Performance History

The Links below are to tables that show returns for accounts managed by Losch Management Company compared to the returns of the Standard and Poor's 500 and the NASDAQ Composite averages. These results have not been audited by independent auditor. The Tables were computed by my portfolio software which is Portfolio Center from Performance Technologies. The results are computed from trade and price data that was downloaded from customer accounts at Charles Schwab for the period from December 31, 1995 to October 2003, and from Ameritrade from October 2003 to date. Data for trades prior to December 31,1995 was entered manually into portfolio Center from the customers records.

The main value of the tables is not their predictive value (they have none), but in the way that they demonstrate the value of a few percentage points of out-performance. The first table shows that a 4% difference in the performance over 19 years make a huge difference in the end result (almost 3 times as much equity). The second table makes the same point but because it covers a shorter time period the results are not as dramatic.

                    19 Year Table

                    10 Year Table

 

Results of individual accounts will vary to some extent from this composite because all accounts do not hold the same stocks. The main reason for the different positions in different accounts is that the accounts are opened at different times and money is added to the accounts or withdrawn from the accounts according to the needs of the individual customer. The value of a money manager should be measured by the value added by the manager.

When a new account is opened, stocks are purchased for that account based on the market valuations that exist when the account is opened and depending upon the investment needs of that customer. Stocks that were attractive for purchase when one account is opened may no longer be appropriately priced when the next account is opened.

As long-term positions become priced above their intrinsic value, accounts with a small gain in the stock will sometimes be sold earlier than a position that has a large gain. Some long-term positions have very low cost basis and are mostly capital gains. We are reluctant to sell these positions because the sale triggers a large tax liability, and we will sell only if the overvaluation becomes extreme.

 

Past results are no guarantee of  future performance.  It is certainly our hope that we will be able to outperform the market in the future, as in the past. But there is no guarantee that our results for the next nineteen years will match the returns for the last nineteen.

Here are the actual year-end statements of four managed accounts: one for 15 years, one for 12 years, and two for 7 years. Only the names have been removed.