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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Blogger x said...

Good column -- there are very few sites commenting on Jubak, lately. But as an update, I can tell you that his "Jubax" global fund has been trailing benchmarks since its inception, and trailing the S&P500 too. As for Jubak Picks, he pulled a clever trick around 2008 -- shut down the fund completely and then smartly started buying stocks (allegedly) around the low point of the market, I think in early 2009, so that of course his returns for the next couple of years were good, as the rising tide lifted everyone. However I have to wonder about his tactic of simply telling people one day "I'm closing this fund until the next bull market", but not accounting for all his losses responsibly. However be all that as it may, the fact remains that in the last few years his returns in the Picks were mediocre at best. He also has a penchant for making very long range predictions that make him sound like a genius but which often don't pan out. Late 2011 he picked Fcx, Joy, and Banco Santander for a "second-half turnaround". You can see how those have fared -- taken together you're looking at big losses. This year some other notable turkeys were Yingli and Vivus. So with Jubak it is definitely a big caveat emptor and even smarter is to just go buy some funds like SPY or EEM.

8:13 AM  
Blogger x said...

Note -- my comment above posted Dec 2012, and also note that Jubak's article which I referenced was posted on his site. johnk

8:23 AM  
Blogger x said...

Note 2: to clarify: actually I don't believe that the Jubaks Picks is a real portfolio that holds real equities, and I have some doubts that when he says he purchased a whole lot of equities in March 2009, that he actually did so. Anyone who can clarify this please do.

8:32 AM  
Blogger Silas Marner said...

Sorry about the delay. I'm pretty sure that Jubak's Picks is not a real portfolio, but rather is a model portfolio. If I remember correctly, Mr. Jubak often adds a security to Jubak's Picks, or removes it, and then says that he will buy or sell it for his 'real' personal account three days later, since that is his policy. If Jubak's Picks and the real portfolio change on two different days, they must be different portfolios. Also, I think that there are securities which he adds to Jubak's Picks which never find their way into this real portfolio.

I suppose that you know that Jubak's Picks and his other model portfolios have their own website. If you ask in the comments there, you will probably get a more definitive answer.

By the way, where does he say that he bought a lot in September, 2009?


7:24 AM  
Blogger x said...

Your reply, which I never expected, motivated me to do some research. First, correction. My statement about him buying stock in 3/09 appears to be mistaken. I recalled that many of his Picks stocks were dated 3/09, but that was a few years ago (since then he's had turnover in that portfolio). I found this essay:
at his Picks site.
The key date for the Picks appears to be December 30, 2008. And in fact if you entered that date in the search bar, it returns a whole lot of brief posts representing stock picks. In other words, he tried to pick the bottom, and he was pretty close. Now, of course, normal people did not have the kind of money to go and buy 100 shares of each of these on 1 day, nor would most of them have risked doing so in the midst of a raging bear market that actually did not bottom until March 2009!
Anyway, I have noticed that his updates on his Picks results have become few and far between. MSN currently posts a small table that is misleading because it makes it look like his Picks is beating the averages for the last 5 years -- based on ending date of Dec 2011! A little out of date??
As you mentioned too, his Jubax has been disappointing when measured against peers, and I had also bought a number of the individual stocks he recommended from that one.

6:07 AM  
Blogger x said...

Another canard has been Jubax Global fund. I recently redeemed shares. A look at performance there shows that it is totally flat since inception -- started at $10/share, currently at around $10/share NAV. But it is worse for most investors, because the fund surged to 11-ish a few months after inception and that is the level I'm sure at which most investors bought -- I bought some there, so my cost is about 11 and I cashed out at 10. BLoomberg rates the rank of Jubax at about 800 out of 900 global equity funds.

6:32 AM  
Blogger ek bharateeya said...

I am also one of the readers of Jubak's column on MSN; however, it appears that his numbers were inflated, or to give the dude some credit, without any transaction costs. When the rubber met the road, and he started his fund - I knew there was no way I was going to invest in it. And the events bear me out.


9:53 AM  
Blogger x said...

Then you were smart, e.b.

9:41 AM  

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