Slow and steady often wins the race, North Shore, 2013.
On May 5, 2013 I wrote a in-depth article called, “Should I Invest In China? A Top Down And Bottoms Up Perspective.” My simple thesis was that with the Yen depreciating ...
Slow and steady often wins the race, North Shore, 2013.
On May 5, 2013 I wrote a in-depth article called, “Should I Invest In China? A Top Down And Bottoms Up Perspective.” My simple thesis was that with the Yen depreciating to 100+ due to Abenomics coupled with strong world markets, China must inevitably catch up in a risk-on environment. I then identified the Chinese internet space as the most laggard sector where investors should consider putting money to work. Stock picks included BIDU, SINA, and RENN.
So what happened with the stock picks since then? And more importantly, did I put my money where my mouth is or was I just pontificating like some useless Wall St. research analyst does with Neutral/Hold/Wait And See ratings? I hope you know by now that I don’t like wasting time writing about things I don’t know or care to act upon. Of course I invested in my thesis. I just didn’t invest enough.
Like magic, every single name ramped higher by 15-25% within three weeks after publication while the broader markets climbed 2%. It was almost as if someone got a hold of my article and forwarded it around, causing a buying frenzy. If there’s a chance this is true given the number of visitors to my site, is there any wonder why hedge funds keep their holdings as close to their chest as possible? Because of the fast ramp higher I was not able to accumulate as much as I would have liked.
Since publishing my post on China, my IRA grew by roughly $40,000. Sounds OK right? Not really since I started off with $400,000 at the end of April. I will usually take a 10% gain for the full year any day. However, a 10% gain is a 5-15% underperformance of my stock picks, equating to roughly $20,000 to $60,000 in money left on the table.
So what the hell happened to cause such a leakage in performance you ask? Ill-timed accumulation and exiting of positions as well as FEAR. Remember, I am the King of bad trades. The below chart shows the value of my IRA portfolio today. The pending activity is pending cash as a result of stock sales as I’m continuously worried about a market correction. At the same time, I’m not willing to place massive short bets either because the market is being artificially propped up by the Fed.
Current IRA portfolio.
MY IRA PORTFOLIO BEFORE THE BAD TRADES
You might be thinking I’m being greedy for being disappointed with a $40,000 gain within a month. And you’re right. I have made similar amounts of money trading in the past so $40,000 is not that unusual, even in this short time period. It’s all relative at the end of the day.
What really gets to me is leaving so much money on the table. With $20,000 -$60,000 I could go around the world on a luxury cruise for three months. I could get 13 year old Moose some fresh new tires and spark plugs. If I wanted to cheat on Moose, I could get a nice new 2013 Nissan Sentra for $20,000 or wait to get the new 2014 BMW 335i couple coming out this fall for $60,000. I could even treat myself to some fresh ramen noodles instead of always buying the $2 instant stuff I’ve been eating as punishment for being unemployed.
Here’s another kick in the nuts. My portfolio over $450,000 just a couple weeks ago! The high was actually closer to $455,000 but I failed to take a snapshot that one fine day. The fact that the markets have moved up over the past two weeks while I proceeded to lose ~$15,000 from the top is a maddening experience. As you can tell from my positions, I take very concentrated positions with Apple at one point account for $178,366.50 or 40% of my entire portfolio.
SO WHAT THE HELL HAPPENED?
So what on earth made me bleed out $15,000 in a couple weeks? I want to share with you in as visceral a writing style as possible an inside look on how a neurotic trader’s mind works.
* Apple scared me stupid. Apple has had quite a rebound after hitting a low of $385 before announcing their 2Q results. I went relati