Fat Pitch Financials Portfolio 2009

The Fat Pitch Financials Portfolio performed nicely in 2009, especially given the challenging market conditions.  As of the market close on December 31, 2009, the Fat Pitch Financials Portfolio ended with a balance of $1,233,461.25.  Of that $154,312.72 was in cash and $1,079,148.53 was in stocks. Since I last reported on the Fat Pitch Financials Portfolio November closing balance, this paper portfolio was up 3.9%.

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.

The FPF Value Port returned 42.44% versus just 26.47% for the S&P 500 in 2009. The orange line in the graph below shows how the Fat Pitch Financials Port relative to the major indexes.

Fat Pitch Financials Portfolio 2009 Performance

Fat Pitch Financials Performance for 2009

As you can see in the chart above, my portfolio began recovering more quickly than the market indexes after the March low. I’m hoping the Fat Pitch Financials Port will continue this trend of outperformance into 2010.

Since inception in September of 2004, the FPF Value Port produced an annualized return of 4.00% versus the 1.84% return of the S&P 500. I’m proud that I’m beating the S&P 500 by 2.15%, but I hope to increase this margin substantially over the coming years.

Fat Pitch Financials Portfolio Performance Since Inception (As of December 31, 2009)

Fat Pitch Financials Portfolio Performance Since Inception

Fat Pitch Financials Portfolio December 31, 2009

Total Value: $1,233,461.25 Cash Value: $154,312.72 Stock Value: $1,079,148.53 Shares: 100,000 Price: $12.33

Last Week -1.44%
Last Month 3.93%
Last 3 Months 12.58%
Last 6 Months 25.22%
Last 12 Months 42.44%
Last 2 Years -12.04%
Last 3 Years -1.30%
Last 5 Years 21.18%
Since Inception 22.99%
(Annualized) 4.00%
Last Week -0.97%
Last Month 0.71%
Last 3 Months 9.33%
Last 6 Months 25.70%
Last 12 Months 26.47%
Last 2 Years -20.32%
Last 3 Years -15.95%
Last 5 Years 2.11%
Since Inception 10.14%
(Annualized) 1.84%
Last Week -0.47%
Last Month 3.22%
Last 3 Months 3.25%
Last 6 Months -0.48%
Last 12 Months 15.98%
Last 2 Years 8.28%
Last 3 Years 14.65%
Last 5 Years 19.07%
Since Inception 12.86%
(Annualized) 2.15%

Fat Pitch Financials Portfolio Style Allocation

Value Blend Growth
Large 40% 0% 11% 51%
Medium 5% 0% 0% 5%
Small 17% 0% 1% 18%
Micro 21% 2% 3% 26%
83% 2% 15%

Marketocracy also provides a style breakdown for its portfolios. According to the table above, the Fat Pitch Financials holds mostly value stocks. The 11% 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 51% allocation to large cap stocks and most of the remaining allocation split between small and micro cap stocks. I’m thinking that I should look to see if I’m missing any opportunities in mid-cap stocks.

Fat Pitch Financials Portfolio Positions by Sector and Industry

Name Portion
Consumer Discretionary 42%
Consumer Staples 5%
Financials 10%
Health Care 3%
Industrials 1%
Information Technology 39%

The Fat Pitch Financials portfolio holdings are predominately in consumer discretionary and information technology stocks.  These two sector categories make up 81% of the portfolio. Unfortunately, I held 10% of the portfolio in financials, but thankfully they recovered nicely at the end of 2009. My 3% position in the health care sector seems a bit scimpy, but given the changes in the health care sector given the government’s reform efforts it might actually be prudent to see how the changes shake out.

There were no new transactions in December. The only real change was the 20 to 1 reverse split that Steak N Shake (SNS) conducted. I think that reverse split was kind of silly, and it has given me some reservations regarding my Steak N Shake investment.

I look forward to 2010 and hope to continue beating the market.

DisclosureI 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).

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