Friday, October 20, 2006


Weekly Summary: 4 out of 5 ain't bad

Although my portfolio wasn't quite able to stay in the plus column today, on the whole, this was a solid week, with my portfolio making gains four out of the five trading days. In total, the portfolio gained $12,993 (1.7 percent) to a new all time high of $784,079. And even better, I handily outperformed the indices this week, which is the first time I've been able to achieve that in quite a while. I guess I always measure my performance in relative terms. As perverse as it sounds, I think I feel better if my portfolio falls one percent while the rest of the market dives 3 percent than if my portfolio gains only one percent while the rest of the market gains 3 percent. Perhaps that's a strange way of looking at things, but I suspect many people who manage their own portfolios feel the same way.

I see that Pine Valley declared bankruptcy after the close. It's one of the few stocks that I've ever ridden down to zero, and given that the stock was initially 1.5 percent of my portfolio, it's also going to be the biggest dollar loss that I've ever incurred. The only positive thing I can say is that I never doubled down on this stock. It was also one of the few stocks that I bought after hearing about it on the news as opposed to finding it through one of the stock screens that I run. So I guess this serves me right for deviating from an approach that has worked so well in the past.

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