Fat Pitch Financials Portfolio April 2008

The Fat Pitch Financials Portfolio was down 1.21% in April. Considering that the S&P 500 was up 4.87% last month, this performance was rather disappointing. Looking back over the past 12 months, performance was was a bit better. The Fat Pitch Financials Port was up 0.36% versus a negative -4.93% for the S&P 500. Most importantly, the annualized rate of return since inception for this portfolio is 7.70%, which basically matches the 7.83%.

I recently received a question about the beta of the Fat Pitch Financials Portfolio. I don’t normally track the beta of my portfolio, so this was a rather interesting question. Thankfully, Marketocracy tracks the beta, alpha, and R-Squared for my portfolio. The beta was 0.50, which basically tells me that I have a very boring low volatility portfolio. Alpha is 4.66%, which I believe means that this portfolio beat the S&P 500 by 4.66% on a risk adjusted basis. Finally, the r-squared for the portfolio is 0.29, which means the portfolio does not closely track the index. From what I’ve just read, this low r-squared also indicates that I should put much weight on the beta number. I don’t normally look at these portfolio statistics. Do other value investors track these numbers?

As far as transaction, April was a quiet month. No trading occurred. However, there was quite of bit of news to read about my stock holdings. Microsoft (MSFT) drama with Yahoo (YHOO) has been interesting to follow. I not in favor of the bid for Yahoo, so the passing of the offer deadline is good news for me. However, my guess is that this story is not over yet.

Western Sizzlin also caught my attention a few times this month, but so far all the news has been bad. None of the deals (SNS and ITEX) have been completed. These transactions had a significant negative on earnings. However, I’d rather see Western maintaining disciple than seeing Sardar Biglari upping his bids.

Hopefully, May will bring some good news for my companies. In the meantime, I’ve got my eye on a few stocks and I continue to hunt for other value opportunities.

One thought on “Fat Pitch Financials Portfolio April 2008

  • May 3, 2008 at 1:33 pm

    I don’t think many (if any) value investors track any of these numbers, I know of quotes from Seth Klarman and Charlie Munger criticising beta, and the others I’ve never read any value investor write about using them.


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