Dow Jones Index is up 6 percent this year. How many gurus made this year at least 6 percent BEFORE fees ?

The Score Board of Gurus
I have to say that from 50 gurus listed on gurufocus.com only 4 made more than DJIA (Ken Heebner, Ian Cumming, T Boone Pickens, Edward Owens) the rest failed to beat DJIA.So, after fees probably only 3 would make it.

As I mentioned in my previous post, Berkshire Hathaway stock lost money to every  european investor that  bought it five years ago.

Whats going on ? I think problem is in something I called 3 layers in each bet.

3 layers in each bet

Everybody knows about bottom-up style. I think here is the core of the problem.Each bet has 3 layers and purpose of each bet is to have at least 2 of 3 layers on your side.

1.layer - is company itself (bet on management,moat etc.)
2.layer - is sector where is the company (housebuilders,financials etc.)
3.layer - is country,currency (where is the company and stock listed)

As you can see 1.layer is micro, the last two are macro.What stock picker tries to achieve is to in 1.layer beat competitor,in 2. layer beat sector index, in 3 layer beat country index

Lets say you picked housebuilder PHM.
1.layer you tried to beat LEN,(competitor),
2.layer you tried to beat ITB (sector index-sector ETF),
3.layer you tried to beat SPY (S&P 500 index ETF)

What I learned is that when sector goes down, the stock goes down as well.

You can have a look at housebuilders,subprime lenders,banks and even any commodity stocks .For example natural gas or uranium.When the price of commodity went down- sector went down and stock went down.The same price of houses went down -sector went down - stock went down.Credit tightened- sector went down,stocks went down.

If you look at portfolios of many gurus you find out that they have heavy weightings in some sectors - now financials.

So, it means that they bet that the financial sector will beat coutry index, others sectors and financial sector ETF.Thats why they picked particular stocks and not just 1 financial ETF.

My question should be will my stock pick be able to beat  sector ETF,competitor,country index ETF?

I think that ONLY first layer attitude is the reason of these poor results.Otherwise how would you explain that  these gurus  expect  fall of dollar,slowdown in US economy and they were still focusing on US stocks.

On the other hand you have fast growing economies,appreciating currencies and undervalued stocks and they just ignore them.Why? Because someone told them that only 1.layer counts.
NOT ANYMORE.
 
When you have a look at Eric Sprott style you will immediately realise what is the secret source of his results.He got two layers of three in his favor. Commodity sector trend (2.layer) and undervalued stocks (1.layer).

If you think that there is a peak oil then which economy will benefit from high oil prices? Check Dubai ETF and you will see 60 percent increase.

If you think US economy will slow down then compare it to emerging economies check BRIC Brazil,Russia,China ETF.
etc.

As I showed on BRKA example most foreign investors will lose heavily on US stocks in following years because if MACRO goes against micro MACRO wins.

In 1976, shortly before his death, Benjamin Graham told the Journal of Finance the following:

I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when [the bible of fundamental stock analysis, Graham and Dodd's Security Analysis] was first published; but the situation has changed. I doubt whether such extensive efforts will generate sufficiently superior selections to justify their cost.