In June we here at Equities created a portfolio called the FUNY Index, comprised of all the stocks and ETFs we could find with intentionally humorous ticker symbols. We backdated to the beginning of the bull market in Nov. 2012, showing that this collection off nearly-random plays was already beating the S&P 500.
We checked in on it periodically before letting the Index sit for three months. When we came back and assessed the portfolio back on Dec. 18 to see close it out and see how it had fared, what we found was pretty amazing.
Here it is:
A Few Highlights and Observations:
– BioTelemetry, Inc. (BEAT) was the biggest winner, with the hearbeat monitoring company (get it?) nearly tripling in value.
– Southwest Airlines (LUV) also propped up the FUNY Index, as more and more travelers opted for the low cost, flexible-travel air carrier.
– Not a single compenent of the FUNY Index posted a valuation loss during the tracking period.
– The worst performer, Yum! Brands (YUM) is also the least-funny symbol. It's just their name, after all.
– Ditto Thoratec Coporation (THOR) . Thor is again just part of their name, and we're not even sure if it was intended as a joke ticker.
– Contrast this with Olympic Steel Inc. (ZEUS) whose ticker clearly plays on the Olympic/Olympus connection. As opposed to the relatively dismal YUM and THOR, ZEUS went up 63.55 percent. Coincidence? No way!
So What Did We Learn?
The FUNY Index nearly doubled the return of the S&P, gaining over 61 percent since Nov. 2012. We’re still not sure its success means, but it’s probably similar to the reason the guy who wins the office March Madness pool by picking teams based off the mascot: just because it has no logic doesn't mean it can't work. More concretely, well-diversified portfolios spread out over several sectors and investment types help protect investors by spreading out risk, and insome cases can indeed beat the S&P.
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