Monday, October 24, 2011


Well today I sold my remaining 100 MAS LEAPS at $0.80.  With the market bouncing around a 2 month high I just couldn't justify holding this highly leveraged position with the expiration date only a little over a year away.

So how'd I do?  Well, I originally purchased MAS just over two months ago ( for a total outlay of $5,656.  I sold all 125 contracts at $0.80, so I my cash out was $9,960, netting me a profit of just over $4K.  In other words, not to shabby!

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Saturday, October 22, 2011

Dialing It Back...

On Friday I made two transactions: I sold my remaining 550 shares of AHS (at $4.25) and reduced my MAS 2013 LEAPS by 25 contracts (sold at $0.80 per contract).

If you click on the "zz AMN Healthcare Services" label on the right you'll see AHS has been a lot of work, a lot of ups and downs, and very little profit.  But I guess sometimes that's just how it goes, right?  Anyway, although I still think the shares are undervalued, they were such a small % of my portfolio that it just wasn't worth holding them anymore.

The MAS LEAPS, on the other hand, have turned out really well over a relatively short amount of time.  I bought 125 contracts at $0.45 about 2 months ago, so selling 25 of them at $0.80 is great!  Unlike AHS, with MAS I'm just trying to be opportunistic and take advantage of the price Mr. Market is offering, so don't be surprised if I continue selling in the days/weeks to come.

The other reason for selling both AHS and MAS was to make my portfolio a little less risky.  The market has rallied nicely since the start of Q4, and as a result the % of my portfolio in cash had fallen to the high 20's.  However, after Friday's transactions my cash % is back in the low 30's, and if the market continues to rally I'll probably continue to trim back some positions.

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Sunday, October 2, 2011

Returns as of Q3 2011

Man, these last two quarters have been miserable!  Not only have my returns been negative, but they've lagged the S&P too.  Oh well, I guess this type of thing happens with a concentrated portfolio.  Besides, over the last 5+ years I've managed to outperform the S&P by roughly 10% per year, so I'm still hopeful I'm doing something right!  Anyway, here's a quick summary of where I stand for 2011:  

  • I came into the year with $126,967.  During the year I've deposited $35,000 into my account.  YTD my holdings have DEPRECIATED by $22,073, leaving me with $139,894 as of 9/30/2011.  
  • YTD my annualized IRR has been -19.4% vs. -15.0% for the S&P (assumes dividends are reinvested AND the $35K I deposited was used to buy additional SPY shares at that day's closing price).  
As I mentioned above, even though I got my butt kicked these last two quarters, I'm still well ahead of the S&P for the last 5+ years.  See below for details (click image to enlarge):
I also included a waterfall graph that shows a little more detail.  The blue bars are the beginning and ending balances, the green bars show appreciation/depreciation, and the red bars represent deposits (click image to enlarge):
So what about my holdings in particular?  Well, in general I'm still cautiously optimistic.  In fact, I think some of my holdings have gotten down right cheap, especially SHLD, JOE, and AIG.  I'm also surprised we're seeing LUK trade this close to book value.  I mean these guys have compounded book value at 20% per year for 3+ decades and there's no premium on the stock price whatsoever!  Of course there's also plenty to be worried about; Europe's a mess, China's growth may be slowing, and Washington is slightly less functional then my 21-month-old daughter's daycare class.  Anyway, below is a snapshot of my current holdings as of 9/30/2011 (click image to enlarge):
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