Our first week
It’s now been five full trading days since we published our inaugural set of monthly Prime picks and Select picks. Of course, a week is just a blip in the lifecycle of an investment strategy, but we’re just too excited about this whole operation to not take a look back at how our picks of played out since last weekend.
First, in case you hadn’t noticed, the market in general was up (by our calculations, SPDR’s S&P 500-tracking exchange traded fund (“ETF”), SPY, was up 4.17 percent this week). We’ll explain more in a future post why we think the S&P 500 is a relevant benchmark for our investment strategy, in particular, but in general it’s uncontroversial to say that it’s a widely followed measure of the overall performance of U.S. equities (see, e.g., the mast head of CNBC.com, which reports the S&P’s performance in real time). Besides that, we think it’s a reasonable first guess at what most investors “could readily get” investing more or less “passively” (either through any number of mutual funds that use the S&P 500 as a benchmark by way of, for example, their 401(k) accounts, or through ETF’s on their individual investment accounts). The S&P 500-tracking SPY ETF is, after all, the single largest ETF in the world, with over $300 billion in assets and average daily trading volume of 60.6 million shares as of February 2020, according to ValueWalk).
That the market was up is well and good and we should all be pleased about that (if you have a 401(k), it’s very likely it performed similarly this week). But our objective here at Stoney Point is to do better than that. We fundamentally believe regular investors can systematically do better than just “buying the index,” and that belief is the very premise of this newsletter.
This week, at least, we did exactly that. By our calculations, our Select picks—which we offer free to literally anyone—outperformed the market by 227 basis points, appreciating 6.44 percent. Better yet, our Prime picks—available to subscribers—outperformed the market by 549 basis points, appreciating 9.66 percent, more than double the market’s performance.
Of course, there’s a lot of ballgame left in May. On top of that, it’s earnings season and the middle of an unprecedented viral pandemic, so things are arguably moving a little more than normal and we aren’t extrapolating these results out into the future (though it’s worth noting that, a priori, earnings results and pandemic-related developments could have amplified performance in either direction, good or bad). In any case, needless to say, we’re feeling encouraged.
P.S. Don’t forget to follow us on Twitter (@StoneyPointCap).
Select picks (week 1)
Prime picks (week 1)
Note: we corrected a typo to add the word “days” to the first sentence above on 5/17/2020.
