In April of 2005 I wrote: 10 stocks for 10 years. At that time I also created a fund through Marketocracy. Thus far the portfolio is up 15.8% annually (versus 15.3% for the S&P 500) – see more below…
I have made minor changes to the fund during the year (less than 4% turnover). As I mentioned in June I would buy Tesco, but Marketocracy does not support it. Google is still doing quite well, up 122% since inception. The second largest gain is for Petro China, up 106% and Toyota is up 67%. Dell is the worst performer down 25% followed by Yahoo down 16%. I am comfortable with the original 10 stocks and don’t have any significant changes I would make to the portfolio now. For the small change I would make now see more…
Marketocracy automatically reduces the fund return by 2% to simulate a management fee and “charges” fees on trades. The 10 stocks portfolio didn’t meet the diversification requirements for marketocracy, at the time, so I modified the portfolio a bit when I setup the fund, adding a few more stocks. For a list of stocks see the Jan 2006 update.
I am a bit less optimistic about the 3 largest gainers, at this price, than I was at the price in April, 2005 but still like the stocks at these prices. I would consider buying more Dell but have not done so yet, I did add to Yahoo recently and would add it and Tesco to a list I would select today. First Data split into two stocks and I would not include it in a selection today (I have not sold it in the marketocracy portfolio and don’t see any need to but may sell one or both going forward). Today I would select 11 stocks for 10 years (seeking companies with a history of large positive cash flow that seemed likely to continue that trend):
- Templeton Dragon Fund (TDF -12%)
- Google (GOOG – 12%)
- Dell (DELL – 10%)
- Toyota (TM – 10%)
- Tesco (DELL – 10%)
- Pfizer (PFE – 8%)
- Amazon (AMZN – 8%)
- Intel (INTC – 8%)
- Petro China (PTR – 8%)
- Cisco (CSCO – 8%)
- Yahoo (YHOO – 6%)
These are obviously mainly large companies. A balanced portfolio would include other investments this is just a list of some stocks that seem to me to be good long term investments that as a group are likely to do well over the next decade.