rofgile (87.40)

2011 Personal Year in Review

December 29, 2011 – Comments (0)

Investing highlights of my real life holdings and thoughts on the year. 

My biggest success in 2011 : Tech - Google (GOOG)

One of my biggest holdings.  I was tempted to sell for a long time, as I bought in at a high price to start this one.  However, it has been the best performing stock in my portfolio.  It appears that tech is the best neighborhood to be invested in this year, and companies like AAPL, GOOG, and AMZN are very smart investments.  All of these have things in common - large positive cash flows, no debt, and are disruptive to competition.  They all also have significant moats, Apple in the iPad (which I totally miscalled in 2010-11 as a flop)/iPhone/iTV/iTunes/hegemony, Google in search advertising/Android/Youtube, Amazon in online shopping.   

My biggest loss in 2011 : Renewable energy stocks (AMSC, Vwdry.pk, FSLR)

Solar and wind are hugely growing industries.  More installations each year at double-digit growth rates.  So what the h#@ck went wrong?  Mainly China.  Any western industry that doesn't have a moat (through technological advantages mostly) against the sheer over-production of China is in deep trouble.  China is on a treadmill of over-investment stimulated growth - if they don't make certain crazy growth targets at the village, state, and country level there is hell to pay.  So, you have a lot of over investment in production, over production, and goods flooding markets at profitless pricing.  That's the Solyndra story in a nutshell.  You also have widespread cheating, lying, and deception in Chinese companies.  AMSC was crushed when a Chinese company reneged on contracts, bribed employees and stole company secrets.  Finally, the Euro-crisis has deeply damaged one of the largest renewable markets. The United States is also held in state of delayed action, as spending on renewables is no longer in fashion here (due to Tea-party congress-critters).

Ugly!  I am still holding AMSC and Vwdry.pk.  AMSC could get a big boost if court proceedings against Sinovel turn well.  Vestas could seen a huge stock turnaround if EU crisis continues to stabilize and the huge short interest on Vestas leads to a rout of covering.  I might buy into FSLR, as this is still a very profitable best-of company.   

My best decision of 2011: Selling EGLE at $2.50 a share, and not looking back!  

This company is a goner, it is now below $0.90/share.  After the Korea Lines bankruptcy, EGLE began to release news that one of its lenders was disagreeing with EGLE about money due.  That was my red flag that said it was time to leave this ship before it sank.  

Mixed positions (MTW): 

I'll probably continue to accummulate MTW shares at these prices, if it stays low for a while and I can have some cash.  It got ahead of itself in 2011, I sold some at high prices and bought back in some at lower prices.  I still like it.  They have some union issues though..

Predictions: 

 EU better in 2012 than 2011, the major crisis point happened in the last two months.  This is similar to March 2009, when media was still talking about how the US was going to nationalize banks - but the crisis had already resolved.  

 President Obama gets 4 more years.  The economy is improving monthly with hiring.  Housing backlog, and EU were dampeners on growth, but that is changing.  Decreased oil imports and higher production also helping GDP.  Lowering gas prices as slight stimulus.  All these things, combined with a totally ugly set of Republican opponents (and possibly a neat 3rd party candidate in Gary Johnson) spell a big democratic win.

 Congress gets re-shuffled.  There has never been a more unpopular congress since we got these Tea partiers in the mix gumming everything up.  Really, look at what historians are saying or historical polling data.  This is the worst congress in half a century to Truman at least.  

 S&P will continue to rise in 2012.  Economic fundamentals have caught up to stocks, stocks are now behind on sentiment.  

 -Rof