PrototypeZ (< 20)

Looking Back 2012 - CAPS Learnings

January 03, 2013 – Comments (0) | RELATED TICKERS: CLF , RAD , NOK

Even in times where there is economic uncertainty, both domestic and abroad, value plays and solid dividend players can be snatched up at a discount. Some hidden winners also may be in the fold, but the results depend greatly on research with a dash of luck. In 2013, want to take more of the luck out of the equation and leverage more fundamental analysis. 

Favorite picks from 2012:

ZIP - Zipcar

CLF - Cliff's Natural Resources

NOK - Nokia

HMC - Honda Motor Company

GT - Goodyear Tire 

2012 Stinkers:

RAD - Rite Aid 

STP - Suntech Power

OCZ -  OCZ Technology Group

ALU - Alcatel Lucent 

The favorites were all picks for beaten up stocks based upon fundamentals and other technical analysis. These performed very well, and even exceeded expectations in the case of ZIP. On the other hand, the stinkers were ones where I bet against the stock believing that they were beaten and heading for bankruptcy. While they still may be on the road for bankruptcy my risk tolerance for the bet favored limiting the losses too greatly. As a result in RAD, I bailed too early on the outperform call and got scared when it rallied back after the bet against it.

In all, betting against stocks that were beaten down in the $1 range is too risky for my taste and will look to close out any other bets in this segment. Will just stick with what I know and what works, finding value in great companies that are oversold or ready for a technical rally.