2014 Bunny Portfolio Hops Into A Wall, But The Tradition Keeps Going

2014 Bunny Portfolio Hops Into A Wall, But The Tradition Keeps Going by John Dorfman, Dorfman Value Investments

My Bunny Portfolio, which has an admirable record since I launched it in 1999, fell on its face in the past year.

This hypothetical portfolio is named after the Energizer Bunny of battery commercial fame, which was “still going” long after you would have expected it to stop. The portfolio contains 10 stocks that have shown superb earnings growth in the past but are cheap because investors think their outlook is grim.

The theory behind the portfolio is that people are poor predictors of the future, and therefore these companies’ success may continue.

Obviously, this is a risky approach, because it involves betting...