Motley Fool Performance – February 2017

Motley Fool Performance – February 2017
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Here are the latest performance stats for all the Motley Fool services, since their inception. Returns are calculated using the official methodology of each service, per the Motley Fool site.

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Special Ops and Deep Value Update

Note that due to the shuttering of both the Deep Value and Special Ops services, I’ve dropped them from the chart, but will include their prior historical returns until they roll off next year.

Motley Fool Performance 2017-02-28

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{ 9 comments… add one }
  • Bill Belsom March 7, 2017, 7:43 am

    Great job! And David’s portfolio has given 45%! Sheesh.

    Reply
  • eric March 30, 2017, 11:37 am

    Hey.

    MF recently posted this:

    “After all, when the S&P 500 fell a gut-wrenching 29.5% in the six months following the launch of Pro, Jeff’s U.S. Pro members were never down more than 2.4%.

    What’s more, since its inception Pro members have enjoyed a total return of 180% — and the stock positions in the Pro portfolio alone have outperformed the S&P 500 by more than 219%”

    Your graph says Pro US has only outperformed by a mere 1%, so I’d love to hear your feedback on this.

    Thanks!

    Reply
    • Kevin March 31, 2017, 10:07 pm

      Hi Eric – the returns on my site are annualized returns since inception, whereas the 180% and 219% you quoted are total returns since inception. Total returns are another way of looking at it, but are not typically the way Pro looks at their returns. Also, the second number (219%) seems to refer to only the stock positions and not taking into account the performance on their options or their cash position. This is an interesting data point but for a portfolio where all positions contribute to the performance, and a portfolio that is so focused on using their various options hedging strategies as a way to outperform “regardless of the market conditions”, the 219% seems very much like a cherry-picked statistic.

      Reply
  • eric April 1, 2017, 12:17 pm

    I can definitely see how the 219% is cherry-picked and therefore not particularly helpful.

    However, I’m a bit confused on one point here, so I hope you can help clarify it for me.

    As you said, the 180% is total returns since inception—which in this case is October 2008.

    By contrast, the total returns of the S&P 500 since October 2008 is, according to Morningstar, about 103%.

    I don’t understand how annualizing the returns would lessen this disparity any.

    If we annualize 180% over 8.5 years, we get 12.875%
    If we annualize 103% over 8.5 years, we get 8.685%

    Thanks

    Reply
    • Kevin April 1, 2017, 8:10 pm

      Hi Eric – yes, that’s basically right (180% over 8.5 years is ~13%). The S&P benchmark that I use (and that MF Pro uses) is the S&P 500 Total Returns, which reinvests dividends. That return over the same time is 169%. Annualizing that gets you about 12.5%. So that’s the difference. Hope that helps.

      Reply
      • eric April 1, 2017, 9:20 pm

        Ah, I knew I must have been missing something! Using the S&P TR makes a huge difference. Thanks for that!

        Using the TR, I get a return to date of 144% ~ 195%, depending if we look at the beginning or end of October—or an average of 169.5%.

        Which makes you think… If the “stock positions in the Pro portfolio alone” outperformed it by 219%, but the total portfolio was basically on par, the options really must have weighed it down—which is a shame, because you’re paying a hell of a lot for that service, and options are flaunted as a major selling point.

        Do you have any experience or data on their Canadian offerings?
        (Pro Canada | Stock Advisor Canada | Dividend Investor Canada)

        Or any comments?

        Thanks again, you’ve been a big help

        Reply
        • Kevin April 1, 2017, 10:37 pm

          HI Eric – glad I could clear it up. On Pro, it’s not just the options that bring the results down, but they also carry cash and have had some active hedges to protect against sudden down turns in the market, so some of that under-performance vs. pure stock investments is a part of what they intentionally do. But your point about paying a lot for advanced strategies is a valid one – if you read my review, I also wondered how many of their investors can or are willing to execute every single recommendation, and if they pick only some of them, they likely would be better off with one of the simpler services. My general experience is that all the advanced strategies and hedging techniques add a layer of complexity that is distracting at best, and grossly under-performing most of the time (Which is why so many hedge funds fail miserably).

          On Canada, no I haven’t really looked at any of them (hard enough to keep up with the US services!)

          Reply
  • Rob Grossman April 7, 2017, 4:45 pm

    I’m a very seasoned investor and have subscribed to MF’s Inside Value and MF’s Options newsletters for just over a year. Of course the market’s been a super performer during this period so, since I’m beating the market, with the word “market” defined as The “Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)”.

    I would like to add a gold or precious metals component to my portfolio. I thought about just buying a predefined dollar amount of Vanguard’s Sector Precious Metals Sector Fund.

    Does Motley Fool sell a newsletter that includes precious metals investing as part of their investment strategy? If so, I’d really appreciate the information. If they don’t but would like to chime in with personal thoughts on the matter, promise not to criticize what I don’t agree with but rather, will ask questions to help me understand how you arrived at the comment or recommendation you ultimately arrived at. Thanks for your considerations.

    Reply
    • Kevin April 7, 2017, 10:52 pm

      Rob – Motley Fool doesn’t offer any services that recommend precious metals as part of their strategies. The closest you might get is when they recommend a stock of a big mining company, but I know that’s not really what you mean. I’m personally not a big fan (or very knowledgeable) of pure plays on precious metals, so a sector ETF might be your best bet.

      Reply

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