GuruFocus model portfolios will be rebalanced after today’s market close. If you want to invest in GuruFocus value strategies, now is the time. The Buffett-Munger model portfolio, in which GuruFocus founder Dr. Charlie Tian invests his own money, is underperforming the S&P 500 by about 1% this year. This is after three years’ outperformance since 2009. The portfolio has a total gain of about 81% for the last four years, outperforming the S&P 500 by 24.7% cumulatively.
This year’s underperformance was almost all caused by one single stock, ITT Educational Services (ESI). The market environment for the for-profit college has changed dramatically. It can’t make money as easily as it used to. The company’s business predictability dropped. This is the largest risk in investing in predictable companies.
The remaining 24 stocks did very well, as you can see from the list below:
The rebalance will be done after the market close today. Usually we have about a 50% turnover rate for the model portfolios, which means about 50% of the stocks will stay in the portfolio.
This is the annual performance number of the Buffett-Munger portfolio:
If you want to invest along with the Buffett-Munger strategy, now is the time. GuruFocus Premium Membership is required to gain full access to this portfolio. If you are not a Premium Member, we invite you for a 7-Day Free Trial.
This year’s underperformance was almost all caused by one single stock, ITT Educational Services (ESI). The market environment for the for-profit college has changed dramatically. It can’t make money as easily as it used to. The company’s business predictability dropped. This is the largest risk in investing in predictable companies.
The remaining 24 stocks did very well, as you can see from the list below:
| Symbol | Company | # of Shares | Bought on | Share Cost | Current Price | Change | Value ($) |
| CASH | Cash | 161.34 | 12/31/1969 | 1 | 1 | 0 | 161.34 |
| ANSS | Ansys, Inc. | 115 | 01/01/2011 | $52.07 | 67.08 | +28.83% | 7,714 |
| ATRI | Atrion Corporation | 25 | 01/02/2012 | $240.23 | 190.4 | -20.74% | 4,760 |
| BRLI | Bio-Reference Labs, Inc. | 371 | 01/02/2012 | $16.27 | 28.61 | +75.85% | 10,614 |
| CHRW | CH Robinson Worldwide, Inc. | 72 | 01/01/2009 | $55.03 | 62.54 | +13.65% | 4,503 |
| CPRT | Copart, Inc. | 282 | 01/02/2010 | $18.31 | 29.03 | +58.55% | 8,186 |
| ESI | ITT Educational Services, Inc. | 94 | 01/01/2011 | $63.69 | 16.82 | -73.59% | 1,581 |
| ESRX | Express Scripts | 135 | 01/02/2012 | $44.69 | 52.87 | +18.3% | 7,137 |
| FCFS | First Cash Financial Services, Inc. | 194 | 01/01/2011 | $30.99 | 48.5 | +56.5% | 9,409 |
| FDS | FactSet Research Systems, Inc. | 78 | 01/02/2010 | $65.87 | 88.25 | +33.98% | 6,884 |
| GD | General Dynamics | 91 | 01/02/2012 | $66.41 | 68.01 | +2.41% | 6,189 |
| HRL | Hormel Foods Corporation | 268 | 01/02/2010 | $19.225 | 30.89 | +60.68% | 8,279 |
| IDXX | Idexx Laboratories | 78 | 01/02/2012 | $76.96 | 92 | +19.54% | 7,176 |
| JJSF | J&J Snack Foods Corp. | 124 | 01/01/2011 | $48.24 | 62.65 | +29.87% | 7,769 |
| JW.A | John Wiley & Sons, Inc. | 136 | 01/02/2012 | $44.4 | 38.5624 | -13.15% | 5,244 |
| LLTC | Linear Technology | 201 | 01/02/2012 | $30.03 | 33.74 | +12.35% | 6,782 |
| LMT | Lockheed Martin Corporation | 74 | 01/02/2012 | $80.9 | 90.66 | +12.06% | 6,709 |
| NEOG | Neogen Corporation | 197 | 01/02/2012 | $30.64 | 44.755 | +46.07% | 8,817 |
| NRCI | National Research Corporation | 155 | 01/02/2012 | $38.81 | 53.01 | +36.59% | 8,217 |
| RGLD | Royal Gold, Inc. | 89 | 01/02/2012 | $67.43 | 80.07 | +18.75% | 7,126 |
| SIAL | Sigma-Aldrich Corporation | 90 | 01/01/2011 | $66.56 | 72.85 | +9.45% | 6,557 |
| TEF | Telefonica SA | 360.2313 | 01/02/2012 | $16.7494884537 | 13.39 | -20.06% | 4,823 |
| WAG | Walgreen Company | 182 | 01/02/2012 | $33.06 | 36.8 | +11.31% | 6,698 |
| WAT | Waters Corporation | 77 | 01/01/2011 | $77.71 | 86.41 | +11.2% | 6,654 |
| WMT | Wal-Mart Stores Inc | 111 | 01/01/2011 | $53.93 | 67.62 | +25.38% | 7,506 |
| WRLD | World Acceptance Corporation | 202 | 01/01/2009 | $19.76 | 73.96 | +274.29% | 14,940 |
| Total Market Value: $180,983; Cost: $100,000; Change: 80.98% |
This is the annual performance number of the Buffett-Munger portfolio:
| Year | S&P 500 | Buffett-Munger Screener top 25 |
| 2009 | 23.5% | 29.1% |
| 2010 | 12.8% | 19.1% |
| 2011 | -0% | 6% |
| 2012 | 12.1% | 11% |
| Since Inception | 80.9% | |
| Outperforming the S&P | 24.7% |
