Interesting Performance

I was perusing the "Portfolio123 Weekly Performance Report" that came in my email today (June 13, 2025). I find the public strategies an excellent source for seeing what Rankings and Buy/Sell rules have performed well for others and for idea generation.

I was surprised to see that under the "WINNERS CIRCLE PUBLIC LIVE STRATEGIES" category, the highest-ranked portfolio by "Return 1 Year" was "Zweig," by "mac," with a one-year return of 77.06%.

When I investigated the model, what was surprising was that the last live trades were in May 2009! Scanning through the Realized Transactions, I found that HALF of the companies the model had purchased were no longer in business (having merged, been acquired, or gone out of business).

I found it fascinating that a strategy abandoned for the last 16 years had performed the best in the last year, outperforming actively monitored models.

I wonder what lessons we can take away from this interesting example of benign neglect?

That particular portfolio is invested 91% in Netflix. So it's a matter of luck.

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Ahhh... luck of the draw, I guess. I didn't look deeper into the holdings to identify NFLX. Thanks for catching that, Yuval. So I guess there aren't any lessons to be found here, other than, "Be lucky." haha

Still, a lesson to be learned here. Because that's what neglected accounts look like after 10+ years. They look extreme. Same goes for concentrated Neversell Growth portfolios (no Reconstitution or Rebalancing). The top performer of the decade will always be a lucky outlier. We just don't see all the strategies and accounts which went bust over the same period using similar methods. Example for extreme survivorship bias which in the real world most likely would give you the necessary publicity to start a billion dollar hedgefund :joy:.

I personally have a rule of thumb to assess if I trust a track record:

Low annual turnover + high concentration = high luck component and low reproducibility

Number of samples (realized trades) matters...

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