The Moat Index · Paper portfolio
The Paper Moat Portfolio.
A transparent, rules-only model portfolio: every year we equal-weight the 50 widest economic moats by our Moat Score and hold them until the next reconstitution. The rule is the manager — no name is ever added, dropped, or weighted by hand. We publish the rule up front, date every change, and benchmark it fairly against Berkshire Hathaway.
This is a paper portfolio — a hypothetical, for learning. No money is invested, and nothing here is investment advice, a recommendation, or a prediction. It is not a “beat the market” claim: on a fair, dividend-inclusive benchmark, a broad quality screen like this has roughly kept pace at similar risk. Distinct from Score My Portfolio (your own holdings, in your browser).
What the rule would have done, 2012–2025
Read these before the numbers — on this data they are as large as the result:
- Survivorship bias inflates every line here. The universe is companies still filing with the SEC today; those that went bankrupt or were acquired at a loss simply aren’t in it, so their failures never drag on the rule. This flatters a quality screen the most, and it is not correctable with this data — plausibly worth a few percent a year.
- One regime, 14 years. 2012–2025 was a historically strong run for equities. 14 annual observations is a small sample; do not read a durable edge into it.
- Gross of everything. No transaction costs, taxes, slippage, or capacity limits. Annual reconstitution is assumed frictionless.
- Not a beat-the-market claim. The honest reading is that a broad, equal-weight quality screen roughly kept pace with a fair benchmark at similar risk, and the recent tape has favored the index.
Growth of a hypothetical $1, each line starting together at the first entry. Rule D is the paper portfolio (equal-weight, total return); Berkshire (BRK.B) is on the same total-return basis — the fair bar. The S&P 500 line is the price index (dividends excluded), shown dashed for reference because it understates the market. Gross of all costs and taxes.
| Return year | Names | Rule D | Rule D (−100% stress) | BRK.B | S&P (price) |
|---|---|---|---|---|---|
| 2012 | 50 | 17% | 17% | 20% | 15% |
| 2013 | 49 | 37% | 34% | 26% | 25% |
| 2014 | 49 | 20% | 18% | 27% | 12% |
| 2015 | 50 | −2% | −2% | −12% | −2% |
| 2016 | 49 | 12% | 10% | 25% | 12% |
| 2017 | 50 | 31% | 31% | 20% | 19% |
| 2018 | 50 | 7% | 7% | 3% | −7% |
| 2019 | 49 | 23% | 21% | 13% | 30% |
| 2020 | 50 | 28% | 28% | 0% | 14% |
| 2021 | 50 | 29% | 29% | 32% | 30% |
| 2022 | 48 | −24% | −27% | 3% | −20% |
| 2023 | 49 | 31% | 29% | 17% | 24% |
| 2024 | 50 | 19% | 19% | 24% | 24% |
| 2025 | 50 | 4% | 4% | 10% | 17% |
| Cumulative | 642% | 544% | 540% | 437% |
Each return year is the calendar year after the cohort was scored (entry is the first market close on or after Jan 1). Rule D is the equal-weight mean total return of the top 50 by moat composite that year, excluding names with no elapsed/priced return and renormalizing the rest. Rule D (−100% stress) instead counts every unpriced name as a total loss — a deliberately pessimistic delisting bound. BRK.B is on the same total-return basis; S&P (price) excludes dividends and understates the market.
The data’s own caveats, word for word
- Point-in-time reconstruction: each score uses only SEC filings on file by Dec 31 of the cohort year; restatements filed later are ignored, and filers with December fiscal year-ends are scored off the prior fiscal year (their 10-K arrives the following spring).
- Survivorship bias: unless delisted companies were ingested explicitly by CIK, the cohort is drawn from companies still filing with the SEC today — names that failed or delisted since are missing, which flatters any forward-looking comparison. Companies whose filings had already gone stale at the cutoff are computed but excluded from the ranking (the stale count). The same caveat extends to returns: a name that stopped trading mid-window reports null with a note, never a guessed return through its delisting. Price histories are keyed by each company's ticker symbol as of today; a symbol that changed hands between issuers during a window can misattribute price history.
- Scores are business-quality only: no prices feed them, so valuation, margin of safety, and price-dependent verdicts are absent. Forward returns are a separate join of market data made after scoring and never influence any score.
- Forward returns start strictly after the information cutoff: entry is the first trading close on or after Jan 1 of the year following the cohort year, and each 1y/3y/5y window runs anchor-to-anchor to the first trading close of the corresponding later year. Windows that have not fully elapsed are null — never annualized or extrapolated from a partial period.
- Return basis honesty: company returns are total returns (split-adjusted closes with dividends reinvested at the ex-date); the S&P 500 benchmark is the ^GSPC price index, which excludes dividends and therefore understates the index by roughly its dividend yield in any comparison. A second benchmark, Berkshire Hathaway (BRK.B), is computed on the SAME total-return basis as the companies — Berkshire pays no dividend, so its dividend-adjusted series equals its price series, and the same code path is used so the comparison is strictly like-for-like. Each record labels its own returnBasis.
- Educational, not investment advice. Hindsight makes every backtest look wiser than anyone could have been at the time.