The Fat Pitch Financials Portfolio continued to gain ground in November. Since I last reported on the Fat Pitch Financials Portfolio October closing balance, this paper portfolio is up 2.7%. The portfolio had closing balance of $1,177,667.82 on November 30, 2009.
I launched this paper portfolio back in September of 2004 on Marketocracy with a virtual starting balance of $1 million and a per share value of $10. I created this paper portfolio shortly after I started the Fat Pitch Financials blog as a way my readers could track my stock picks. The objective of this portfolio is to invest in companies with wide moats that are selling for prices that provide for a significant margin of safety.
Year-to-date the FPF Value Port is up 36.00% versus just 24.07% for the S&P 500. The orange line in the graph below shows how the Fat Pitch Financials Port relative to the major indexes.
Price History for the Fat Pitch Financials Portfolio (as of November 30, 2009)
As you can see, the Fat Pitch Financials Port has recently pulled ahead of the S&P 500 and Nasdaq. According to Marketocracy, the Fat Pitch Financials Portfolio has outperformed 93.9% of all other Marketocracy funds over the past 2 years.
Returns as of November 30, 2009
As you can see in the table above, the FPF Value Port gained 2.68% in November, whereas the S&P 500 gained 6.00%. Over the past 12 months, the Fat Pitch Financials Port gained 38.81%, outpacing the 25.39% total return for the S&P 500 over that same period. Since inception in September of 2004, the FPF Value Port produced an annualized return of 3.14% versus the 1.50% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 1.64%, but I hope to increase this margin substantially over the coming years.
Fat Pitch Financials Portfolio Style Allocation
Marketocracy also provides a style breakdown for its portfolios. According to the table above, the Fat Pitch Financials holds mostly value stocks. The 11.8% allocation to large cap growth stocks is attributed to my Kraft (KFT) and eBay (EBAY) positions. As far as the size of the companies held, the FPF Port is balanced between 54% allocation to large cap stocks and most of the remaining allocation split between small and micro cap stocks.
Current Positions as of November 30, 2009
My strongest performing position continues to be Microsoft (MSFT). The roll out of Windows 7 seems to have gone well. I just upgraded to a new Windows 7 Profession PC and I like what I see so far. It will be interesting to see how Windows 7 sales impact next quarter earnings.
The only activity to note this past month was the spin off of Steak N Shake (SNS) shares from Western Sizzlin (WEST). The portfolio received 2,687 shares of Steak N Shake. Western Sizzlin will also soon cease trading and be converted instead into callable debentures with a face value of $8.07 that pay 14% interest annually. I just realized that Marketocracy might not be able to handle the debentures, so I might have to sell off the Western Sizzlin position soon to keep the performance tracking somewhat accurate.
I still have $153,999.38 in cash available in this portfolio to start one or two new positions if I discover any opportunities. If the market relapses, I’ll be ready to pounce.
Disclosure: I own shares of Western Sizzlin (WEST), Steak N Shake (SNS), Broadridge Financial Solutions (BR), Microsoft (MSFT), Western Union (WU), Kraft Foods (KFT), eBay (EBAY), Concord Camera (LENS), McGraw-Hill (MHP), Destination Maternity (DEST), Sotheby’s (BID), Pfizer (PFE), US Bancorp (USB), Wells Fargo (WFC), USG (USG), and Premier Exhibitions (PRXI).