Despite the tumultuous week on Wall Street, our portfolio weathered the storm. Since the beginning of the of the year, the value of a unit share in Moose Pond Investors declined about 2% from $13.647 to $13.375. However, the overall stock market declined 13.1% for the same period (using the Wilshire 5000 index). Our internal rate of return, which takes into account all cash flows for the portfolio, for the same period is -2.5%. Here is a detailed YTD performance report.
AIG was the big loser, dropping 93%. The stock is probably a lost cause. Good thing we didn’t but any more! The other contributors to our losses this year were Synovus Financial (-50.8%), Total System Services (-35.2%), Microsoft -28.5%), and Intel (-26.5%).
An astute reader of this blog pointed out that most of the drop in price for Synovus Financial (-50.8%) this year was a result of the spin-off of TSS in January. That’s exactly correct. Just looking at the price of SNV does not tell the whole story.  At the beginning of the year, our holdings in SNV had a value of $1,758. SNV and TSS currently have a combined value of $1,392. So the actual decline in value this year is only 20.8%.
But for the losses on AIG and TSS, we would have been in positive territory for 2008.
We do have some winners this year. They include Helmerich & Payne (+40.3). Wells Fargo & Co. (+36.2%), Amgen (+29.1%), Sun Hydraulics (+26.4%), and Lowes (+26.3%). This underscores the importance of diversification and quality in a portfolio.
Take a look at the portfolio dashboard from Manifest Investing. We may want to consider selling Bed, Bath & Beyond and Brown & Brown. At the same time, we may want to slightly increase our holdings in Microsoft, Walgreen, Transoceanic, and FactSet Research. Each of these companies have a high quality rating and high projected average return.