Warren Buffet mythology .......or if i invest much i earn much?


#1

I did a well good experiment on W B investment…
I looked at end of Feb 2018 at the officially portfolio Warren Buffet have.
As it is very difficult to copy him (due to investment price reason) i did a different approach.

Portfolio 1
My approach was for every % of shares he hold in the portfolio i hold one (example company X makes 10% of his portfolio i will hold 10 … (all below 1 % are related to 1 share).
Shares bought 22 to 26 Feb. 2018.

Portfolio 2
The other approach to compare was for every 10 Mio. shares he hold i hold 1 (example company X he hold 68 Mio. shares i hold 7 ( all shares below 10 Mio. are related to 1 share).
Shares bought 26 to 27 Feb. 2018.

Portfolios updated as officially reported.

This is what i got up to today:

Portfolio 1
Time-weighted Returns (including Dividends & Fees >> 8.65%
Max Draw down -10.13%
XIRR (including Dividends &Fees) >> 15.66% Capital Flow >> SGD 15,565.88
Dividends Collected (based on ExDate) Total >> 177.88 Monthly >> 17.79
Avg cost >> 15,969.74 Avg cost yield >> 1.34%
Anual P&L >> SGD 743.24
Dividends Projected (based on ExDate) 2018 (Projected) SGD Total >> 240.66
Monthly >> 20.06 Avg cost >> 16,142.06 Avg cost yield >> 1.49%

Portfolio 2
Time-weighted Returns (including Dividends & Fees >> 3.80%
Max Draw down >> -11.85%
XIRR (including Dividends & Fees) >> 7.08% Capital FlowSGD >> 29,767.74
Dividends Collected (based on ExDate) SGD Total >> 390.43 Monthly >> 39.04
Avg cost >> 30,726.56 Avg cost yield >> 1.52%
Anual P&L >> SGD -124.62
Dividends Projected (based on ExDate) 2018 (Projected) SGD Total >> 527.12
Monthly >> 43.93 Avg cost >> 31,016.61 Avg cost yield >> 1.70%

Data based on Stocks cafe data as per 05 Oct 2018

Quite interesting data coming out as a higher investment not automatically guaranty a higher profitability due to the reshuffle share amount.
All 2 portfolio hold same company’s.
Interesting to see how the “right” shuffle influence return and dividend.
Also interesting to see difference of the amount necessary to invest.
It also shows that you can be “successful” depend on Strategy you follow.

There is may a small difference in the price of the shares but overall that should not make that much difference.

Open for discuss…have fun :stuck_out_tongue_closed_eyes:


#2

My approach was for every % of shares he hold in the portfolio i hold one (example company X makes 10% of his portfolio i will hold 10 … (all below 1 % are related to 1 share).

This approach would not follow WB portfolio allocation, right?

For example if WB portfolios have only two companies (A and B) and WB allocate 50% of the portfolio to each. But if a share of company A is USD1 and a share company B is USD100. Then according to this approach, ~99% of the portfolio allocation will be given to company B.

The other approach to compare was for every 10 Mio. shares he hold i hold 1 (example company X he hold 68 Mio. shares i hold 7 ( all shares below 10 Mio. are related to 1 share).

This would more closely mimicking WB portfolio allocation (at least relative to the above approach).


#3

Interesting view with the dollar example…was not lock on it from that view…
Sure the P 1 not really reflect on the full values or to in taken account values his portfolio as the relation is different, still is the a cheaper approach to bring all in in a specific relationship.

P1 still need the lesser amount of money to invest and have the higher time weight return. (as per now).
P2 have a higher amount to invest but brings the higher amount of dividend…where it is interesting that the dividend yield of both portfolio is almost same. (as per now).

It is just about to find out when you try copy big investors what could be the better approach. With the all over investment sum compared to all over performance over time.
Then seen related to the own target… more portfolio growth or dividend return where the drive was better.

I think over time may interesting movements can be seen…


#4

I see.

In my opinion, P1 is simply about copying the stocks that was also bought by big investor (WB in this case).

P2 is about both copying the stocks bought and also maintaining the allocation to be as similar as practically possible. Hence, if we believe that allocation (chosen by the big investor) is also part of his/her skill then this approach would be “better”.

Question: For P2, you have chosen a ratio of 10:1 (that is for every 10 shares in WB portfolio, you would have 1 share in P2). Since the P2 cost is at ~SGD 30K, does that mean WB portfolio size is only ~SGD300k? That seems small for WB.


#5

No…in P2 i use for every 10 million shares he hold a 1 share.
For example Phillips 66 he hold 34,729.514 shares so i have 3 or 4 of them (usally i go to the next higher number).
It is around 1.99% of his portfolio so i have in P1 2 of them.


#6

I see. I misunderstood. Thanks for clarifying!