Given the amount of effort that went into research and analysis this
year, the results for 2005 were a little disappointing. On a
cash flow basis, we finished with a very small gain. While
that is better than losing money, we did not beat either the
S&P 500 or the Russell 2000. They were up 4.9% and
4.6% respectively. On a positive note, we have soundly beaten
the S&P 500 over the past five years and we are almost even
with the Russell 2000.
The table and chart below show the annual return for Moose Pond
Investors over the past five years. The “Stocks
Only” column only shows the return of the stocks we
held. The next column, “Stocks &
Cash,” includes cash awaiting investment and monthly
brokerage fees. As a result, the return is slightly
lower. As our portfolio holdings grow larger, cash on the
sidelines and fees will have less of an impact on overall portfolio
return.
|
Stocks
Only |
Stocks
& Cash |
S&P 500
|
Russell 2000
|
Unit
Value |
|
| 2005 | 0.3% | 0.1% | 4.9% | 4.6% | $13.097 |
| 2004 |
16.1%
|
13.8%
|
10.9%
|
17.0%
|
$13.256
|
| 2003 |
35.1%
|
23.1%
|
28.7%
|
47.3%
|
$11.802
|
| 2002 |
-23.4%
|
-19.1%
|
-22.1%
|
-20.5%
|
$9.707
|
| 2001 |
37.9%
|
13.8%
|
-11.9%
|
2.5%
|
$11.970
|
| 3-year | 10.4% | 9.3% | 12.4% | 22.1% | |
| 5-year | 8.1% | 7.1% | 0.5% | 8.2% |
The annual returns for Moose Pond Investors are calculated using
internal rate of return (IRR). This method is more precise
because it
looks at actual cash flows. It better accounts for partner
investments
and market fluctuations throughout the year. We could have
calculated
annual return using the change in unit value from year to
year.
However, we opted for the more accurate IRR method.
The two
indices that we have been using for comparison, the S&P 500 and
Russell 2000, show the total return for each year including
dividends.
These return calculations do not take into account the actual cash
flows for Moose Pond Investors.