The Katana: Lauching The Samurai Fund To Prove A Theory

The S&P 500 is at close to record highs in 2015. And, the bull market is more than five years in the making. Today we are launching The Samurai Fund to prove a theory. Details below.

The tipping point in your 401K, where performance starts outweighing a maximum $19,500 annual contribution is roughly $200,000. Once you have $200,000, the real juice comes from performance where an 8% return equals roughly the maximum contribution you can make every year.

There are two lessons to be learned in 401K land:

1) Contribute the max to your 401K every year. And in 10 years, you will likely have $200,000 given company matches, and performance (even in this past decade).

And 2) Once you reach $200,000, you're going to hurt like no other if you lose 40%, or $80,000 of your portfolio, so diversify! The sword cuts both ways.


I've only had a couple big stock hits in my life, and I attribute it all to LUCK. Of course, I also attribute all my loss making ideas to BAD LUCK, and not to poor timing, bad fundamental analysis, and generally not understanding what the hell I'm investing in!

Essentially, I believe with a lot of luck and a little bit of effort we can outperform the markets.  Hence, let's see if the PF community can outperform the S&P 500 with our own randomly unscientific stock picks based on permutations of our own names and blog titles!

Launching The Samurai Fund

This is going to be a lot of fun! Here's what's entailed in launching The Samurai Fund.


* The stock idea/ticker you come up with must solely come from your name or blog site. For example, my stock pick is ticker symbol SAM, or Boston Beer Company! If your name is Credit Card Chaser, your ticker is CCC, or Calgon Carbon CP etc.

* Your idea can be a stock, or ETF of anything if the ticker makes sense. Once you get your idea, please provide a brief description of the security, market cap (of at least $200 million to make it realistic), P/E ratio, dividend yield if any, earnings growth where available, and your own personal opinion. Yahoo Finance is a good place to go for info.

* The Samurai Fund will consist of around 10 names for a total value of $1 beeeleon dollars! I'm assuming there won't be a flood of entries since it's the holidays, and entries take a bit of effort, but we shall see.

* The picks will be equally weighted in the fund i.e. 10 picks will each have an initial position size of $100 million, with a purchase price based off this Thursday's close.

* The fund performance will be reviewed once a month, highlighting every person's pick, with an individual performance ranking and underperformance / outperformance vs. the S&P 500.


Company: Boston Beer Company

Ticker: SAM

Market Cap: $668 million.

P/E: 24.6X

Earnings Growth 2010: 11.3% vs. 29% for the S&P!

Personal Opinion: Love Samuel Adams beer, but with no dividend, such lofty valuations and minimal earnings growth, this is not a defensive stock that is expected to outperform in 2010!

The goal of this exercise is to just have fun and help prove the theory that anybody can outperform the market with a litle bit of luck and thought.  Once we have a diverse enough portfolio, as explained by the Modern Portfolio Theory, we should be able to compete with the likes of Warren Buffet and Bill Miller!  Entries close this Thurs, Dec 31st.

Further Reading

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Updated for 2021. Let the bull market continue with stocks at all-time highs!

About The Author

46 thoughts on “The Katana: Lauching The Samurai Fund To Prove A Theory”

  1. Hey no worries, guess I just got caught skimming a post. D’oh!

    NAT is just pulling 3 letters out of the “Steadfast Finances” blog name. I nearly went with SF (Stifel Financial) but it’s had such an awesome 5 year run, I’m not sure the momentum can continue.
    .-= Matt SF´s last blog ..Football Party Food Ideas for College Bowl Week =-.

  2. Company: Nordic American Tanker
    Ticker: NAT
    Market Cap: $1.27B
    P/E: 44X
    Earnings Growth: TBD

    My 2 cents:
    I’m taking a bet on an uptick in global oil consumption. NAT has a nice fleet of double hulled ships that some tankers don’t have, plus management slashed the dividend in 2009 and if reinstated (once business improves), the income investors would likely pile back in.

    Again, it’s a big bet but growing countries need their go-go juice.
    .-= Matt SF´s last blog ..The Bubble Decade Documentary =-.

    1. Hi Matt – Thanks for your submission, but the deadline was last Thurs, Dec 31st! Doh sorry. Also, just trying to figure out how NAT corresponds to your name or site name? I’m slow :) Maybe Nat rhymes with Matt?

      We’ll have new openings once a month, or definitely once a quarter for sure! I just got back today, after spending like 3.5 hours putting the fund and post together this morning. Next round!

  3. Okay, take two on the Mon theme:

    Company: Monster Worldwide
    Ticker: MWW
    Market Cap: $2.2 Billion
    P/E: 42X
    Earnings Growth: 167% for next year

    Personal opinion: I am picking this stock to keep with the play-on-the-blog-name theme, but I actually am pretty bullish on economic recovery so this recruitment giant isn’t entirely unattractive. I haven’t looked at the accounts or the balance sheet etc, though, and I’m not wildly familiar with US stocks (though I know many of the companies superficially) so I recommend it only for the FS fund, nothing more!

    Hope this makes the cut FS. :)

  4. Monevator – I welcome the contribution, however, a fellow blogger Don @ Money Reasons already picked Monsanto. Check the comments above :)

    Please let us know if you can come up with another name. Cheers, Sam

  5. Ooh I hope I’m not too late. My entry would be: GE (aka the Sheinhardt Wig Company).

    Company: General Electric Co

    Ticker: GE

    Market Cap: $162.5 Billion

    P/E: 14.1X

    Earnings Growth 2010: 17.33 is the target

    Personal Opinion: With the recent pending sale of NBC Universal to Comcast this might be an interesting stock as GE attempts to get leaner, but really how lean can you make a company that has more than 323,000 full time employees. I suspect GE won’t be outperforming much other than say GM.
    .-= Paul @ FiscalGeek´s last blog ..New Year’s Resolutions Suck How About Setting Goals and Measuring Them? =-.

  6. Still time? I’d like to submit the genetic modification and agricultural wing of Monevator enterprises, Monsanto!

    Company: Monsanto
    Ticker: MON
    Market Cap: $45 Billion
    P/E: 22X
    Earnings Growth 2010: 34.7% for next year

    Personal Opinion: I was going to say Monsanto could take over the world as the recovery kicks in and the Chinese keep looking to eat more grain-fed beef etc. Then I saw its market cap and decided maybe it already has — it’d be a top 10 company here in the UK, can it really double from here before we’re all dead?

    Oh well, as Len says, rules are rules, so let’s see how she fares. :)

  7. Sorry for trying to add a little safety to the super fund lol!

    Lets roll with

    JNY (as in Journy) for Jones Apparel Group (52 week range 2.39 to 19.74, how is that for volitility lol)

    P/E – 12.47
    Market Cap – 1.38B
    Dividend is .20

    Jones Apparel Group, Inc. is a designer, marketer and wholesaler of branded apparel, footwear and accessories. The Company markets its products to the consumers, through a chain of specialty retail and stores and through the e-commerce Web sites. The Company also markets costume jewelry under the Givenchy brand licensed from Givenchy Corporation, footwear under the Dockers Women brand licensed from Levi Strauss & Co., and apparel under the Rachel Roy brand licensed from Rachel Roy IP Company, LLC. The Company operates in five business segments: wholesale better apparel, wholesale jeanswear, wholesale footwear and accessories, retail, and licensing. The brands of the Company include Jones New York, Nine West, Anne Klein, Gloria Vanderbilt, Kasper, Bandolino, Easy Spirit, Evan-Picone, l.e.i., Energie, Enzo Angiolini, Joan & David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Albert Nipon and Le Suit. On June 20, 2008, the Company completed the acquisition of GRI

    My Take – Look at those brands this company is going to be fine! Not sure its going to be a homerun, but its going UP!
    .-= Evan´s last blog ..Four Words in Personal Finance that Piss me Off…and The Wife Says them All the Time =-.

    1. Evan – Haha, sounds good. Damn, are we top ticking this company or what? I mean, where were we went the stock was in the $2-4 range?? OK, nothing like a little consumer discretionary goods company to ride the economic recovery!

      EVO – Sounds good man. Dang, your stock has also gone STRAIGHT UP this year. I’m afraid! lol.

  8. Company: Edwards Lifesciences
    Ticker: EW
    Market Cap: 4.95B
    PE: 23.31
    Dividend: none
    Earnings Growth 2010: 16.7%

    Edwards Lifesciences provides products and technologies in treating cardiovascular disease. They are a leading provider in a growing sector. If you believe America will continue to be fat this could be a good investment. Was that mean?

  9. @Evan
    Hmmmm, interesting idea. You SURE you want to choose this low beta fund? If interest rates rise a lot, this bond fund is going to TANK! At $198mil market cap, we can barely buy a position in the fund, esp due to the trading volume. Any other ideas you got man?

    @Len Penzo
    Lennar is a good pick Len! I like it, let’s include it. The point of the exercise is to just randomly choose a real security totally based off your name. Lennar to the moon!

  10. I am in!

    Fund: BlackRock NJ Muni

    Ticket: MYJ (MyJ

    Market Cap: Just Shy of $200Mil

    P/E: 28.22

    Dividend (yearly): 6.1%

    Earnings Growth 2010 (estimate): n/a

    Personal Opinion:: With Interest rates rising bonds will fall. Oh, and isn’t almost every state already bankrupt?

    Company Summary:: BlackRock MuniYield New Jersey Fund, Inc. (the Fund) is a non-diversified, closed-end management investment company. The Fund seeks to provide a high level of current income exempt from federal and New Jersey income taxes by investing primarily in a portfolio of long-term, investment-grade municipal obligations, the interest on which is exempt from federal income tax and New Jersey personal income taxes. The Fund may invest in swap agreements and zero-coupon bonds. It invests in sectors, such as health, transportation, education, housing, utilities, corporate and tobacco. The Fund’s investment advisor is BlackRock Advisors, LLC, an indirect, wholly owned subsidiary of BlackRock, Inc. BlackRock Investment Management, LLC, an affiliate of BlackRock Advisors, LLC, serves as the Fund’s sub-advisor.
    .-= Evan´s last blog ..What Did African Americans Think Obama was Going to do? =-.

  11. @Len Penzo
    Hey Len, thanks for your entry! However, the ticker for Exxon Mobil is not LEN, but XOM, and I can’t figure out how XOM relates to your name.

    Hence, if you want to join, you’ll just have to do a similar write-up of Lennar Corp, the homebuilder, which frankly, could be a great pick in 2010 if housing continues to stabilize and rebound!

    Let me know. The fund closes today. We have more than 10 entries already.
    .-= admin´s last blog ..Creating A Masterpiece By Failing Forward =-.

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