Welcome back my friends that know I do this every six months. For everyone else, hi!
At the end of June and the end of December I follow the advice of Peter Lynch. If you can’t describe the companies you’re invested in, and why you bought those stocks, then ask yourself if you should keep them. I extend that a bit and use the exercise to track the changes in the companies, the stocks, and my interest over the course of years. I typically hold stocks for at least four years, so each company has my version of its history recorded in these exercises. The easiest way to search back is to check my previous blog posts. (I’ll get you started. Semi Annual Exercise Mid 2012)
This has been my toughest investing year. Small companies with great potential, and even revenues in some cases, have dropped and dropped again. The mainstay stock that was DNDN is now gone and I’ve had to nibble through underpriced stocks to pay basic bills out of a dwindling portfolio. My mortgage company is not pleased with the results. Details about the backup plans, job search, and ramifications are throughout my posts.
It’s already late enough on New Year’s Eve, so I’ll keep this short. Normally, I’d already be posting and heading off to socialize, but this is a working holiday season – and that’s good news. A couple of consultations, a major client task, and shepherding my new book (Walking Thinking Drinking Across Scotland) and my art exhibits means that I’ve been busier working on work than on my portfolio. Like I said, the portfolio is dwindling. Its position on the to-do list priority list dwindled too. (Amazing that all of that work is not enough to pay my bills – yet.)
But, back to stocks.
Since my 2012 mid year review:
- In the first half AMSC was down by about 50% – and in the second half dropped another 40%
- In the first half DNDN was down by about 80% and in the second half was completely sold (No More Dendreon)
- In the first half GERN was down by about 50% – and in the second half dropped another 20%
- In the first half GGOX.OB became GIG and doubled! – and in the second half dropped 30% even as they made more money
- In the first half MVIS was down almost 80% – and in the second half dropped another , what? They rose 50%? June divots happen.
- In the first half RSOL was down almost 50%. – and in the second half dropped another 30% and was up by about 30% today. No, the 30%s don’t cancel.
- AMSC has yet to recover from “The Sinovel Incident”, which sounds like a movie title. Maybe corporate spy movies should be the next big movie genre. AMSC also hasn’t announced stellar sales of, well, any of their products that impress.
- GERN continues to guess wrong on coin flips. Key clinical trials continue to come up wrong. The great potential seems to be slipping away. One substantial success could make all of the difference; but in the meantime, they have to continue spending money that they get through borrowing, dilution, or fees.
- GIG continues to grow revenues, staying just below profitability. But they’re growing! But the stock is down. Rational markets, ha!
- MVIS is up? I had to double check. That’s not its historical trend. Ah. My mid-year data point was in a price divot. Look back to last year and the market cap is effectively flat.
- RSOL is probably down because sales are down and that may be because worries are up. Investors are probably pinning solar power plays to politics and subsidies rather than the long term and growing trend in the need for renewable energy sources.
Regardless of the news and my situation, I am a long term optimist. I’m not quite sure how I am going to get through my current situation, but I know that the best way to get through anything is to not stop in the middle of it. Some of my faith and confidence in investing has been shaken, but I also know that such a series of unfortunate coin flips can as equally likely be followed by more than enough fortunate tosses. That would bring back my faith in markets, or at least statistics and the return to the mean.
Here’s the End Of 2012 edition of my semi-annual stock portfolio exercise. It is a long list of links to Investor Village, The Motley Fool, and Silicon Investor because I think the discussion should happen in a broad forum. Feel free to comment here, but also feel free to post links out to other sites as well. One of the greatest resources individual investors have is other individual investors. Our shared voices can be more powerful than any official financial institution.
Happy New Year!