Friday, March 30, 2012

Returns as of Q1 2012

Well I'll just come out and say it... this was a great quarter!  As you may recall, after a rough 2011, I entered 2012 with a very concentrated portfolio of just 5 companies.  Interestingly enough, two of these companies (BAC and SHLD) had been major contributors to last year's poor performance.  Here's a quote from my year end write-up (

So what went wrong in 2011?  Three things: SHLD, BAC, and JOE.  And I'm not sure whether to call it stubbornness or arrogance, but I've effectively doubled down on Sears and re-initiated a significant position in BAC.  My hope is 2012 will prove to be a better year for these struggling companies, and with Sears's assets and BAC's core business, they both have a ton of potential. 

So far it looks like my stubbornness has paid off, as both companies have rallied quite a bit.  Here's a quick summary of where I stand overall:
  • I came into the year with $138,179.  As of 3/31/2012, my portfolio had appreciated to $246,569, for a total gain of $108,390.  Since I didn't deposit/withdraw any money, this increase was straight appreciation.  
  • My portfolio is up 78% YTD, while the S&P is up 12%.
On a cumulative basis, my returns for the last 6 years and 3 months are summarized below vs. the S&P (click all pictures to enlarge).  I also updated the "My Returns So Far..." page to the right.
Here's 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.
Below are my current holdings, along with their current value, cost basis, and any unrealized gain/loss.
I also added a new display - a bridge between 12/31/2011 and 3/31/2012.  As you can see, I exited one position during the quarter (SHLD Jan 2013 calls for $18.2K), which is reflected in the increased cash balance.
As for closing remarks, I'd like to stress that with a portfolio as concentrated as mine, sometimes the stars will align and things will work out for no other reason than dumb luck.  Going forward, I don't expect to ever have another quarter like this one, nor do I expect to continue beating the S&P by the almost 20% per annum I've done historically.  However, my hope is I'll continue to beat the market by a reasonable amount, after all the name of my blog is "Me vs. Efficient Market Theory."

As always, I'm happy to answer questions and I appreciate comments.  Feel free to email me at