This site is the home of the model portfolio web logs of the very best of the Marketocracy model portfolio managers: the m100 and the mFOLIO Masters.
Marketocracy developed and launched the most realistic stock market trading simulation on the web in mid-2000 to enable portfolio managers to manage model mutual funds and establish their own personal track record to prove their investment talent. Our goal was to find the best portfolio managers in the world and to develop an investment research process that would challenge the $7 Trillion mutual fund industry and deliver the kinds of consistent outperformance we wanted for our families and our clients.
Marketocracy's website at www.marketocracy.com allows portfolio managers to trade U.S. trade-able equity securities in real-time with virtual money. Since 2000 we have executed millions of trades for over 100,000 people from 130 different countries managing model portfolios.
The m100
After a year of tracking performance at Marketocracy, we began selecting 100 model portfolios each month on various historical metrics and held them during the next month to see how they would perform. We called them the m100. After each month, when we saw things in a manager's performance we didn't like, we replaced them with someone we liked better.
To measure whether or not we were doing a good job of selecting the m100, we equally weighted all 100 model portfolios and calculated the m100 Index and measured the returns of the m100 AFTER they were selected.
As you can see from the chart below, the m100 Index has more than tripled the return of the S&P 500 Index Total Return (with dividends reinvested) with a beta of only 0.86. Significant enough to make a big difference. More importantly, over the last 6-1/2 years the m100 Index beat the S&P 500 Index during 62% of the months and if you held the m100 Index for a year, the m100 Index beat the S&P 500 Index 74% of the time. That's over a period that has seen lots of changes: the war in Iraq, record low interest rates, record high oil prices, housing booms and then busts with the sub-prime implosion and now the credit crisis. We believe this is proof that we have built a process that attracts and finds great portfolio managers and a management process that helps us know when to invest in them.
The m100 Index
The mFOLIO Masters
For the m100 we select a team of 100 because although we may be wrong on any individual m100 model portfolio, we have confidence that as a group they will beat the market. mFOLIO Masters are m100 members that we have evaluated enough that we believe their model portfolio can stand alone. As we gather more investment decisions by a manager, we gain greater confidence in our ability to evaluate their investment skill and to assess when to invest in their model portfolio.
On their individual model portfolio web blogs, you'll find sections that will help you understand each of these managers' model portfolio better. We provide you with some of the same proprietary tools that we developed to evaluate skill and assess timeliness for investing in a manager's model portfolio.
The Performance section gives you the same kind of performance information you would see for any mutual fund; however, very importantly, the track record we display is on a single manager instead of a fund. Most investors don't realize that the mutual fund performance information they are given was generated by a different fund manager or even several different managers than the manager that is currently managing their mutual fund.
The Portfolio section shows the composition of each model fund, by sector, by style, by top holdings, and turnover percentages.
The Timelineness section shows some of our most important tools. The performance zone chart shows Where a manager made their money (Gains) by sector and market capital categories so you can see where their strengths and weaknesses are as an investor. The chart also shows you where the manager is currently invested (Weights) so you can assess whether they are playing to their strengths (in their zone) of not. When a manager is investing out of their zone, it MAY be a good time to change managers. The Winning Ratios give you insight into How a manager made his money: whether they are a good stock picker (Winning %) or a good trader (Avg. Gain/Loss Ratio). The Alpha Success chart shows how frequently the manager beats the S&P 500 Index for various holding periods (in months). The Alpha Contour chart shows the how much the manager beat the market by for various holding periods.
The Strategy section describes the trading style of the fund manager.
Finally, the Journal section is where the fund manager can periodically share his/her thoughts on the market, or on particular stocks, as they manage their fund.
You can view the weblogs of some of our best managers, the mFolio Masters, by following the links below, or in the m100 & mfolio blogs section on the left.
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