I am happy to report that my Portfolio has finished up 12.88% for the month (+327% annualized).
I started out this year hoping just to finish up 10% for the year, but now I am shooting for 10% a month. I know that I will have my bad months, but as it stands now I am on track to potentially double my money by the end of 2012.
Why am I having such a good year?
I have traded about 13 years in my life, 12 of them resulted in positive returns (the 13th being a minor down year). The only issue was, I had hardly any money in the account, and earning 20% on $5k isn’t really anything to get excited about now a days. I did grow about $1k into $8k from the age of 12 until 22, but now I’m really riding the lightning. Leverage via options amplifies all gains and losses. I’m currently operating a portfolio of about $13k in a high risk and high reward mentally.
I am operating like a hedge fund. I have longs, shorts, and even some silver Am I completely immune to risk? Absolutely not. Could this turn against me? Of course.
The simple fact is, you have to take risk to make money. Think about it. Buying rentals, buying precious metals, even buying your own home. You are assuming risk with everything you do that tries to promote growth. Your stocks, mutual funds, or retirement accounts can devalue or get hit by inflation, Your home can devalue 30% in the matter of years (as we have seen), and a bad tenant can destroy your profit margins for years on even solid positive cash flow rental property.
What went well for me this month?
- Dow Jones Index 1/100th fund (post to follow)
What went poorly for me this month?
- ESI (ITT Tech)
Lessons learned: None.
I would tell you that I’ve learned my lesson with stocks like NFLX and ZNGA, but I continue to keep a small portion of my portfolio in high risk/reward securities.
Do I seen any weakness in my Portfolio as it stands for September?
Yes, I’ve become too long (about 65-70%). I justify it by saying I have silver, but frankly I’m too long on the market right now. I hope to correct this before potential adjustments.
I played around with Pandora (Symbol: P) when it was bouncing another $10, and I even bought into the stock (going long) and later took a loss. The stock has since gone to $12. This would have resulted in a large gain, but I got cold feet. I stand by my decision to sell Pandora 100%. I do not regret it even though it bounced up. I believe there is a very strong possibility I will be avoiding Pandora from here on out. More to follow on my options of these newer IPOs.
Something I called Right
Facebook. I said back during the IPO that I would be interested in FB when it was around $10 a share, and that $30+ was insane. FB closed around $18 today. I’m still 100% AVOID on facebook. They have earnings in October and I don’t think the market even understands how to process any information that comes from Facebook. This stock is a complete fire drill. Avoid.
Something I called wrong (but did not invest in)
Six flags, I thought this was a golden opportunity for a short, but I was dead wrong. The stock is operating with so little debt (because of their bankruptcy) that they are a very solid company right now. I called a short at $53.58, but after earnings, this stock was off to the races. It got up to $62+ a share, before it came back down to $55.23. Very strong possibility I will completely avoid this stock.
Well there you have it, a very successful August.. one for the books. Now it’s time to reset, dig down and do it again in September. Monthly target is now 10% (knowing it is an ambitious goal).