We haven’t provided an update of the Watch List performance recently, and year-end seemed an appropriate opportunity.
The Wach List, in the dark blue line, trailed the S&P 500 by 150 basis points since its inception on July 1, 2006. However, given the fact that most of the companies on the watch list are small/mid cap it may be more appropriate to compare its performance to similar benchmarks. On that count it fared much better, besting its counterparts by anywhere from 100 to more than 500 basis points while appearing to experience lower volatility.
The original intention was to rebalance the Watch List quarterly. That was not done, and one reason was that the 100 names on the Watch List started to seem unwieldy. We’re considering having multiple Watch Lists based on capitalization ranges (small, mid and large) with fewer (20-30) stocks in each. Thoughts?