Sunday, April 10, 2011

Ten Years of Stock Investing

I don’t use Technical Charts. Buy and Hold still works, but temporary anomalies do occur, and sectors do fall in and out of favor. Right now, the Health sector and the Energy sector are the places to be.

From time to time, a stock investor should check how his stock picks have done. We always hear how this investor has made a killing on this investment or that investment, but we never hear about the bad investments. I decided I wanted to check out how I have done in the last decade on my stock picks. It was quite a chore, but here are the results.

In the last ten years, I have made a total of 82 stock picks, 32 which I still currently hold. I have made some great trades, and I have made some downright awful trades. My batting average has been 29 losses and 53 hits with a 65% success rate.

My Best Picks
McDonalds – up 217.20% Internal Rate of Return 19.25% (still holding for almost 7 yrs went up even during 2008)

Mastercard – up 410.65% Internal Rate of Return 89.23%

Activision - - up 287.26% Internal Rate of Return 54.51% held for 4,65 years

Chicago Mercantile Exchange up 383.19% Internal Rate of Return 383.19% continued to go through the stratosphere after I sold it.

Intuitive Surgical up 106.85% Internal Rate of Return 304%

My Worst Picks

Cemex - Down 77.29% Mexican Cement Company. Internal Rate of Return -77.71 Triple Whammy Mexican Devaluation, Housing Crisis, and Chavez expropriating Mexican cement in Venezuela

Ebay – Down 67.99 Internal Rate of Return -35.78 Poor Execution at Ebay

International Speedway Down 61.34% Internal Rate of Return -31.63% Downward trajectory since beginning of recession. Going to races considered discretionary spending by consumers.

Allied Irish Banks – Down 14.75% Internal Rate of Return -19.07% I put this one in because this could have been a disaster. Ireland was the paragon of the global economy, but it became embroiled in the subprime scandal. I purchased this bank in the 40 dollar range, and it is now trading around 3.50. it is on the verge of bankruptcy.

Washington Mutual – Down 97% - need I say more. We all know what happened to Washington Mutual with the banking crisis.

Bank of America – Down 53.79% Internal Rate of Return -50.03% bought after credit crisis, and it kept falling. Should have kept it but panicked and exited too quickly. Recovered after bailout. Should have waited until it fell further. This was a risky stock but should have understood that the administration would have never let the banks fail. Should have, could have, would have….The story of my life…

And then there is the story of Exelon where coincidence is just the beginning. I buy a stock that holds 24 nuclear plants, and then Japan happens, but it could pan out to a net positive for Exelon. Only time will tell. Meanwhile I hold my breath. Such is the world of stocks.

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