Thursday, June 30, 2011

Q2 2011 Returns

Well it looks like we've got another quarter under our belt, so that means it's time for another performance update.  However, this time around I've added some new exhibits I think you'll like, so read on!
  • I came into the year with $126,967 and since then deposited $35,000 into my account.  YTD my holdings have appreciated by $8,340, leaving me with $170,307 as of 6/30/2011.
  • YTD my IRR has been 12.4%, whereas the IRR of my hypothetical S&P Portfolio is 11.3% (assumes dividends are reinvested AND the $35K I deposited was used to buy additional SPY shares at that day's closing price).
Below I included a waterfall graph that compares my results vs. the hypothetical S&P - the blue bars are beginning and ending balances, the green bars represent appreciation, and the red bars show deposits (click to enlarge).

Additionally, I've also included a summary report that compares my portfolio to the S&P from 2006 through Q2 2011.  As you can see, the differing IRR's have had a huge impact on the respective ending balances.
Lastly, I wanted to take a sentence or two to talk about my holdings and the market in general.  With regards to the market I have absolutely no idea whether it's under or overvalued, although my gut tells me to err on the side of caution (which is why my cash balance is so high).  As for my specific holdings I'm actually pretty optimistic - I think CSCO and BAC are significantly undervalued and should do well over time.  As for LUK and TTT I expect the owner/operators to continue deploying capital and earning attractive returns for shareholders.  Lastly, I think SHLD and JOE are both undervalued and misunderstood (AND they are also controlled by two of the best capital allocators out there) - so while I have no idea what the future will bring I think the market is significantly underestimating the upside at these prices.  Anyway, see below for a snapshot of my portfolio as of 6/30/2011 (click to enlarge).

Questions?  Comments?  Email

Wednesday, June 15, 2011

Adding Money (Again)...

Today I deposited an additional $10K in my account, bringing my total assets under management to roughly $166K (of which $62.5K is cash, so I'll be looking to put some of it to work).  Obviously this won't impact my IRR calculation - after all this is simply an increase in AUM and not appreciation/depreciation of the stocks/options I hold. 

Additionally, since I track my returns relative to the S&P, I'll need to update my hypothetical S&P portfolio to keep everything on an apples-to-apples basis.  To do this I simply assume I purchased $10K of the SPY index fund at today's closing price of $127.02, thereby creating a similar growth in AUM.

Thursday, June 2, 2011

A Triumph of Stubbornness?

I don't know about you, but when I make a good decision I like to THINK it's due to above average intelligence or some unique insight that only I was capable of making.  Of course, once I stop fooling myself I usually realize my good decision came about due to something else entirely - usually luck but in this case stubbornness.

Here's the background - in May of 2010 I purchased 1200 shares of AMN Healthcare at $8 (  Shortly thereafter the stock absolutely plunged, droping as low as $4.14.   Now here's where the stubbornness comes in - rather than hold or sell I dug in my heels and bought more at $4.68 ( 

Today the stock's hovering around its 52-week high so I decided to sell the original 1200 shares (long term capital gain) for $8.54.  I would've sold my whole position but I figured this would be a bad strategy from a tax perspective (since most of my gains have come from the shares I bought at $4.68 and I've held these shares less than a year).

Questions?  Comments?  Email