82

+16.65%

6,996

BCR

C.R. BARD INC.

65

01/01/2011

$91.77

106.75

+16.32%

6,939

BDX

BECTON DICKINSON AND CO.

71

01/01/2011

$84.52

85.94

+1.68%

6,102

CHD

CHURCH & DWIGHT CO. INC.

71

01/01/2009

$56.12

82.48

+46.97%

5,856

CHRW

C.H. Robinson Worldwide Inc.

72

01/01/2009

$55.03

80.15

+45.65%

5,771

CPRT

Copart Inc.

141

01/02/2010

$36.62

44.95

+22.75%

6,338

ESI

ITT EDUCATIONAL SERVICES

94

01/01/2011

$63.69

71.74

+12.64%

6,744

EXPO

Exponent Inc.

160

01/01/2011

$37.54

41.94

+11.72%

6,710

FCFS

First Cash Financial Services Inc.

194

01/01/2011

$30.99

38.83

+25.3%

7,533

FDS

FactSet Research Systems Inc.

78

01/02/2010

$65.87

109.41

+66.1%

8,534

HRL

HORMEL FOODS Corp.

268

01/02/2010

$19.225

29.41

+52.98%

7,882

JJSF

J & J Snack Foods Corp.

124

01/01/2011

$48.24

50.49

+4.66%

6,261

MCRS

MICROS Systems Inc.

137

01/01/2011

$43.86

51.86

+18.24%

7,105

NVS

NOVARTIS AG

102

01/01/2011

$58.95

59.17

+0.37%

6,035

PRSP

Prosperity Bancshares Inc.

153

01/01/2011

$39.28

45.44

+15.68%

6,952

PRXL

PAREXEL International Corp.

283

01/01/2011

$21.23

27.02

+27.27%

7,647

RY

ROYAL BANK OF CANADA

114

01/01/2011

$52.36

62.96

+20.24%

7,177

SIAL

SigmaAldrich Corp.

90

01/01/2011

$66.56

70.53

+5.96%

6,348

TECH

Techne Corp.

75

01/02/2010

$68.56

77.67

+13.29%

5,825

VAR

VARIAN MEDICAL SYSTEMS INC.

86

01/01/2011

$69.28

70.2

+1.33%

6,037

WAT

WATERS CORP

77

01/01/2011

$77.71

98

+26.11%

7,546

WMT

WALMART STORES INC.

111

01/01/2011

$53.93

54.98

+1.95%

6,103

WRLD

World Acceptance Corp.

202

01/01/2009

$19.76

67.49

+241.55%

13,633

Total Market Value: $175,949; Cost: $100,000; Change: 75.95%



We can see the gains are quite even across the board. Since incepted in 2009, the portfolio has gained 76%. In the same period, S&P 500 gained 50%.


From the back testing study from 1998-2008 we have found strong correlations between the Predictability of Businesses and the long-term return of stocks. The group of undervalued highly predictable companies performed the best. This group had an annualized gain of 20%, while the market just averaged 2.7% a year.


For details, go to: What Worked In The Market From 1998-2008? Part II. Under-Valued Predictable Companies And Buffett-Munger Screener.


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