Performance like this given the back drop of the kind of market we're in just means our little group are just a pack of degenerate punters.

I prefer the term "intelligent speculators" @BkrDzn :)

I resemble that comment @BkrDzn!!

Approx half my IRL investments on the ASX are also in my SM portfolio. It's a real shame my IRL portfolio hasn't jumped to the same degree as SM premium index, but truthfully, it has been a very solid YTD. Always expect the nagging correction though. I've been doing this long enough to take the good with the bad.

Well done to all SM premium members and to our fearless leader @Strawman

Ive kept a couple stocks in my real portfolio that are down 80-90% (in both price and value) as constant reminders of what can happen.

@PhilO I occassionally look in the mirror as a reminder of what can happen

How is the index determined?

I think this is the methodology @I1I1I1.

I also think Andrew explained it a straw somewhere also. Note the term "active members" and "top 15 to 20 stocks" (by invested value - not performance). I wonder what would happen to the performance if those limitations were removed, particularly the latter.

yup, @Noddy74's right re the methodology.

I while back we all had a discussion about the 'best' way to construct an index, and it soon become apparent that it is entirely subjective and we all had a lot of different opinions. I've always been reluctant to change the methodology -- not because I think it's the best possible approach, but because it feels like cheating to move the goal posts after the fact.

The end result was that we built a custom index builder, which allows users to construct their own index. It isn't fully customizable, and you can only change certain things, but it was intended to solve the subjectivity problem and allow people to build an index and see its performance in a way that better aligned with their own preferences.

I tried running it woth all filters turned off, but it was too much for the system to process. But here's what it looks like if you look at all the holdings combined for the top 50 ranked members:

40.3% isn't a bad one year return at all @Strawman - and while there were a small bunch of widely held companies that did a lot of the heavy lifting (EOL, CAT, SGI, SPX, etc.) (none of which I hold as it turns out), there are a far greater number of good performers that while they didn't shoot the lights out, they still put on 50%+ in the past year, so plenty of companies contributing, and more importantly, we seem to be holding on to those losing companies less, or have less weighting to companies whose share prices keep making new all time lows on a regular basis. I think it's fair to say the Strawman Premium Index outperformed the vast majority of professional fund managers' portfolios (the ones available to the public to invest in) over the past year. Not bad at all!

To be fair, we're down since the inception of Premium. It's always tempting to suggest it was just an unlucky starting point given the extreme valuations of most small caps back then, but I know I for one held on for too long/ sold too late, with more than a few duds.

Ive no doubt we'll edge above the market on that score eventually, but it's still worth acknowledging.

As the 1991 Nobel prize winner in economics, Ronald H. Coase said: “If you torture the data long enough, it will confess to anything.”

The dud removal process is always an interesting conundrum @Strawman.

We all have some duds in any portfolio, with a reasonable amount of conviction, right up until there's not a lot of conviction and the share price (unsurprisingly) has slumped.

I do agree, at least in my case, I'm becoming a harsher critic of my own share holdings and happy to act more regularly if they break my basic rules.

So a portfolio refresh more regularly and some lucky breaks on some other speculators has certainly helped my portfolio get back on track.

Looking across the various premium members I follow or come across during forum chats, etc, that seems to be a pretty common theme as well. So SM is effectively making us all a little better at this investment gig!!

Certainly something you @Strawman should be proud of!!

The premium one has done better. The value of a membership is objectively confirmed.

Cool - hey @Strawman - maybe I missed this, but how are the stocks selected on this index? Is it popular stocks from the forums, or something else?

Nice. Just needs another +70% or so to get back to the high water mark from late 2021.

Check this out @rh8178

https://strawman.com/blog/the-strawman-index/

We added a custom index builder that allows you to cut things in a more customized way.

https://strawman.com/blog/strawman-custom-index-builder/

Ah yes @BkrDzn the heady days of 2021.. I know my personal portfolio was doing a lot better then too.

I think I'm guilty of confusing luck for skill at that time, at least in terms of the magnitude of outperformance.

Common mate. We all know its pure skill on the way up and bad luck on the way down.