With this strategy, financial blogger Eddy Elfenbein beats the performance of Warren Buffett’s Berkshire Hathaway and Cathie Wood’s ARK

• Eddy Elfenbein celebrates success with “Buy” list and ETF
• ETF performance beats that of ARK Innovation and Berkshire Hathaway over the past five years
• Declared goal to be “as lazy as possible.”

Eddy Elfenbein is the creative mind behind the financial blog “Crossing Wall Street”, a website that the financial professional launched almost 20 years ago to – as he writes – “help small investors”. His approach is simple. In his experience, there is volatility in the stock market from day to day or month to month, but in general things are improving in the long term. Stocks have risen 200-fold in the last 50 years. Since the end of the Second World War there has been a phenomenal increase of 400,000 percent.

Investing for the long term is the be-all and end-all

In order to avoid the short-term fluctuations of the stock market, Elfenbein advises buying and holding shares of “exceptional companies”. The financial blogger also follows this strategy with his own exchange-traded fund “AdvisorShares Focused Equity ETF”. The ETF consists of 25 stocks. Every year on January 1st, five new titles are added and five old titles are removed. Then the ETF will not be touched for 12 months. In this way, Elfenbein is forced to only select companies whose upward potential he strongly believes in. The portfolio manager publishes the 25 stocks from the “Buy” list on which the ETF is based on its website at the end of December every year, along with their ticker symbol, the current price, the performance since the beginning of the year and a short description. All stocks are weighted equally, so that each title makes up around four percent of the overall portfolio. Incidentally, the buy list has been around longer than the ETF; the fund was launched in 2016 in response to requests from its readers. It has now reached a volume of almost 100 million US dollars.

Stock picks 2024

The following stocks are on the buy list for 2024: Abbott Laboratories, Aflac, American Water Works, Amphenol, Broadridge Financial, Celanese, Cencora, FactSet Research, Farmer Mac, FICO, Fiserv, HEICO, Hershey, Intercontinental Exchange, Intuit, McGrath RentCorp , Miller Industries, Moody’s, Otis Worldwirde, Polaris, Rollins, Science Applications International, Silgan, Stryker and Thermo Fisher.

Performance since creation of the “Buy” list

The “Buy” list can look back on an impressive performance. Since its creation in 2006, it has delivered an overall performance of 573.3 percent, while the S&P 500 has gained just 447.04 percent, according to the website Crossing Wall Street. Nevertheless, looking at the performance history, it is clear that there were certainly years in which the list did not perform as well as the market-wide US index. Here too, the key lies in the long term. According to Elfenbein, the investment horizon is five years.

The performance of the CWS ETF over the last five years has eclipsed that of star investor Cathie Wood’s ARK flagship ETF and that of stock market oracle Warren Buffett’s investment holding Berkshire Hathaway. Elfenbein’s fund has gained 110 percent since 2018, while the ARK Innovation ETF has only increased 45 percent and Buffett’s conglomerate has increased 74 percent, writes Business Insider.

Ivory’s credo

Elfenbein was recently a guest on the business and investing podcast “The Compound and Friends” with Josh Brown. Here he went into detail about his strategy. His goal is to show investors that you can be very successful with the “set it and forget it” mentality. “You don’t have to trade a lot. You don’t have to keep going in and out. You don’t necessarily have to buy well-known growth stocks. You can get a kind of boring portfolio, bet it and hold it, be disciplined and do very well,” said Elfenbein in Podcast. To prove this, he created the “Buy” list. He has now reached the 19th list created.

Sometimes people approach Ivory and are surprised that he only touches his ETF once a year, but he sees this as a big advantage. Before making a selection, he would ask himself: “Do I feel comfortable holding this stock for an average of five years?” This would then affect your own mentality, you would think differently about what the stock should do for you as an investor. Brown points out that in the best-case scenario, a stock would remain in the portfolio forever.

In fact, such a stock is also on the current “buy” list, because as Elfenbein says in the podcast, the US insurance company Aflac has made it onto the buy list every year so far. According to the financial blogger, a worst-case scenario would be a merger of a company contained in the ETF, for example if it were bought out. The main problem is that the company is no longer the one that you bought. However, Elfenbein would hold on to the combined company until the end of the 12-month period. In the end, his strategy is about being “as lazy as possible.”

Editorial team finanzen.net

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