Historical Results and Commentary
May 11, 2000
Holdings
|
May-00 |
|
|
1 |
PFE |
|
2 |
UN |
|
3 |
BBV |
|
4 |
NKE |
|
5 |
LLY |
|
6 |
MMM |
|
7 |
IBM |
|
8 |
CAT |
|
9 |
JNJ |
|
10 |
DELL |
|
11 |
MCD |
|
12 |
FNF |
|
13 |
MSFT |
|
14 |
BRK-A |
|
15 |
AMGN |
|
16 |
WMT |
|
17 |
NOK |
|
18 |
AAPL |
|
19 |
P |
|
20 |
WB |
Performance of Individual Stocks
For last 3 months
|
May-00 |
|
|
FNF |
17.70% |
|
P |
36.91% |
|
CAT |
8.68% |
|
NKE |
27.57% |
|
LLY |
21.86% |
|
MMM |
4.28% |
|
IBM |
-9.37% |
|
BBV |
-3.35% |
|
JNJ |
11.13% |
|
DELL |
21.18% |
|
MCD |
9.28% |
|
PFE |
22.53% |
|
MSFT |
-32.09% |
|
BRK-A |
8.28% |
|
AMGN |
-1.60% |
|
WMT |
0.02% |
|
NOK |
6.23% |
|
AAPL |
-5.48% |
|
UN |
-3.59% |
|
WB |
4.58% |
Total Increase (Decrease) since
last quarter: 7.24%
Additions: None
Subtractions: None
Commentary: Well, 3
months into this little experiment and things seem to be off to a good
start. I’m up just over 7 percent,
better than the Dow, Nasdaq,
and S&P 500. Of course, I really
don’t care, because 3 months to an investor means about as much as 3,000 years
to a geologist (I am a geology student, and 3,000 years is nothing in geologic
time). It seems that the going trend in
the market would be to project this 7.24 percent per quarter rate out to
infinity. Assuming that the
Of course, such logic is flawed in so many ways, but I feel Wall Street has forgotten the necessity in creating reliable and robust time-series data for making projections. Most things that grow, whether they be sales, brand names, children, romances, or wisdom, tend to grow in fits and starts. The problem with using too little data to project the future is that each upward molehill looks like a mountain when projected too far into the future, and each downward blip becomes a bottomless pit. This is something that has confused me to no end about the stock market. If stock prices are supposed to provide the best guestimate for the intrinsic value of a company (assuming an efficient market, which I do not!), then how can they fluctuate so much over such brief periods of time. Is Microsoft really 32 percent less valuable now than it was 3 months ago, or is Nike really 27 percent more valuable now than it was in February? Of course not. Perceptions about intrinsic value change, but my belief is that intrinsic value does not in itself change very much. It is the process of trading that creates volatility, not the fundamentals of the market. Do other major asset classes such as housing, real estate, or artwork and other luxuries change in value as much as stocks? Yes! But such changes seem more muted because of their gradual meander.
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Historical Results and Commentary