Why won’t those investors with lots of Twitter followers present how well their portfolios are performing? Many discuss their holdings and their strategies. But rarely will they review their returns. I’ve asked several of these investors to let their followers know if their investments are driving good returns. If not, then these followers might be better off buying an index fund with even better performance. That issue is the essence of a recent Twitter exchange I had below with one of those investors who has thousands of followers, including me.
To practice what I’m preaching, I too need to address the question of performance for my taGMan portfolio. If you recall, taGMan is designed to capture long-term growth due to the disruptive shift to electric vehicles and autonomous mobility solutions.
taGMan represents seven stocks in the portfolio: Tesla, Apple, Google, Microsoft, Amazon, Nvidia, and General Motors. The returns of these stocks, along with the returns of two comparative ETFs, are highlighted in the above chart.
Over the past five years, the taGMan portfolio has returned 51.4% per year. Comparatively, the technology focused QQQ ETF returned 21.9% per year over the same timeframe, while the Vanguard S&P 500 ETF (VOO) experienced a 13.8% per year return. Over the past 2 years, the taGMan porfolio trounced both QQQ and VOO with a 71.5% annual return versus 20.2% and 14.0% annual returns respectively. Last year, taGMan continued to beat the returns of both QQQ and VOO (taGMan 14.4%; QQQ 2.7%; VOO 10.6%).
This year is a very challenging period for U.S. equities in general. taGMan is down 16.8% year-to-date. The NASDAQ QQQ has declined 17.2%. The Vanguard S&P 500 ETF is down 11.1%. If you’ve been following this newsletter, you’ll recall from an update that I liquidated 40% of the taGMan portfolio on January 24 of this year. I feared the market was reaching “peak equites” without any sustained useful correction. While it’s never wise to try to time a correction, having an ability to sleep better at night is also a useful goal. I was also influenced by Jeremy Grantham who recently wrote, “we have the most exuberant…even crazy investor behavior in the history of the U.S. stock market. The U.S. market…has the greatest buy-in ever…that stocks only go up, which is surely the real essence of a bubble.”
Tesla has declined 22.4% this year. Yet, the annual return on my Tesla holdings are still an astounding 190.5% per year. Similarly, Nvidia is down 24.1% this year. But the stock has returned 58.7% per year for me over the past five years. I continue to be very bullish about the long-term return prospects of each stock in the taGMan portfolio - even for Amazon which is off 14.3% this year and declined 10.2% last year. As long as I can continue to beat important indexes like QQQ and VOO, taGMan will remain a key tool in my effort to profit from the disruption occurring in automotive.
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Disclaimer
TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.