Long-term value portfolio review for week ending 10/12/12

The long-term value portfolio ended the week at 10.36 per share, a loss of 1.2% on the week. This compares to the weekly loss on the S&P 500 of 2.2%. The long-term value model portfolio continues to gain ground against the major averages slowly. The following are performance figures as calculated by Marketocracy. The figures may be different from how I am calculating the returns.

RETURNS Last Week -1.24% Last Month -0.65% Last 3 Months 5.73% Last 6 Months N/A Last 12 Months N/A Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception 3.74% (Annualized) 13.91%

S&P500 RETURNS Last Week -2.19% Last Month -0.15% Last 3 Months 5.89% Last 6 Months N/A Last 12 Months N/A Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception 5.30% (Annualized) 20.07%

RETURNS VS S&P500 Last Week 0.94% Last Month -0.50% Last 3 Months -0.16% Last 6 Months N/A Last 12 Months N/A Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception -1.55% (Annualized) -6.16%

Since inception, the portfolio has gained about 3.6%, a deficit of 130 basis points relative to the S&P 500 by my calculations. Although the long-term value portfolio is underpeforming the S&P 500, it is now outperforming the NASDAQ, per the below chart.



The NASDAQ chart is represented by the line in the above chart while the long-term value portfolio is blue and the S&P 500 is in green.

The long-tern value portfolio model invests in beaten down stocks that exhibit positive indications on my long-term technical model. In addition, the companies looked have to fit certain fundamental characteristics- including limits on debt, ROE, cash flow, etc.- in order to limit risk.