Excellence Broadly Repeated

Cover Story, by Mark Robertson, Managing Partner February 1st, 2016

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Congratulations to our new individual champion Groundhog, Anna Gombar of Holly, Michigan. Anna is joined by three-time group champion Broad Assets investment club of St. Louis.

“A group of investors heeding the lessons of Graham, Babson and Nicholson has at least one leg up on the crowd and a better than average opportunity to generate exceptional returns.” — Our Groundhog Creed

We now have nine years of Groundhog legacy under our belts. For Groundhog IX (2015) we crown Anna Gombar as our individual champion and celebrate the perennial achievements of the Broad Assets Investment Club operating out of St. Louis, takes home the group championship for the THIRD TIME IN FOUR YEARS.

The Groundhog Challenge is a game. We know better than to dwell on the results of a few years. We also know that past performance is, well, past. But the collective results are nothing short of staggering — and complete with speed bumps. But the long-term success may be relevant because we’re dealing with a group of investors who build portfolios with carefully-considered expectations in mind. Join us we look back on 2015 and all things Groundhog since 2007.

All In The Family

February 2015. The post in the MANIFEST Forum by Rod Gombar shared that his wife had reluctantly decided to enter Groundhog Challenge IX. In his words:

“Well, I’m certainly disappointed. My wife (who didn’t know, or really want to actually be in the challenge) picked 5 stocks using Manifest information. Four of them are also Investor Advisory Service stocks with one more speculative one. (I did a similar thing but put a little more “thought” in my picks. I updated her “buy” prices and quantities to the same date as all the other updates, and she’s kicking my butt! Last weekend, she would rank 2nd while I’m in the bottom third.”

“Can investing be that easy using Manifest Investing?” — Rod Gombar

PS: I’m not really disappointed. My wife is enjoying beating me. I’ve told her it’s still early but she is off to a good start. If anyone is curious, she has CTSH, EPAM, PCLN, PRLB & ASPS.

Rod, we think so. We’ve shared descriptions in the past of the minimal time spent by participants like Kurt Kowitz. After nine years, Kurt’s selections have placed well up the leader board in the all-time standings.

There’s nothing magical. Sticking to high-quality companies as defined by the teachings of Benjamin Graham and George Nicholson is a solid start to any investing quest. Add in superior long-term return expectations and most people have more than a good start.

Meet Success In St. Louis III

That’s right. We first used that section heading four years ago, welcoming the Broad Assets to the roster of group champions. They’ve now returned for a third perch on the gold medal stand. (In only four years.) Ruby Lawrence and her band of champions didn’t select Lannett (LCI) this time around, choosing instead EXLService Holdings (EXLS) and Vector Group (VGR). Broad Assets has now generated an average annualized return of 39.8% over four years. I’d think Edward Jones should be dialing them up to manage a mutual fund or start a hedge fund.

Very honorable mention: Only one participant beat the market with 100% of his selections — so a tip of the groundhog cap goes to our 5th place finisher, Tom Papciak. Well done.

With respect to the institutional entries, Eddy Elfenbein of www.crossingwallstreet.com dominated the field of rhinos one more time. His groundhog scorecard was the only one that beat the market for Groundhog IX. Eddy’s selections for 2015 achieved an annual total return of 12.1%. 13-of-20 selections outperformed the Wilshire 5000. Hormel made spam of the field with a sizzling 59.8% and the Crossing Wall Street Buy List delivered solid performance top-to-bottom.

That Groundhog Heritage …

… continues to take shape. After nine years, that solid long-term track record continues to solidify.

Although the accompanying table on the right provides the annual results for 2015, it’s clear that the cumulative results for nine years have more bearing. Most participants in the table have participated for 3-9 years but there are some one-hit wonders and some one-time less fortunate participants.

While the overall results since inception back at Groundhog I exhibits an annualized total return of 7.2% — we find that the collective results for the perennial participants logs in at 9.9%, beating the market by +0.8% (80 bps)over the duration. 54.3% of these marathoners are beating the market in their tracking portfolios.

The all-time leaders are headed up (of course) by the Broad Assets, Paul Witt, Hugh McManus, Mark Robertson and Kim Butcher. (By the way, Kim Butcher had quite a year when serving as guest damsel for the monthly Round Tables and Hugh has the top-performing selections among the knights of the Round Table … but that’s a story for next month.)

The complete Groundhog IX results — including the all-time standings — are available at:

https://www.manifestinvesting.com/forums/9/topics/8652

Groundhog X (2016) Underway

One groundhog lair closes and another one opens. Follow this year’s battle at:

https://www.manifestinvesting.com/groundhog_scoreboard/2016

Go, go Groundhogs!