Friday, June 28, 2013

A Recap of the Last Four Years

Let's talk past history and more specifically, mistakes I've made.  I started investing in the market in 2009.  That was one year after I spend a big chunk of my savings buying a house - 10% down - 4br house for a single guy.

Mistake #1 - buying a house.  Today that house is worth 12-13% less than what I paid for it.  I am renting it out and desperately need to refinance as it costs me $700 out of pocket a month.

In 2009, I decided to start investing in stocks - specifically dividend paying stocks.  Let's move quickly through my successes.   I didn't have a formal plan, so I was just trading, or investing without a goal and thinking I was smarter than I was.

Victory!
a) Javelin Pharma - this was buyout play that was recommended from an analyst friend, Myriad ended up agreeing to buy them and I sold at a 37% gain.
b) HD, VZ and MO - these were all dividend plays that were up nicely from 2009 to 2011.  I sold to rotate into other names - T and PM, for example.
c) Visa - Visa was a growth play on electronic payments.  I got in right after the IPO and road it up to the 85.  I should have held, but the dividend wasn't high enough.  Obviously this was a mistake in hindsight.
d)  MCD - McDonalds was always a favorite of mine, and I sold a chunk in 2011 because I was overweight and needed to send some cash overseas.
e)  WMT - Walmart is the same story as McDonalds, I was simply overweight the name and decided to trim back.

Now the mistakes.

Mistake #2 - Holding British Petroleum after the spill.  My decision to purchase the stock wasn't necessarily bad, it was the lack of foresight to see the dividend cut and stock drop following the spill. Lesson learned,  sell a stock when a major disaster hits and the legal troubles are just about to begin.

Mistake #3 - Exelon was a purchase I made chasing yield. I wanted a safe utility and ignored the facts and trends.  The stock price declined and eventually I sold, but not soon enough.

Mistake #4 - Obagi was purchased on a buyout hunch.  The business was growing but it would have been a better fit for a larger company that could absorb their product line.   I expected to hold this for a year but sold out in 5 months when the price dropped more than my liking.  The company subsequently was bought out 4 months after I sold it for 30% over my purchase price.  Lesson learned, have conviction in your purchases.  In this part of my portfolio, I need to be certain of my reasons for purchase and holding.

The important thing to learn here is that one must have a sound plan and should stick to it.   Since the end of 2012, I've created a business plan to which I will adhere.  Prior to that, I was just buying and selling this and that based on casual research.  Below is a summary of all my casual trades.  In the next two blogs, I'll review Q1 performance and trades followed by Q2 performance and trades.   I'll also share a summary of my business plan in the coming post.

Purch Initial
Sales Date Shares Price  Cost   Sale Date   Sale Price   Amt   Divs Paid  Gain/Loss  % Return 
OMPI 7/30/12  130.00 15.348  1,995.24 11/9/12  12.18  1,584.00  -    (411.24) -20.6%
FCX 9/9/11  25.00 43.00  1,075.00 10/4/12  40.75  1,018.75  28.12  (56.25) -5.2%
MJN 9/6/11  20.00 68.50  1,370.00 10/4/12  72.65  1,453.00  28.40  83.00 6.1%
HAS 5/15/12  30.00  36.00  1,080.00 9/18/12  39.00  1,170.00  10.80  90.00 8.3%
WMT 8/20/10  20.00  50.20  1,004.00 6/20/12  68.15  1,363.00    359.00 35.8%
MFA 9/6/11  30.00  8.00  240.00 2/13/12  7.52  225.66    (14.34) -6.0%
GT 8/3/11  200.00  15.13  3,026.00 10/28/11  15.11  3,022.40  -    (3.60) -0.1%
MCD 5/21/08  17.00  59.50  1,011.50 8/31/11  91.06  1,548.02    536.52 53.0%
ABT 12/8/09  31.09  52.91  1,645.07 8/30/11  50.94  1,583.72  79.96  (61.35) -3.7%
VZ  2/12/09  112.65  29.35  3,306.79 8/23/11  35.52  4,001.33  305.36  694.54 21.0%
MO  8/31/09  223.13  18.70  4,172.73 7/29/11  26.40  5,890.63  455.07  1,717.90 41.2%
V 3/19/08  100.00  65.76  6,576.20 7/1/11  86.97  8,697.00    2,120.80 32.2%
ATVI 10/16/09  200.00  12.25  2,450.00 12/2/10  12.14  2,428.00    (22.00) -0.9%
EXC 10/28/09  52.46  47.68  2,501.52 10/8/10  43.15  2,263.65  106.82  (237.87) -9.5%
ETP 10/26/09  53.12  43.53  2,312.20 6/7/10  44.31  2,353.75  136.84  41.55 1.8%
BP 11/30/09  30.00  57.00  1,710.00 6/2/10  37.00  1,110.00    (600.00) -35.1%
HD 11/3/09  71.06  25.09  1,782.57 5/17/10  35.37  2,513.39  32.42  730.82 41.0%
JAV  10/16/09  1,200.00  1.60  1,920.00 4/12/10  2.19  2,628.00    708.00 36.9%

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