The 2011 Buy List
The 2011 trading year has come to a close. I’m happy to report that our Buy List had another market-beating year although this one was close. The 20 stocks on the Crossing Wall Street Buy List gained 0.89%. In contrast, the S&P 500 was unchanged at 0.00%. (Splitting out the decimals, the S&P 500 lost 0.00318%, but I round off at two decimal places.) This is the fifth year in a row that we have beaten the market.
Including dividends, our Buy List gained 2.75% compared with 2.11% for the S&P 500. The dividend yield for the Buy List worked out to 1.84% while it was 2.11% for the S&P 500. For the year, our beta was 1.0340.
Over the six-year history of the Buy List, we’ve gained 37.72% to the S&P 500’s 14.34%. Our annual turnover has been just 25% which means we’ve only changed five stocks per year. The six-year beta is 0.9420.
I’ll restate the rules of the Buy List. I choose a portfolio of 20 stocks at the beginning of the year. After that, the Buy List is locked for the year and I can’t make any changes until the following year. For tracking purposes, I assume that the Buy List is a $1 million portfolio equally divided among the 20 stocks. You can check the performance of the Buy List anytime at our Buy List page.
My goal is to show investors that by choosing stocks wisely and by sticking with high-quality stocks, they can beat the market—and that’s exactly what we’ve done. I try to beat the market by a few percentage points and to do it with less risk.
Our top-performing stock in 2011 was also our highest yielder. Reynolds American ($RAI) stock gained 26.98% in 2011, and with dividends it was up 34.44%. Other big winners were Abbott Labs ($ABT), Jos. A. Bank Clothiers ($JOSB) and Nicholas Financial ($NICK).
Here’s how each stock performed:
Eddy Elfenbein is a Washington, DC-based speaker, portfolio manager and editor of the blog Crossing Wall Street. His