Copycat portfolio update

It’s been a year since I launched my experimental copycat portfolio, comprised of the largest positions of a selection of the best investors I can find without expending much effort. The portfolio has done pretty well, returning 17.3% compared to 15.8% for the S&P 500 and -13.3% for the FTSE100.

I set out the rationale for this benchmark portfolio in the initial post last year. Broadly speaking the unashamed goal of this strategy is to free-ride off the best ideas of other investors while expending as little effort as possible.

Here are the constituents with their performances (ignoring dividends) over the last year:

  1. AB Dynamics -27.6%
  2. Adobe 51.6%
  3. Alibaba 38.2%
  4. Amazon 75.8%
  5. Anglo Asian Mining -10.4%
  6. Arch Capital -16.1%
  7. Arcontech 4.4%
  8. Argentex -29%
  9. Berkshire Hathaway 6.9%
  10. Boohoo -3.9%
  11. CRH 2.3%
  12. Fevertree 2.3%
  13. Future 25%
  14. Gamma Communications 26.3%
  15. Games Workshop 63.9%
  16. Ideagen 20.5%
  17. Mastercard 19%
  18. Microsoft 41.4%
  19. MTU Aero Engines -16.5%
  20. Ocado 83.6%
  21. RELX -6.9%
  22. Rightmove -0.5%
  23. Royal Unibrew 6.6%
  24. Visa 15.9%
  25. Yougov 58.8%

Obviously this has been quite an unusual year and it seems that the pandemic was an important driver of relative performance across the holdings in the portfolio. The best performers unsurprisingly were software and e-commerce businesses, like Amazon, Ocado and Adobe. The weakest were industrials like AB Dynamics and MTU Aero Engines.

Overall, the results seem pretty decent so far, though one year is too short a period to read much into. I plan to stick with the experiment for another few years to see how it goes.

The new copycat portfolio

For the new portfolio, I’m following the same approach of selecting the largest positions of the best investors I can identify without expending effort. As I did last year I’ve spent about half an hour selecting 20 professional fund managers (mostly based on performance rankings) and 5 private investors. Most of these investors are the same as last time. I expect I could probably do better by researching this more carefully. I’m tempted to but this would defeat the point of it being as simple as possible.

Here are the new portfolio holdings. Almost half are the same as last time.

  1. Alibaba
  2. Amazon
  3. Arcontech
  4. Best-of-the-best
  5. Burberry
  6. eBay
  7. Endor
  8. Fevertree
  9. Future
  10. Games Workshop
  11. Gamma Communications
  12. Liontrust
  13. Lowes
  14. MasterCard
  15. Microsoft
  16. Netflix
  17. Prosus
  18. Royal Unibrew
  19. Sartorius Stedim Biotech
  20. SDI
  21. Sesa
  22. Somero
  23. Tesla
  24. THG
  25. YouGov

4 thoughts on “Copycat portfolio update

  1. It seems a bizarre, unbelievable goal that you invest your money while being as lazy as possible.

    The idea of free-riding off others puts you right up there with many of the great plagiarists, plunders and socialists, but you might make a minimal effort to get your choices right.

    Your current approach is not credible because if you were investing your own money, hard earned or ill gotten, you’d go beyond complete indifference to your choices.

    Liked by 1 person

    • Thanks for the comment.

      Just to be clear this is just an update on a hypothetical portfolio; an experiment meant to illustrate how a simple strategy might perform. I think of it as more of a benchmark than a strategy I would implement as is. There is more detail on the rationale in my previous post linked in the second paragraph. My actual approach discussed in the rest of the blog is quite different.

      Also, it is not that I have ‘complete indifference’ to the choices. The choices are already well-defined by the strategy ie they are the largest positions of the best investors I can find. I have tried to select these investors fairly objectively, primarily based on historic performance tables for well known funds (but also trying to include a bit of diversity across approach, geography, size etc.) I didn’t want to complicate this by trying to define precise objective criteria, filtering out the ideas I didn’t like, or doing additional research to identify more obscure investors. I’m more interested in seeing how well the minimal effort strategy performs as a benchmark without overlaying too much of my own judgment.

      More broadly, I don’t think there is anything unbelievable or bizarre about an investment strategy that doesn’t require much effort. What about passive investing (in indices)?

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  2. I am tempted to invest an equal amount in each of the shares above without any investigation so as to make the exercise seriously simple and basically see what happens when one is seriously lazy also. I already have 20% of the shares in my portfolio but will include them irrespective. Watch this space – it will be interesting.

    Like

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