I just checked my performance for 2013 and as shown here I’m pleased to see that I managed to beat the S&P total return. In a nutshell: in 2013 I made €48,204 (Euros) with a €135,859 investment, equivalent to 35.5% versus 32.4% for the S&P total return. What makes me more happy is that it’s the 6th year I could beat that index. What makes me even happier is that this year it was done with the biggest amount invested, therefore the gain is substantial in absolute terms. I do though worry because besides 2008 and specially 2009 none of the latest years’ performance has been significantly higher than the S&P.
2013 has been a sabbatical year. I concentrated on doing things like spending time with my family and building my house. So basically this year I did little on the securities investing front. I did look at the market and kept an eye on my companies. Since I found no interesting new investments and no reason to sell I kept my portfolio basically intact. The gains from 2013 are mostly the result of investments from earlier years.
I had little activity, but it’s worth mentioning it. I added 13 shares of CAF, a spanish train builder. Most of the shares were bought under 280 Euros (currently at 380). Some of them were for my sons, I manage money for 3 of them.
I recently liquidated my mother in law’s portfolio. She needs the money to buy a new apartment. She had a very good result of around 60% for a period of a little more than 2 years while I managed some of her money.
I sold out my 20 RYAAY (Ryan Airlines) shares. I like the CEO and the company but I have learned to dislike the business enough to stay out of it. I sold them in May at 49 and the shares are currently at 47, I did not avoid a terrible drop but they did underperform the market quite a lot since back then. I had a bit over a 30% profit in a long time, with a small amount invested, so the investment was not good.
My 300 TLT shares short position was closed @107.98 by my broker by the end on October. TLT is currently at the same price so I have not lost anything by staying out of it. On the contrary, I saved the payment of dividends and interests on the short amount. I have been thinking, specially today, about reentering the trade by shorting TMF (Direxion Daily 20+ Year Trsry Bll 3X Shr) a leveraged fund. The good thing about it is that it allows me to invest much less on the short amount for the same possible return, therefore saving money on the short interests. The other good thing is that it hardly pays any dividend compared to TLT, there is a substantial saving there too. I still think that the long dated treasuries market is way overvalued and I plan to profit from it. The TLT short played out well even though it was closed (by luck) prematurely. I believe that there is still much more room for the treasuries to go down so I might soon enter that trade again, possibly with TMF this time.
I added a couple of VXX shares short by the end of August. I still think that VXX is designed to go to 0 and plan to keep shorting it indefinitely and add to my shorts at every possible opportunity when the volatility jumps a bit.
I sold out my small XHB (home builders fund) position (8 shares) by the end of May @32. It was a small legacy position that I had since before 2008 (the housing crash). I waited and sold out when it recovered its value. I normally dislike having funds and small positions so Im glad I got rid of it.
On the selling put options side I had some good results by closing some shorted puts after they became worthless. Like that I basically gained 1400 USD by closing in January 2013 a couple of Berkshire Hathaway strike 62.5 and strike 65 puts which had become worthless. I did the same in the 1st semester 2013 by closing a shorted strike 10 AMAT put and a strike 10 Dell put gaining 143 and 191 USD respectively. I also made some 120 USD by selling covered puts against my TLT short position, not much, but every amount, no matter how tiny, is always welcome.
On the forex side I basically made a bit under 600 Eur profit. Mostly by borrowing dollars to buy Dell shares when the dollar was quite low with respect to the Euro. When the Dell shares were converted to cash due to the privatization for the company I covered the dollar debt at a lower dollar price.
With Dell (without counting the 600 Eur profits from the dollars borrowed to enter the trade) I basically had a 5000 USD profit when the merger was consumed @13.75 by the end of October. I invested in average 1000 shares, the vast majority in 2012. The investment profit took around 18 months to materialize so it was quite a good one. 4250 USD were gained on stock appreciation, 550 on dividends and 191 on a shorted put.
The activity above produced results that are quite small compared to the appreciation of the companies I had from before. The best move in 2013 was basically to remain inactive and let the companies I admire and own run its course.
I think 2014 can be a tough year. I do not see much value left and even though the companies are not overvalued in average, the playing field starts to get tough. I am not used to play and profit in markets like this. So I am being cautious, to say the least. If I concentrate on something it will possibly be on reducing positions and following specially closely what I own.
That would be all for now, sorry for my past silence. I now feel that I have more time to dedicate to investments and I possibly will come back to them soon. For the time being I am doing one of the best investments I discovered: building a great house that I am shaping with love ! I do not want to publish pictures of it yet because I believe that a work of art should only be shown when it’s completed so for the time being I will only show a rock I found that was obstructing our garden (I’m the one on the right) !
Best wishes for 2014 !