Sunday, May 15, 2011

I'm beginning to wonder about Jim Jubak....

In fact, more than just beginning.

MSN was puffing him for years as "the most read investing columnist on the Web", and he was my favorite as well, both because of his clear, often self-deprecating style and his common-sense approach to the analysis of individual stocks and of economic trends. He also used to display quarterly an almost fudge-proof comparison of the returns on his model portfolio and the S&P 500. However, when I wrote this entry three days ago, the latest performance results posted on his blog were for the third quarter of 2010, and the results posted by the editors of MSN were and are "current through... September 28, 2007".

I was happy when Mr. Jubak became head of his own prefabricated mutual fund, mainly because I figured that its results would be trackable through the usual sources. The fund has existed (or been trackable, at least) for less than six months, but the results have been unimpressive. The results which he did discuss on the blog in the last year or so were also not overwhelming.

I don't have the resources to check out my guess, but it wouldn't surprise me if the "276%... return... on my Jubak’s Picks portfolio since its inception more than 13 years ago" consists mainly of a very high one-time return during the Internet bubble of the late Twentieth Century and losses smaller than those of the benchmarks in the one-time crash that followed it. In any case, the numbers are a little deceptive: It appears that my own portfolio which has existed since late 1998 would be similarly impressive if I were to calculate the returns on stocks alone, but in fact I was not holding a pure stock portfolio, and I don't think that Mr. Jubak was recommending to his readers that they hold only stocks.

For what it's worth, here are the numbers, though, comparing the performance of "Jubak's Picks" portfolio from May 17, 1997 to September 30, 2010 (from a page which used to be at but which seems to have been deleted today), with that reported by my own portfolio-tracking software for the securities marked "Investment Type - Stocks" from June, 1998 until three days ago.

 Jubak's Picks My Real-World Stocks 
 276% 262% 

Just to show that the methods of computation are comparable, within ballpark limits, his figures for the performance of the S&P 500 and mine - (Mine include dividend reinvestment; I don't know about his.) - are

 Jubak's S&P 500 My S&P 500 
 40% 43.9% 

What all of this seems to mean, within a ballpark range of accuracy, is that Mr. Jubak's impressive-sounding gain of 276% is not much better than the performance of a rank amateur's stock portfolio.

Even if I were to use the 314% number which he seems to have posted today, a comparison with the 54% number which he posted today for the S&P 500 suggests the same. As a matter of fact, if we use his new numbers, my results are a little better than his: His percentage gain equals 579% of the gain on the S&P 500 for the identical period, while mine equals 596% of the benchmark's gain for a period which overlapped his almost completely.

I still read Mr. Jubak's full-length articles more often than I read those of any other Internet source on investing. I just think that we all have to be careful about reading into the numbers more than what's really there.

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