Beating the Market since June 2001

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Model Portfolios

This website was started during June 2001. One purpose was to give anyone who claimed to be outperforming an index an opportunity to show the world exactly what they were doing. Whenever anyone claims they are outperforming an index, I invite them to post a model portfolio, but only if I believe they have a strategy worth pursuing.

Since June 2001, not one investor responded to my offer to post a model portfolio on this site. That fact affirms a revealing and entertaining story. Many investors are eager to tell you how successful they are, but I have found that unless they are willing to share their strategy (or at least a model of their portfolio), their outperformance is likely to exist only in their imagination. In my opinion, that is true of professional as well as amateur investors.

Once again, anyone with a compelling strategy is invited to post a model portfolio on this website. If you are successful, then I will tell you everything I know about the financial newsletter business. I have found that a financial newsletter can be fun, and sometimes even profitable. Market timers and stock pickers are all equally welcome.

Model Portfolio Rules

1. Changes may be made to the portfolio no more than once per week. Changes must be made after 4:00 PM on Friday and before 4:00 PM on Saturday. Changes will be posted on this website before 4:00 PM on Sunday.
2. Purchase & Sale prices will be based on the following Monday's average HI-LO price.
3. Market Timers may not hold stock i.e., they must trade one index.
4. Stock Pickers must be fully invested at all times and must hold a minimum of 30 stocks.
5. An appropriate index must be identified.
6. Portfolios must be started after the markets close on the final trading day of the quarter.

Other Reasons to Post Model Portfolios

An essential part of an intelligent investment process is the critical examination of an investment strategy and its implementation.

It is highly unlikely for anyone to critically evaluate anything that has simply been verbally described, especially in a social atmosphere. For example, I have heard an individual speak proudly, on many separate occasions, of a personal portfolio that essentially consisted of a single stock. Not one person I knew critically evaluated his portfolio, even though it violated almost every investing rule any prudent investor should follow.

Write to HW-Newsletter@hotmail.com if you have any questions or if you believe you have an investing strategy capable of outperforming an appropriate benchmark.