Sequoia Fund

Alchemist

Administrator
Staff member
#2
Alchemist what do you think of this fund? They have beaten Warren Buffet lately!:shakehands:
Good fund. Outperforming the market.

I don't have much to add. :D.

Buffet hasn't made much money lately, so outperforming him isn't a big deal. If I am not wrong Buffet's has barely beaten US government bonds in the last 10 year.

Sequoia Fund has given return of 5.57% (CAGR) in last 10 years (2001-2011).

Sequoia Fund, Inc.
 

man4urheart

Well-known member
#4
You are right, so actually it all comes down to timing.

If somebody started with them in 05/01/2008 when the fund opened for first time, they must have done better returns. In fact who got in at bottom near April 2009, that is WOW! 85% returns compared to Dow Jones!



and here is the returns chart since 2009:



So fundamental analysis also works only if timing is right or price is right to buy!
 

Alchemist

Administrator
Staff member
#6
So fundamental analysis also works only if timing is right or price is right to buy!
If the economy stops growing or grows very slowly, stocks markets (and most stocks) will stagnate too.

In such markets, timing becomes important.

"Buy and hold" doesn't work in such conditions unless the buying is done at market bottoms.

That's why Sequoia hasn't created much wealth in the last decade.

The stock of "Berkshire Hathaway" has achieved a CAGR of 5.05% in the last 10 years.

S&P 500 has achieved a CAGR of 4.33% in the last 10 years.

US investors who diversified and moved to faster growing economies, have made much more money than US investors who continued to bet on the US economy.

e.g. NSE Nifty has given a 400% (17.5% CAGR) return in last decade.
 
#7
If the economy stops growing or grows very slowly, stocks markets (and most stocks) will stagnate too.

In such markets, timing becomes important.

"Buy and hold" doesn't work in such conditions unless the buying is done at market bottoms.

That's why Sequoia hasn't created much wealth in the last decade.

The stock of "Berkshire Hathaway" has achieved a CAGR of 5.05% in the last 10 years.

S&P 500 has achieved a CAGR of 4.33% in the last 10 years.

US investors who diversified and moved to faster growing economies, have made much more money than US investors who continued to bet on the US economy.
Inflation in the US around 3%. The best fixed deposit rates you can get in the US is around 1.5%.

So making 5% returns during a bad economy would not be that bad. I bet there are tons of funds which did far worse.
 

Alchemist

Administrator
Staff member
#8
Inflation in the US around 3%. The best fixed deposit rates you can get in the US is around 1.5%.

So making 5% returns during a bad economy would not be that bad. I bet there are tons of funds which did far worse.
You are comparing past returns of fund with future returns of fixed deposits.

I compared past performance of US government bonds with past performance of the fund.

10 years back, US government bonds had a yield of 5%.
 
#9
You are comparing past returns of fund with future returns of fixed deposits.

I compared past performance of US government bonds with past performance of the fund.

10 years back, US government bonds had a yield of 5%.
The S & P 500 in the same 10 year period was negative. Sequoia beat the S & P by around 7 percent. The inflation during the period was around 3%. So Sequoia did wealth protection also. I am not saying these are outstanding returns, I am just saying it's not bad.
 
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