Insight Selectome Fund (Insight Selectome Fund) Predictability Rank

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What is Insight Selectome Fund Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Insight Selectome Fund Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Insight Selectome Fund (Insight Selectome Fund) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Insight Select Income Fund (NYSE:INSI) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

200 Park Avenue, 7th Floor, New York, NY, USA, 10166

Website

https://www.insightinvestment.com

Insight Select Income Fund is a diversified closed-end, management investment company. The fund's investment objective is to seek a high rate of return, primarily from interest income and trading activity, from a portfolio principally consisting of debt securities. It offers various solutions such as risk management, liquidity management, and return generation among others.

Executives

Daniel Haff	officer: Chief Compliance Officer	C/O INSIGHT SELECT INCOME FUND, 200 PARK AVE, 7TH FLOOR, NEW YORK NY 10166
Patrick Harris	officer: Chief Compliance Officer	C/O INSIGHT SELECT INCOME FUND, 200 PARK AVENUE, 7TH FLOOR, NEW YORK NY 10166
Seth Gelman	officer: Chief Compliance Officer	C/O INSIGHT INVESTMENT, 200 PARK AVENUE, 7TH FLOOR, NEW YORK NY 10166
Ellen D Harvey	director
Insight North America Llc	other: Investment Adviser	200 PARK AVENUE, 7TH FLOOR, NEW YORK NY 10166-0005
James Dichiaro	officer: Vice President	113 KING STREET, ARMONK NY 10504
David Lebisky	officer: Chief Compliance Officer	11601 WILSHIRE BOULEVARD, SUITE 1200, LOS ANGELES CA 90025
Thomas Stabile	officer: VP, Treasurer and CFO	200 PARK AVE, 7TH FLOOR, NEW YORK NY 10166
Robin J. Shulman	officer: Chief Compliance Officer	200 PARK AVE, 7TH FLOOR, NEW YORK X1 19103
Thomas Edgar Spock	director	43 STONEYSIDE DRIVE, LARCHMONT NY 10538
Cutwater Investor Services Corp.	other: Investment Advisor	113 KING STREET, ARMONK NY 10504
Joseph L. Sevely	officer: VP, Treasurer and CFO	276 FIFTH AVENUE, SUITE 306, NEW YORK NY 10001
W Thacher Brown	director	355 MAPLE AVE, HARLEYSVILLE PA 19438-2297
J Lawrence Shane	director	1838 BOND DEBENTURE TRADING FUND, 2701 RENAISSANCE BLVD 4TH FL, KING OF PRUSSIA PA 19406
Mbia Inc	other: Parent of Inv. Adv. see foot.1	1 MANHATTANVILLE ROAD, SUITE 301, PURCHASE NY 10577