2013 is behind us. It was an excellent year for stocks. Our portfolio had a total return of 30.1%. We had mostly gainers, including SYNT (+68.5%), CRR (+68.5%), GOOG (58.3%), CSX (+49.1%), and MSFT (+44.1%). Of the stocks we kept in our portfolio, we only had one loser, BRLI (-10.8%).
When we started Moose Pond Investors in October 2000, a share was worth $10.00. Today, a share is worth $23.719. Our annualized internal rate of return from October 2000 to now is 9.1%. The S&P 500, with dividends reinvested, had an internal rate of return of 8.4% for the same period.
Let’s go forward with reasonable expectations for 2014. It is most unlikely — almost certain — that we will not see the same gains in 2014 that we saw in 2013 or even 2012. Markets always revert to the mean. A downward correction in 2014 is possible. (Remember, a reasonable long term expectation for total stock market return is about 8% per year.)
We will continue to do what we have done for 13 years, look for quality growth companies that are reasonably valued. We will stay close to fully invested in equities. One of the keys to success in investing is to view down markets as a buying opportunity and to remain fully invested. There are probably people who can time the market, I have just not found any in more than 40 years of investing.
We wish everyone happy and prosperous New Year.