by Trawut Luangsomboon
Jan 7, 2020 • Last updated: Jan 21, 2020
Jitta Ranking Returns 2019

Happy New Year 2020!

Every year, we reveal Jitta Ranking Top 30 returns to show how the selected stocks performed last year. This year is no difference, and we have so many exciting things to discuss pertaining to the seven markets we cover.

So let’s get started!

Global instability underlies market volatility

Stock markets have been highly uncertain, making it hard to predict how much the indices will go up or down. In 2018, all of the stock markets were negative, and it was predicted to be worse in 2019. Throughout last year, we were constantly bombarded with bad news, from the trade war between China and the United States, Brexit, to the demonstrations in Hong Kong.

But, as it turned out, 2019 was not that bad after all. The seven-market average return was positive, with the U.S., UK and Hong Kong—where most of the world’s incessant financial bad news originate—producing impressive gains. 

Therefore, if you want to invest in the stock market, self-control is crucial. It is important to remain unaffected in the face of daily bad news and temporary portfolio drops because panic selling can lead to missed opportunities when the market turns around.

Best is to keep your money in the stock market, ignoring those fluctuating annual returns. Because we know with considerable certainty that, in the long run, the stock market goes up. If possible, when the stock market falls, you should actually consider seeking and snapping up great bargains in the market. This can increase your gains later when the market comes back up.

Jitta Ranking 2019 performance

Jitta Ranking is an algorithmic stock-ranking system based on the value-investing principle of buying undervalued stocks with sound business fundamentals. It ranks investment-worthy stocks independently of news and market sentiments with data from financial reports. The returns of the Top 30 stocks indicated by Jitta Ranking at the beginning of 2019 were measured at the end of the year. Here are the results:

As you can see, Jitta Ranking produced positive returns in five countries and negative returns in two. However, a seven-country average shows Jitta achieving a very good return of 14.53%.

Jitta Ranking against market benchmarks

Comparing Jitta Ranking Top 30 returns with market indices, you will find that:

  • Jitta Ranking Top 30 outperformed the market in five countries and underperformed in two.
  • The biggest outperformance was seen in Japan with 14.63% higher return.
  • The biggest underperformance happened in Vietnam with 13.99% lower return
  • The average return outperformed the market by 2.65%

With the right investment strategy, you can make a huge profit, especially in a bull market, without the constant buying and selling, which will allow you to effortlessly generate and accumulate wealth in the long term.

But we shouldn’t expect Jitta Ranking to always outperform the market. In fact, no strategy can consistently beat the market every single year when you invest full-time in stocks.

That’s because the market isn’t always rational.

Some years you may pick really good stocks that are fundamentally strong and very cheap. But if other investors don’t yet realize the values of the stocks you own and pick other stocks over yours, you can see share prices of other stocks go up while your portfolio underperforms.

However, such irrationality can only persist in the short term. Eventually, the market will correct itself, and a few years of underperformance can be succeeded by years of market-beating returns.

For example, last year Jitta Ranking Top 30 underperformed the market in Thailand and Vietnam, with the latter underperformed by 13.99%.

But a closer inspection of the annualized returns in the past 10 years (2009-2018) of Thailand and Vietnam reveals many useful insights.

Thailand 🇹🇭

  • During the 10-year period, Jitta Ranking Top 30 outperformed the market seven times and lost 3 times.
  • Jitta Ranking Top 30 outperformed the market six years in a roll, from 2011 to 2016, before losing two years straight, in 2017 and 2018.

Last year’s slightly below-benchmark return is, therefore, not a cause for alarm. Remember, Jitta Ranking had been beating the market for six consecutive years prior to 2017. The fact that it has underperformed for the last three years is still within a normal range, and a signal that Jitta Ranking could soon come back to beating the market again.

Vietnam 🇻🇳

  • During the 10-year period, Jitta Ranking outperformed the market seven times and lost three times.
  • Jitta Ranking underperformed from 2011 to 2012; turned around to beat the market for five consecutive years, from 2012 to 2016; lost again in 2017; and then triumphed in 2018.

Thus, losing to the market by 13.99% last year isn’t a big deal, statistically. There had been a long period of outperformance prior and again in 2018. Jitta Ranking underperformed by a sizeable margin in 2019, but it’s quite possible that it will bounce back to producing market-beating returns after this.

Now you can see that every stock market follows a cycle. A good investment strategy will help you outperform more than underperform. And it is likely that in 2020-2021, Jitta Ranking Top 30 would yield better returns for Thailand and Vietnam.

Besides these numbers, I personally think that Jitta Ranking’s underperformance in Thailand might stem from the fact that, in the past 2-3 years, retail investors have been holding off investing, resulting in unsatisfactory returns for small- to medium-cap stocks. Meanwhile, large-cap stocks prices are constantly buoyed by institutional investors, making them more resistant to market downturn and keeping the indices from plunging deeper.

In the case of Vietnam, I think there are too few retail investors in the market, and these few mostly speculate as opposed to investing for the value. As a result, prices of many “wonderful companies at fair prices” remain undervalued. On the other hand, most of the stocks whose prices appreciate are big corporations popular among foreign investment funds.

Jitta Ranking outperforms in Japan, U.K., U.S.

There are 2 countries in which Jitta Ranking top 30 yielded 10% higher returns more than 10% higher than the market, which are Japan and the UK with returns 14.63% and 13.79% differences in returns, respectively.

Of course, we will feel that these 2 markets are very attractive, but if we look back 10 years, we will find that Jitta ranking did not always beat the markets like what happened in Thailand and Vietnam.

Japan 🇯🇵

  • During the 10 years, Jitta Ranking had outperformed the market for 7 years and underperformed the market for the rest 3 years
  • The longest consecutive period of outperforming is for 4 years during 2009-2012
  • Returns during the last 4 years had been switching back and forth between outperform and underperform.

United Kingdom 🇬🇧

  • During the 10 years, Jitta Ranking has outperformed the market for 8 years and underperformed for 2 years
  • The longest consecutive period of outperforming is for 7 years between 2009 to 2012
  • Returns during the last 4 years have been switch back and forth between outperform and underperform 

Therefore, it is not a surprise that Jitta Ranking stocks in both Japan and the UK also yielded good returns that are higher than the market in 2019.

Although Jitta Ranking’s return does beat the market overwhelmingly, but it is the 2nd highest among the 7 countries.

United States 🇺🇸

  • In 10 years, Jitta Ranking returns have outperformed the market for 7 years, underperformed for 3 years.
  • Returns has been beating the market for 2 years, losing 1 year alternately.
  • Returns in the last 4 years has outperformed for 2 years and also underperformed for 2 years

If you look at the past 5 years (2015-2019), you will see that Jitta Ranking has achieved good returns relative to the market. Averaging all 7 countries, Jitta Ranking yielded an accumulated annualized return that is 4.2% higher than that of the market, outperformed the market in 5 countries and underperformed the market in the rest 2 countries.

Jitta Ranking also tends to ‘win big and lose small’. It beat the market in UK, Japan and Singapore for as high as 7-8% annually while offered return only 1% lower than the market in the U.S. and Vietnam.

These numbers showed that investing in accordance to Jitta Ranking strategy is quite safe and can help achieved returns that are somewhat in line with the market. Even though in the past 5 years, stock markets around the world have been highly volatile, moving up and down alternately, the chance of Jitta Ranking’s return being negative is almost non-existent.

In conclusion, it can be seen that the movement of stock markets follow a cycle and market sentiment. However, in the long run, stock markets will grow from the fundamental factor, that is, the economic growth. This will continue to help the stock market to grow for 8-10% annually in the long term.

So, if we invest in the stock market with the right strategy, we can expect returns that are at least equally or even better than the overall market return. It’s just that we need to be determined and keep investing for long enough to see the results. It could be for at least 5 to 10 years, because on average every 10 years, the stock market tends to give more positive returns than negative.

We should not be quivered with the sentiments or returns in the short term and shift our strategy regularly in accordance to those noise, especially in the period where it yields bad return, because it will dampen our overall return in longer term.

Try to be mindful and reflect your own thoughts on the understanding the stock market nature and the suitability of our investment principles. If we understand it and act correctly, we will be able to invest comfortably and see our portfolio grow.

During 2019, Jitta team has learned and grown a lot. We have been continuously striving to offer best returns for investors. We have updated our algorithms for Jitta Score and Jitta Line to improve the precision of Jitta’s stock analysis as follows

  1. Analyzing business growth by paying more attention to the consistency of growth
  2. Studying the change of gross profit margin of commodities with high fluctuation in price such as energy, steel and agricultural products in the past 10 years to be more effectively in identifying good and cheap stocks
  3. Calculating stock prices comparing to Jitta Line to show the cheapness of stocks and changing the term ‘Above / Below Jitta Line’ to ‘Over / Under Jitta Line’ to align our understanding.

We have updated the investment backtest in Jitta Ranking from 2009 to the latest year, including the forward test by showing the list of shares in Jitta Ranking Top 30 of early 2020 and returns at the end of the year. Click to see

I wish you a very happy new year and successful investment in the year of 2020.

Trawut Luangsomboon
Jitta CEO and co-founder