6Lun·

What happened to €100,000...

Or you could also say "Any monkey can beat the market" 😅

ttps://www.finanzen100.de/finanznachrichten/wirtschaft/wie-schimpansen-mit-dart-pfeilen-zu-den-besten-bankern-der-wall-street-wurden_H1960490147_546306/

At the end of the 3rd quarter, it's time for another update:

100,000€ invested from January of the respective year - B&H:

2022 Total return +43,526.00€ TTWROR 35.05% https://getqu.in/tcIuml/

2023 total return +€34,388.58 TTWROR 73.32% https://getqu.in/JjIr8V/

2024 Total return +€ 17,945.95 TTWROR 18.76% https://getqu.in/euJ994/

Highlights / Lowlights 2022:

$MELI (+1,25 %) +142% / $META (+0,53 %) +141% / $SAP (+2,08 %) +100% / $RBLX -15%

Highlights / Lowlights 2023:

$RDC (-0,7 %) +104% / $PAYC (+0,25 %) -40%

Highlights / Lowlights 2024:

$ZAL (-2,72 %) +76% / $9988 (+1,47 %) +54% / $RKT (-1,82 %) -10% / $KTN (+0,18 %) -18%

For me, my 100k deposits are a nice (long-term) experiment. End of 2021 as #100kchallenge initiated for the year 2022. After the deep red 2022 year, I started the 2nd round in 2023 with only a few motivated people. Well, and in 2024 I started again on my own.

Now it's time to start thinking about 2025... Let's see which shares will go into my 2025 portfolio...🐵🐵🐵🐵

www.finanzen100.deFinanznachrichten und Infos zu Börse und Aktien - Finanzen100

13 Comentarios

Kenobi@Option-Wan-Kenobi

6Lun

How do you select your individual positions?
Do you sell them again at the end of the year?

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TomTurboInvest@TomTurboInvest

6Lun

@Option-Wan-Kenobi You can call me 🙉 🤣
No, joking aside - my selection or decision to enter the market is strongly driven by the chart, even if many here dismiss technical analysis as reading coffee brew. I also look at the stocks fundamentally, but that's just a supplement to check whether there's a red flag for me.
I just let these portfolios run, it's a test compared to my main portfolio, where I tend to trade stocks in the short term (weeks to months). I can generate relatively more with less capital (~80k) and a corresponding turnover. I have around 200 trades per year.
But I often choose the same stocks as in these 100k portfolios, just on a shorter time horizon.

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Kenobi@Option-Wan-Kenobi

6Lun

@TomTurboInvest All right, thanks!
How many shares do you invest in on average per year? And what average return have you achieved p.a. with the test portfolio?

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TomTurboInvest@TomTurboInvest

6Lun

@Option-Wan-Kenobi I described the return in the article above. In 2024 it was 8 - and if I look at my main portfolio, there are usually no more than 10 that I trade at the same time - as in my bio - 85% of the portfolio is rather conservative, and I trade with the remaining 15% - currently that's around 10 stocks.

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Kenobi@Option-Wan-Kenobi

6Lun

@TomTurboInvest I completely overlooked it. Thanks for the interesting article!

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Epi@Epi

6Lun

Can you add a benchmark to classify your results, e.g. the MSCIWorld? Somehow they don't tell me much about the overarching thesis.

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TomTurboInvest@TomTurboInvest

6Lun

@Epi For comparisons, I have given the TTWOR for each portfolio so that it can be compared with indices.
There are countless publications on the thesis with vast amounts of data. Even Warren Buffet has often discussed the Monkey Test.
Here is also a link to it https://www.forbes.com/sites/rickferri/2012/12/20/any-monkey-can-beat-the-market/

The core statement, which is also statistically verifiable: Any portfolio of 30 stocks randomly selected from the list of 1,000 stocks is bound to include mostly smaller companies. Since small companies outperformed big companies, this is how Malkiel's monkey portfolio beats the market.

In the end, as always, it is a risk/reward ratio. The broad market is less risky, but costs some performance.

Since I don't choose my stocks at random, my portfolios don't actually meet the Monkey Test, but they still show that you can perform well with a small selection.

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Felix@Investor_in_Jogginghose

6Lun

The result: on average, the monkey portfolios outperformed the market by 1.7% each year. On average, 98 monkeys achieved higher returns in one year than the 1,000 largest shares in the USA on average.

98 out of 100 random monkey portfolios beat the market? How is that possible?

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TomTurboInvest@TomTurboInvest

6Lun

@Investor_in_Jogginghose the key message of the test is that random selection methods can often perform as well or better than the decisions of experts.

The logical explanation for this, or you could say trick, lies in the distribution between small and large caps. Due to the equal weighting in this test, it is very likely to beat the index/market, as smallcaps have a higher long-term average return than largecaps.
Since there are more smallcaps than largecaps, a random selection tends to contain more smallcaps.

You can see from me that this works 🐒🙉, the majority of my 100k portfolios do not contain any of the "large caps" that many people have in their portfolios🤣

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Felix@Investor_in_Jogginghose

6Lun

Then they would have done worse in today's world. The performance only came from the heavyweights.

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TomTurboInvest@TomTurboInvest

6Lun

@Investor_in_Jogginghose even today there are enough small caps that outperform the heavyweights, but since their market weighting is very small, the big ones pull the market.
If you happened to have the same weighting of small caps in your portfolio as the heavyweights, I'm not sure you wouldn't outperform the market today...
That's exactly the reason why the monkeys have mostly beaten the market over the last 50 years. Because heavyweights also existed before the big tech era.
The weighting brings the performance!

Compare, for example, the $VDEV where all the heavyweights are +15% with my "monkey selection" +17%

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Felix@Investor_in_Jogginghose

6Lun

@TomTurboInvest I don't actually have an Etf, but around 30 individual stocks. Smaller stocks are also highly weighted, such as Rational and Dominos Pizza. However, NVIDIA and Amazon have contributed the most to my outperformance.

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TomTurboInvest@TomTurboInvest

6Lun

@Investor_in_Jogginghose Nvidia was certainly an exception for a large cap this year, but the annual performance of Amazon or other heavyweights such as Apple and Alphabet was nothing that you wouldn't find in the small cap sector. Ultimately, it always depends on the composition.
The statistics speak for themselves, there are far more small caps than large caps. And doubling market capitalization, for example, is simply easier with 200 million than if you are already worth billions.
NVIDIA has performed extremely well this year, you could say it has run ahead. Let's see how it goes in 2025, in the worst case it will "lag". 🔮🤷🏽‍♂️

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