Update: I’ve removed SIG from the list.
In Ben Graham’s Net Current Asset Values: A Performance Update Professor Henry Oppenheimer examined the return on stocks selected using Benjamin Graham’s net current asset value strategy over the period 1970 to 1983. Oppenheimer’s conclusion about the returns from such stocks was nothing short of extraordinary:
The mean return from net current asset stocks for the 13-year period was 29.4% per year versus 11.5% per year for the NYSE-AMEX Index. One million dollars invested in the net current asset portfolio on December 31, 1970 would have increased to $25,497,300 by December 31, 1983. By comparison, $1,000,000 invested in the NYSE-AMEX Index would have increased to $3,729,600 on December 31, 1983. The net current asset portfolio’s exceptional performance over the entire 13 years was not consistent over smaller subsets of time within the 13-year period. For the three-year period, December 31, 1970 through December 31, 1973, which represents 23% of the 13-year study period, the mean annual return from the net current asset portfolio was .6% per year as compared to 4.6% per year for the NYSE-AMEX Index.
Oppenheimer’s methodology was to acquire all stocks meeting Graham’s investment criterion on December 31 of each year, hold those stocks for one year, and replace them on December 31 of the subsequent year. I’m introducing a new portfolio to track the performance of Graham NCAV stocks in real time. I’ll roll it over annually, like Oppenheimer did. Here’s the Greenbackd 2010 Graham NCAV Portfolio (extracted from the Graham Investor screen):
You can track the performance of the Greenbackd 2010 Graham NCAV Portfolio throughout 2010 with Tickerspy.
[Full Disclosure: No positions. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]