Tuesday, April 16, 2013

My Investment Performance in 2012?

As I look at the other investment blogs written by small investors like myself, I often come across a summary of the author's past year or quarter's returns. I can't do that though, because I just don't know. I classify my assets as equities (not counting cash and bonds) and everything else. I have some idea of the gains in the equity portion of my portfolio. I think I am regularly beating the S&P 500 total return index, but I can't be sure. At any given time I may add cash to my brokerage accounts, or the holdings may generate cash through dividends or capital gains. I may also take away cash to pay bills or taxes on April 15. So with all the mish mash of money going in and out, I can't figure out what is my return without excessive effort. And I am too busy tracking news from my holdings. Even if I could track my returns over a short term of a year or quarter, I don't think the information will be very useful. Instead, I like to look at my individual holdings and break them down into components and estimate how they fared in 2012.

Health Care / Contrarian

This group has the out of favour stocks that I love to own. I own Wellpoint (WLP) and Pfizer (PFE). Wellpoint is a real stinker right now because 1) it's margins are worse than it's competitors recently and 2) Obamacare could mean stricter regulation and scrutiny. Well, since these two factors really came into light last fall, WLP has gone up more than 30%. Pfizer has similar problems and is also rising with the market.

Another contrarian stock is Seaboard (SEB). It's my biggest holding and went up around 50% last year. I am selling a bit here and there.

Result: beat the market average

Old School Tech

I bought into this group in the last few years because they are just too cheap to pass up. No, I am not talking about Google or Apple or Facebook. I am talking about Cisco, Microsoft and Intel. The darlings of 13 years ago but who the markets now perceives as behind the times.

This group is continuing to be undervalued, I sold a bit here and there when I need the money for something else.

Result: (probably) lagged the market a bit

Resource Stocks

I own Chevron and Transcanada. Chevron has been really good to me. I have had it for almost a decade. The last time I added to my position was when 2008-2010 when it dipped. I just wish I bought more. Transcanada is a stock I don't really understand. This company makes money mostly through transporting natural gas over its pipelines. Its rates are fixed, but it has a P/E regularly over 20. I was a bit wary of the high P/E and sold most of my position in the last year. I still have a bit left because I want to avoid capital gains tax.

Result: beat the market average

Small Caps

My smallcap portfolio is well documented on this blog. I may be beating the market a bit, but it is really too early to judge this recent group.

Result: beat the market average

Everything Else

This is an eclectic bunch, from Berkshire Hathaway to Sears to Brazil Telecom. The Brazil Telecom investment (called Oi) is a real drag. However, their dividends are lumpy, and it could be as high as 20% in some years. I really am not sure how the stock has done considering the huge dividend. I suspect a small loss. But a small loss in a rising market is a blow.

Result: lagged the market

So the conclusion is I am doing ok. I track the S&P 500 more than most people's portfolios. But looking at a short term like a year isn't really useful. It would be much better to look at the markets over a full business cycle. I have gone through two crashes, in 2000 and 2008. And I came out of them ok. I think I am beating the S&P 500 total return by a bit over that time. I think!

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