Stock Results

98 stocks were purchased by Dr. Wertz from 2000 through June 2010. The average stock had a return of 39% per year.

Past performance does not guarantee future performance.

Interpreting the Stock Results Tables


Overview of the Stocks Purchased by Dr. Wertz

Dave Wertz is an international value investor who looks anywhere in the world for stocks selling for much less than their intrinsic value. However, most companies he purchased are small and located outside the US – because there are many more small companies than large companies and there are more companies outside the U.S. than in the U.S. In additional, large companies like GE or Microsoft have thousands of professional investors looking at them every day. This intense attention keeps these stocks from getting "ridiculously" low priced. Small companies, especially outside the U.S., get little or no attention from professional investors. Thus, they are far more likely to have the "ridiculously" low prices relative to their true value that Dr. Wertz seeks.


Stocks Purchased and Their Annual Returns

Company Name

Purchase Date Holding period (days) Holding Period Return (%) Geometric Average Annual Return (%)5
Lung Kee 9/3/01 838 265.6 75.7

London Pacific

10/8/01 119 23 88.7
Fletcher Challenge Forests 2/1/02 585 98.4 53.8
NextWave Telecom 2/5/02 539 -64.7 -49.3
Barlo Group 2/19/02 241 5.2 7.9
Chung Tai Printing 4/25/02 823 9.9 4.3
TungTex Holding 4/25/02 1213 89.7 21.2
Jackin International1 5/2/02 373 -41.2 -41.5
Reed Executive 5/2/02 417 -9.4 -9.2
London Pacific 7/23/02 65 108.1 >200
World Acceptance 7/15/02 472 203.5 136.0
Aeon Credit1 9/27/02 641 100 48.4
Arts Optical 11/06/02 1177 46.2 12.5
Chase Corp 10/7/02 844 73.9 27.0
Koenig & Bauer 10/15/02 1176 180 37.7
Jackin International1 11/15/02 209 9.0 16.3
Rig Tenders 12/7/02 909 163.2 47.4
Peoples Food Holding 5/16/02 683 76.9 35.6
Sparebank Vestfold 10/25/02 307 -4.6 -5.2
Oriental Watch 12/18/02 257 69.5 115
Ionics 12/27/02 633 97.3 48.0
Artwork Systems 1/12/03 395 362 311
LA Group N shares1 1/15/03 776 504 133
African Bank Investment 6/20/03 551 222 117
Coral Products 6/21/05 432 -40 -35.0
Aeon Credit 1 4/20/03 893 112 34.7
Chung Tai Printing 1/03/03 923 5.4 2.1
Kin Yat Holdings 4/24/03 333 12.2 13.5
LA Group N shares1 1/15/03 730 422 131
Rig Tenders 1/03/03 913 167 48.1
Silentnight Holdings 3/11/03 264 44.4 65.6
Whitehead Mann 11/30/02 433 201 153
PT Berlina 3/10/04 472 -15.6 -12.3
Merck Tbk PT 11/16/04 484 -2.0 -1.5
Friedmans Inc. 8/15/04 278 2.3 3.0
Chaoda Modern 1/06/05 425 73.7 60.7
Ming Fung Jewelry 6/20/05 574 19.1 11.7
Orient Power 7/7/05 328 -100 -116
Ionics 7/8/05 333 141 162
SKF B shares 5/31/05 80 17.0 104
Lee & Mann 12/22/05 279 48.0 67.0
Food Empire 2/14/06 30 2.7 37.7
Asia Zirconium 3/05/06 71 68.5 >300
Tak Shun Technology 7/07/05 306 -50.3 -56.6
Chanco International 6/13/06 643 55.8 28.6
139 Holdings 7/20/06 35 96.4 >200
Solid Group 7/19/06 1036 43.6 13.6
Broad Intelligence 8/15/06 989 -14.6 -5.4
Kantone Holdings 7/14/06 495 14.3 10.4
KTP Holdings 11/7/06 869 -18.9 -9.1
Ming Fung Jewelry 10/26/06 115 94.8 >200
China Packaging 11/03/06 1006 -44.8 -19.4
Wing Lee3 1/15/07 1258 3.9 1.1
W Holding 8/7/07 358 -5.1 -5.1
AMBAC 12/24/07 532 -60.8 -38.5
Sinotronics 11/18/07 702 -54.0 -27.4
KXD Digital 3/15/08 517 -65.1 -47.6
SCS Upholstery 1/18/08 163 -100 -200
Sinobest technology 8/20/08 135 -12.5 -30.4
Jolimark Holdings 9/20/08 185 -23.4 -40.9
Tongda Group 2 9/25/08 418 123.8 102.2
Hang Ten Group 10/08/09 238 -7.6 -11.0
Sinotronics 10/08/08 419 63.0 53.1
Champion Technology3 10/16/08 628 -12.8 -7.2
Chanco Group3 10/31/08 607 1.8 1.1
Hongwei Technology2 11/14/08 472 84.6 61.8
China Flex. Pack.3 10/30/08 605 86.4 61.8
Datronix3 11/14/08 501 121.2 78.3
Northgate PLC 11/21/08 283 -17.0 -30.1
First Natural Food2 8/01/05 1337 -21.5 -6.0
Art Textile 3 9/02/06 1314 -38.6 -12.8
Fujikon 11/10/08 271 62.5 92.1
Cacola Furnature 11/24/08 185 23.8 52.0
First Natural Food1,3 12/02/08 385 -100 -100
Art Textile1,3 10/10/08 555 7.1 4.6
China Packaging 3/11/09 273 -100 <-150
China Hongxing3 3/17/09 469 37.0 27.7
Sino Techfibre 4/17/09 74 100 >200
Foreland Fabritech3 4/18/09 347 12.3 12.9
C&G Industrial 4/16/09 92 83.8 >160
China PowerPlus 4/26/09 78 22.0 >44
Sinotronics 5/11/09 204 191.2 >300
Herald Holdings 3 6/5/09 359 114 171.5
Pioneer Global 3 6/5/09 359 23.5 24.9
China Flex. Pack. 1,3 6/15/09 350 40.2 42.2
Hirco PLC 3 6/16/09 329 46.8 53.0
Pokfulman Devel.3 8/25/09 308 60.1 75.1
Sinotronics 1 9/01/09 48 -8.9 <-20
Safety Godown 3 8/28/09 303 11.2 13.7
Champion Technology1,3 10/03/09 291 -21.3 25.9
Datronix1,33,4 10/06/09 267 59.4 ...
Chanco Intl 3,4 10/15/09 258 1.4 ...
Bright World Precision3,4 12/02/09 210 42.1 ...
China Haida3,4 1/29/10 152 -13.9 ...
Merchant House4 2/5/10 145 -31.3 ...
RC Group 4 2/5/10 145 -42.0 ...
Amer Metal & Tech4 3/20/10 81 -31.3 ...
Sino Techfibre 4 3/23/10 98 -8.0 ...
Footnotes:
  1. When more stock in a company that is already owned is purchase 3 or more months after the previous purchase or at a price that differs by more than 30% from the previous purchase it is treated as a separate purchase. This only happens when something important has changed, such as the stock's price going down significantly.
  2. Some but not all of the original position has been sold. The part of the position still held is valued as of 6/31/10. In calculating the holding period of stocks with only part of the original position still held the holding period days reflect the fraction still held. For example, if half of a position is sold after 100 days, then the holding period 100 dyas after the sale be calculated to be 150 days.
  3. None of the original position has been sold. Position is valued as of 06/30/10.
  4. So recently purchased that annualizing the return would not be meaningful. In calculating the average annual return the holding period return was used.
  5. The geometric average annual return is recognized by authorities as the correct way to calculate the annual return on investments.
        
    Geometric Average = (1 + Holding Period Return)1/N - 1
        where N equals the holding period in years.

    The geometric average is always less than the arithmetic average that one learned to calculate in high school. For example, if a stock goes up 50% in the first year and goes down 50% the second year it has lost 25% of its value yet the arithmetic average return is 0.0%. The geometric average return of -13.4% is a much more accurate reflection of what happened to the stock's price.

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Interpreting the Stock Results Tables

Past performance does not guarantee future performance.

The table above give the investment results for individual stocks. Of greater interest is the return on Dr. Wertz's portfolio. Dr. Wertz does not have the records needed to calculate the average return for his entire portfolio. He does, however, have the records to do this for his IRAs. For the period 1/1/2000 to 6/31/2010 his IRAs are up 370% while the market is down 16%. This translates into a geometric average annual return of 15%/year for Dr. Wertz's IRAs. While 15%/year is impressive when compared to the market's -1.5%/year return, it is very different from the 39%/year return on the average stock.

Some of the reasons for differences between the return as measured by the average stock and the geometric average return for the IRAs.

  • A standard average, which was used to calculate the average stock's return, is always higher than the geometric average.
  • The average return on stock's purchased has meaning only when applied to stock investments. However, the IRAs were on average only 56% invested in stock during this time.
  • A portfolio's return depends not only on the securities in it but also on the relative amounts of these securities. The risk of a security is one of the criteria used in determining the amount of a security to purchase. This weighting process can reduce portfolio returns below average security returns.

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Companies for which too few shares were purchased to have an impact on portfolio return1
Company Name Purchase Date Holding period (days) Holding Period Return (%) Annual Return (%)
Ken Holdings 2/07/06 119 11 38
Glory Mark 7/10/06 438 60.1 48
Lipo Gen. Insurance 4/04/07 498 41.3 29
Note:
1. Only a very small amount of money was invested because after the initial, small purchase the stock's price increased above the price Dr. Wertz was willing to pay. These stocks were not used in calculating the average return.

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During 2006 and 2007 Dr. Wertz was unable to find stocks that meet his time tested and very successful selection criteria. To test alternative criteria, he put relatively small amount of money into the stocks listed below. Events showed that he should have stuck to his proven stock selection process. These stocks were not used in calculating the average return.


Stocks purchased to test modifications to to the standard selection method
Company Name Purchase Date Holding period (days) Holding Period Return (%) Annual Return (%)
Novistar Financial 8/21/07 76 -42.7 -93.6
United Food1 8/22/07 496 -68.2 -43.0
Champion Technology1 8/24/07 494 -80.4 -50.0
Amalgamated Appliances 8/27/07 409 -55.5 -48.5
Metropol. Hold. 9/10/07 402 -41.6 -38.6
Bank United 11/29/07 301 -86.3 -91.0
Bank United 11/29/07 301 -86.3 -91.0
Note:
1. The position is still held and was valued as of 12/31/08

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