First caveat: Although stocks were up 5.44% for the month, they were only up 3.68% since the Jan 2nd open. There was a big jump between the Dec 31 close and the new year’s opening price. All of the stocks in this portfolio were bought AFTER the Jan 2 open.
Second: I bought one stock each day, so the average holding time was just over ten days.
My return was 3.78% (all of the stocks purchased are mentioned in this month’s prior blog posts). By comparison, if you had bought equal shares of the index each day this month at the opening price, you would be up 1.30%. So you could say I trounced it.
I seem to have done a lousy job of timing my purchases since a lot of them went down the day I bought them. I’ve been studying that and think I can improve on it with significant effects on my results.
Third caveat: One month doesn’t prove much and my method may well tend to underperform in a down market.
While I’m not explaining how I choose stocks (obviously not by their CAPS rating!), part of my method is to instill a discipline for buying and selling. Since I was starting from zip, I bought one stock a day in January. In February I plan to buy (and sell) a minimum of one stock and a maximum of three stocks per week. When I sell it will be whichever current holding scores lowest in my system. Whether it has been going up or down is largely irrelevant. The portfolio will eventually hold between 24 and 30 equities. I’m estimating an average holding period of 8-12 weeks which would result in monthly trading costs of around $150.
This portfolio is not my entire portfolio. I have some long-term holdings and a number of etf’s, etc.
I have done well in the past (in real life as well as in CAPS) and believe I found a way late last year to significantly improve my results. That’s what this method is based on.
My biggest loss was ZAGG (-10.5% since 1/11). Four others were down between 1.7% and 4.5%.
My biggest gainers were: PRCP (20.1%, 1/3), NTWK (15.42%, 1/16), APFC (12.65%, 1/7), FFCH (11.48%, 1/4) and WHR (11.22%, 1/2).