The spread between the Undervalued and Overvalued Screens* was larger than usual in 2011. For the year, it was +16.64% due primarily to the poor performance of the Overvalued. The Undervalued had a mixed year with good results in the 1st half with poor results in the 3rd Quarter and an ok 4th Quarter. The Overvalued did very poorly in the first 3 quarters and came back 5 1/2 % in the 4th.
For the 7.25 years since inception the returns are +6.16% pa and -2.53% pa relative to the S&P 500 for a spread of +8.69% pa. Relative to our universe the relative returns are +3.21% and -5.23% pa respectively.
* The criteria for the Undervalued screens are 3rd & 4th Quartile Valuation Return and 4th Quartile of E/M. The Overvalued are the mirror opposite. This is explained with the seven year record to September 2011 is shown below.
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