Seth Klarman and the Baupost Group
Seth Klarman is one of the all time great value investors, having crushed the market indices since the early 1980's. He's famous for his deep bottom up research and his Benjamin Graham "cigar butt" style of finding value. His thoughts on markets are so revered that his out of print book Margin of Safety sells for hundreds of dollars on Amazon.
Our backtested strategy cloning his top 20 positions would have beaten the S&P500 by around 4 % points per year going back to 2001. This kind of outperformance would have turned a $10, 000 investment into $51, 000 compared to $26, 000 in the S&P500. You can track his holdings with real money here.
The backtested model portfolio is here.
If you're like me, you are excited by the outperformance but probably wondering how to implement this type of portfolio without getting bogged down in trading fees and spending hours tracking, building, and maintaining the account. If you've done any investing in the past, you know that there are fees for each trade which would usually cost around $10 per trade. In this example, running a 20 stock portfolio would cost about $200-400 in trading fees each year to track and maintain depending on the amount of portfolio turnover each quarter.
Our backtested strategy cloning his top 20 positions would have beaten the S&P500 by around 4 % points per year going back to 2001. This kind of outperformance would have turned a $10, 000 investment into $51, 000 compared to $26, 000 in the S&P500. You can track his holdings with real money here.
The backtested model portfolio is here.
If you're like me, you are excited by the outperformance but probably wondering how to implement this type of portfolio without getting bogged down in trading fees and spending hours tracking, building, and maintaining the account. If you've done any investing in the past, you know that there are fees for each trade which would usually cost around $10 per trade. In this example, running a 20 stock portfolio would cost about $200-400 in trading fees each year to track and maintain depending on the amount of portfolio turnover each quarter.
Thanks to innovation in the financial-tech industry, there is now an easy way to track portfolios such as Warren Buffett's in the real world without paying very much in trading fees all with the ease of clicking one button.
Let me introduce you to Motif Investing, a financial tech company that is working to democratize access to investing.
You'll need to open an account with them first as you would with any broker before you can buy the Warren Buffett model portfolio or any other of the thousands of motifs on the platform.
We want to be clear that we have no direct relationship with MotifInvesting.com, we simply love the product they have created because it has allowed us to run various portfolios efficiently and at low cost. The only benefits we get from you signing up on the platform are a credit on our own trading fees as well as a $1 'Creator Royalty' credit each time you purchase a portfolio that we created.
Here's a little more on how this works. If you want to invest alongside Warren Buffett or any other of the Gurus we follow at 13F Investor:
1. Sign up for Motif Investing. (the portfolio is visible without signing up if you choose to simply view it and use a different brokerage company)
2. Follow our link to the 13F model portfolio that we created.
3. Click buy in order to purchase the whole portfolio for $9.95 ( the usual cost of buying only 1 stock or ETF on other platforms)
4. Re-balance the portfolio each quarter automatically. You'll get a notification from Motif if a portfolio that you own is updated by the creator.
Pretty easy?
Disclaimer: We are not your investment advisor. We are an informational blog seeking to educate investors on ways to manage their own money. Due to regulations, we do not give any specific individual investment advice. YOU are absolutely responsible in every way for deciding what to invest in and should consult an investment advisor if and when you feel you need to.
Comments
Post a Comment