The end of first year
July 17, 2007
– Comments (4)
Today marks the end of my first year on the stock market. And what a year it has been. I think I broke every business advice investment rule they give you, and it worked for me.
It seems most things I found had a good upward trend very quickly and I broke that "let you winners" ride rule all the time. I sold and took the profits. The way I looked at is if a stock goes up say 10% in two weeks, well, anualized it comes to 1.1^26-1=1092%, so I'd sell. So, that isn't really called investing, except that I did do research before I bought my stocks...
I kept a tracking portfolio of my early stocks, with my exit price, and that portfolio is up about 35% in say 9 months. Some might argue that that is strong evidence that staying with stocks you've researched works, and I'd certainly agree.
And, some of picks after did very well. Eastern Platinum was a pick of mine last fall. I got it at $1.06. The A warrants were 30c. Today Eastern Platinum is $2.53 and those A warrants are $1.08, so 139% on the shares and 260% on the warrants, but I didn't hold them. I took about 50% on each in about 3 months. 50% in 3 months is 406% annualized.
Northern Orion was another pick and I went for the warrants on that one because they were in the money and had little premium. So, my $2.16 warrants are now $4.24, but I sold those at about 50% as well.
Eastern was a pick before I started blogging, but I wrote about Northern Orion early, at that $2.16 price, as I wrote about Roca at $1.40 which is now at $3.47, and Quadra at $9 and it is now at $17, and Blue Note at 46c and it is at 70c.
I consider those my strong picks because I wrote about them when I first found them, and in some cases I wrote about them more than once.
My biggest loser was Versatile, and that one a fellow teacher was raving about. In retrospect, it is interesting to me how we trust people around us and we do not do the same due diligence. I call it my biggest loser, but I only lost about 5% on it. It is my biggest loser because I didn't check it out properly and when I did, well, what a dog.
And the evidence of stock manipulation on that one is digusting. For a couple weeks every day ended with a $250-300 purchase of shares to meet the ask bid, and often this thinly traded stock also had these same small purchases after a sell to the bid. So, odds were if you peeked in, you would have the impression that it was trading at the ask price, when the bid price was typically 10-15% less.
Call me crazy, but I tested this manipulation, I set up the lowest ask price and then I did a small sell to the bid. I tried it three times and each time there was a small purchase of my ask shares. Then I just dumped my shares to be outta there and I've continued to watch the stock manipulation. I was also ready to dump because this manipulation had made me concerned so I torn into the financials and I really didn't like what I found. And the lesson was do not trust your collegues, and let your guard down when considering a stock.
Anyway, end of my first year and how well did my system work? Well, I'm up 170%. It worked very well for me, far beyond anything I ever expected, but you could also say I worked more than full-time screening stocks. I've probably looked at 1000 or more stocks over the past year. It simply isn't a method that would work if you weren't constantly assessing stocks. One could probably tell I didn't like some I looked at by the comments I made on them.
So, the Dow is up 29.9% from when I started, and that means I beat the Dow by 471%.
The S&P is up 25.5% so I beat it by 569%. The TSX went down and then went up, straight up, 42.3% from its low last fall. I used it low figure in my calculation and so I beat that by 304%. I beat the Nasdaq by 583%.
So, my goal for my second year is to perhaps have more passive investing.
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