Studies of Life

Learning by doing.

Piotroski Return In the First 12 months: 32.1%

26 August 2014 by Jim

As you guys know, I’ve been investing according to the Piotroski stockpicking methodology. It’s now been 1.1 years since I started, and my total return is 37%. I started in June 2013 and my annual return is 32.1% for the 2013/2014 period.

That is beyond what I could have expected as a beginning investor. And the result tells me three things:

  1. Piotroski‘s stockpicking method is a gem
  2. 2013/2014 was probably an outlier
  3. Evidence-based scientific investing by a beginner like me beats 99% of fund managers

Why would the last 12 months have been an outlier? We’ve seen a big run-up in the German market (which is where about half my portfolio is located) and also a pretty good run for the US market. I am not sure if the next year or so will be just as good. But if I can continue to beat the indexes, I know I’ve done something right, so it doesn’t really matter if there are a few ups and downs (as there certainly will be).

Catching up with me, now that I have about a 14% head start relative to the DAX, is going to be difficult, even with a few corrections. I haven’t yet seen any real market crash, so I’m also kind of curious how something like that would turn out. As you know, however, I have stop loss orders on all my stocks, usually around the -10% to -20% levels, so even if the market crashes entirely, the drawdown for me should not be much bigger than 20% overall.

On to the next 12 months! I’ll keep you posted!

How were your past 6 or 12 months in terms of investing? Let me know in the comments!



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