It’s been six months since my last update, and we’ve seen a wild ride with the stock market. Overall things have been good with my fund.
I’m trying to be as transparent as possible with this fund to show what I’m doing isn’t BS or made up. If I do poorly, I have no issue showing the results. If you want to see my trades, you can visit TradeKing. I am relying on Quicken to give me accurate performance results.
Let me be clear – I’m not suggesting you make the same trades as I have. What I am suggesting if you have enough savings, and think you are decent investor, to try using a small part of your portfolio for some risk taking. I’m not suggesting you bet the farm. For my family, the investments listed here are a small portion of our net worth. Basically I’m stating don’t try this at home unless you know what you are doing. The goal is for me and you as the reader to become better investors.
The broker of choice, TradeKing does allow a nice way to publicly display my results. As a discount broker, I’ve been very satisfied with their service and still recommend them.
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I was very fortunate and did very well with my fund for 2012. According to Quicken, my return was 43.40%, easily beating most indexes. This does not include a small dividend from Apple of $82.15. I was able to add $10,100 into the account for 2012. Slightly exceeding my annual funding goal. Even though I haven’t followed through with my riskier bets via options this year, I still had a decent run of performance. The account’s value as of today is now valued at $27,606.13, with $15,512.62 in cash.
I sold most of my Apple stock (AAPL) on October 26th at $609.43/share before the huge drop in the stock price locking in my gains. The shares I sold were locked in as long term gains.
I’ve kept my position with Google (GOOG). It has since increased to $715.19/share. I still believe Google has some decent upside potential and am a long term holder.
After the Sandy Hook tragedy, I bought shares of Smith & Wesson Holding Corp (SWHC) and Sturm, Ruger & Company (RGR).
I’m sure some readers are in shock that I’ve bought these two stocks after the shooting. What a heartless/insensitive thing to do right? That I’m profiting from the deaths of these children.
Let me be clear, I’m not buying because of the shooting itself. It was a horrible tragedy, and I have three children of my own. I think it’s terrible such things could happen in our society. With that said, I believe nothing will be solved by our government taking action. If anything, they will make the situation worse. So it is a bet against our government and the fears caused in society from their actions. Some of the fears are justified, some are not. Either way this will cause an increase in sales with both firms. In a free marketplace, the profits or gun sales would have no effect from the Sandy Hook tragedy. Since guns are highly regulated, it makes the market that much more manipulated.
I bought the stocks because historically I know how stupid our politicians are. They will act in haste because they have to “do something”. They will create new laws that, while they seem nice on the surface, will be ineffective at the core problems. The laws will cause fear with the general public and increase the sales for both companies. So far I’ve been proven right with this bet. After President Obama’s executive action yesterday, both stocks were up 4%.
I plan on trading SWHC and RGR as well. I still think there is a little more downside risk, however once I can find a nice technical entry. My wife and I were discussing the whole debacle and she made an interesting point. Criminals were more than likely jumping out of there seats when the administration announced their motives towards gun control. This means that prices of guns will sky rocket!
I totally called the gun stock thing day of as well (just didn’t act on it for whateve reason). It’s like clockwork. After every shooting, these stocks rally incredibly. Perverse, but so repeatable, it’s kind of absurd.
What are your thoughts on DDD? That’s my one big theme for the year – 3D printing. So far, killin’ it since I bought a few weeks back!
I personally like 3D printing, think it is the future, though I don’t think it’s 100% ready yet to go main stream. As far as a shorter term investment play, maybe.
1) Why the apple sell at 600? OBVIOUSLY turned out to be a fantastic move but what was your thinking?
2) Any option plays?
1. A number of reasons. The stock had quite a decent run up, government was threatening to increase taxes next year (true or not was a whole other issue). So my concern many other investors would lock in their gains. I wanted to do this before the crowd did. The other factor was iPhone 5 sales (which we will know finally today), I suspect will disappoint. While I use ONLY Apple products for my business, my concern is their future profit margin has only one way to go. DOWN. Companies like Samsung and Google are encroaching into their margins. In addition, the Apple iPad Mini while I think is needed is again hurting their bottom line. Not only because the iPad Mini has less of a profit margin, but many are buying the iPad Mini INSTEAD of the full size iPad.
2. At the moment no. It’s been a time issue to do enough research to do smart option plays, and then watch them. It’s much easier to be long a stock: than short, or do option plays.
Also as of today I no longer have any position in AAPL.