Saturday, October 22, 2005


Weekly Summary

My portfolio continues to tread water. After a good start to the week, I lost $7,000 over the course of Thursday and Friday, and finished up $1,787 (0.3 percent) for the week. Although this was somewhat better than the S&P 500 and Russell 2000 (down 0.6 percent and 0.1 percent, respectively), I underperformed the NASDAQ for the second week in a row (up 0.8 percent).

Even though I have a very healthy gain for the year to date, it seems like 2005 has unfolded rather differently than 2004 as far as my investments are concerned. Although I will be hard-pressed this year to beat the 57 percent gain that I achieved last year, in some sense I am more satisfied with the way by portfolio has behaved this year.

First, and most obviously, the market has performed worse this year than last, so in terms of relative performance, I'm still doing very well. Second, last year's performance was very uneven. My portfolio was almost completely decimated by a very large and very stupid position that I took in one particular stock (NENG), which at one point accounted for a third of my portfolio. In fact, even this monthly chart of my portfolio's performance masks the true extent of the damage since it only shows end of month numbers, and at one point last August, my portfolio was down over 25 percent (nearly $100,000) from its all time high. Luckily, I was able to bounce back, but even then, lady luck gave me a helping hand, as I was able to benefit from a couple of massive pump and dumps (in MAHI and TAYD).

This year, in contrast, has been very steady. I was able to avoid doing anything rash when I went through by far the worst personal crisis in my life this spring. I attribute this at least in part to the fact that my portfolio is now extremely diversified (I've been trying to limit individual positions to no more than 5 percent of my portfolio, though if truth be told, COBR and TRT are now slightly above that level). This has allowed me to relax a lot more and when needed, turn my eye completely away from the stock market without worrying that I may lose the bulk of my savings.

Comments: Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?