In 2023, Eight Ventures’ Smart Whales model, our only all-stock portfolio, returned 42.3%.[1]

This performance compares well[2] with the 1191 actively managed mutual funds tracked by the Wall Street Journal in 2023. Their average return: 19.7%.[3] So, when compared to the 1191 funds surveyed, we outperformed by 22.6%.

Benchmarking against the S&P500, Smart Whales delivered 16.15 points of Alpha, 42.34% versus 26.19%.

How did we accomplish this?

Smart Whales makes concentrated, high conviction bets and has just 21[4] holdings at present. This relatively small number of holdings helps to ensure that I understand and love what we own, an idea held alongside the concept that we can accomplish diversification without holding 5,000 stocks. In fact, our portfolio is uniquely diversified and has at least 15% allocated to five separate sectors; a sixth sector meets the 10% allocation threshold.

Benchmarking against the S&P500 and what are actually better comps such as the US CRSP Total Market Index and the Russell 3000[5] (tracked by popular ETFs like VTI and IWV, respectively) Smart Whales was significantly overweight telecommunications and industrials, and significantly underweight consumer non-cyclicals and healthcare. These active weighting decisions are intended to create beneficial non-correlation.

Smart Whales seeks a number of factors.

  • We want growth …
  • we want this growth at a reasonable price …
  • we want to find this rare growth-at-a-reasonable-price profile in a company operating in an area of secular growth.

I will add this simple commentary: Smart Whales represents my one best idea for achieving market-beating returns over time and, for that reason, I have a lot of my own personal money invested here.

Smart Whales Portfolio –  At A Glance:

  • 2023 return: 42.34%
  • # of stocks in model: 21
  • # of stocks worth at least 3.66% of the model’s total return in 2023: 5[6]
  • # of stocks costing the model at least 1% in 2023: 0[7]
  • # of sectors represented: 8
  • # of sectors with a positive return: 8

In the weeks to come, I will post a newsletter recapping Smart Whales performance over the first four years. At the moment, the annualized return since inception is right at 26%. Over that same period, key comps have also booked solid returns:

Smart Whales 26%[8]
Nasdaq-100 15.3%
S&P 500 10.7%
DJIA 8.7%
Russell 2000 5.2%




[1] 42.34%; all performance figures provided by Interactive Brokers Portfolio Analyst

[2] To be included in the WSJ survey, funds must be actively managed US stock funds with at least $50 million invested and the following were excluded: sector funds, funds that employ leverage and most quant funds

[3] Results calculated by Morningstar Direct.

[4] Targeting 20 holdings, Smart Whales has always maintained 18-22 stocks.

[5] US CRSP Total Market Index and the Russell 3000 are superior comps as they represent large, medium and small cap companies, similar to Smart Whales.

[6] We had a number of big winners and our top stock was good for 7.99% of the total 42.34% return. Explanation by hypothetical: If you place 7% of your model in a stock that rises 52.3%, it will contribute 3.66 points to your model’s annual performance.

[7] Our worst 2023 performer, itself a winner for long-term Smart Whales investors, cost our model .8% in 2023.

[8] Smart Whales does not utilize leverage, options, futures or short positions.