Q2 2011 Performance

Awful. That’s probably the best way to describe my performance to date. Q2 was not kind to my portfolio as I went from around 4% behind my benchmark to 15%. That’s right 15%. I have rebounded somewhat since then, but not too much. This type of performance does raise the question as to whether I should be picking stocks myself or if I should just buy ETFs.

What Worked?

Nothing. I really do mean it. None of my companies moved up anything meaningful. GPIC was up a few percentage points for the quarter, but that’s it. I was cushioned by having around 20% cash.

What Didn’t Work?

My portfolio. The biggest losers were…

AEY – down around 15% since I first bought. I have purchased more, but am cautious on making it too large of a position.

HPS.A (tsx) – down 25%. A poor quarter combined with a questionable acquisition has led to a major sell off. The mistake I made with this one was paying full price for a fair company, when I thought it was a good company at a fair price. Lesson learned. I am reviewing this position.

MGO (tsx) – down 40%. The TRE scandal has hit all Chinese companies. MGO was hit particularly hard as there is some uncertainty over the PEC deal. I am in the process of doing a full post specific to MGO.

HCI (tsx) – down 12%. This could just be volatility. The company is having a tougher time than expected implementing their ERP. More recently the company purchased shares in a small start-up. This shows that management is more inclined to attempt to build an empire not return cash to shareholders (not a good sign). I am currently reviewing this one as well.

URB.A – down around 10%. The NAV of the company fell and so did the share price. Some shares have been repurchased. The margin of safety is still there and I continue to hold.

Housekeeping

Sold ZUN.to. I couldn’t quite get comfortable with some of the accounting and returns on the company. I took at 10-15% loss.

Adding to ARD.to on dips. I also added to SO.to.

Though NTRI was flat for the quarter, it has taken a beating year to date. WTW introduced a new product that took market share away from NTRI. It is tough for me to judge the success of this company. The last earnings beat were due to reduced advertising. Since marketing is such a big deal for NTRI, I have trouble seeing how lower advertising expenses will help drive sales going forward. Though it is nice to see a cost conscious company, the fact that advertising was cut so much and management feels that it won’t affect their position in the market means that much of the previous advertising may have been a waste.

Final Thoughts

Once again I find myself pressed for time. It is tough to get the right amount of time to actually focus on picking stocks. I don’t think my poor performance has anything to do with mental capacity or the way I view volatility, I think it has to do with time. I just need more. I have started pouring more of my time into picking companies.

Though I wouldn’t judge my performance on a year alone, it is obvious that something is lacking. Let’s hope the rest of the year is a bit better. I am finding quite a few interesting ideas and hope to post a few shortly.

Dean

4 Comments

Filed under Portfolio Performance

4 responses to “Q2 2011 Performance

  1. chip

    Hi Dean,

    I know all about being strapped for time. It is usually the investment research that takes the back seat.

    You’ve probably mentioned this in another post, but just wondering what you use for a benchmark?

    Chip

    • I use a mock portfolio that consists of 3 ETFs. CBQ.to (25%), XIU.to (50%) and SPY (25%).
      My thinking was not to just compare myself to the TSX or the TSX Venture, but to compare how I would do if I didn’t try to pick individual companies.

      Dean

  2. Any more thoughts on HPS now that Q2 earnings & outlook were released?

    • Sorry for the long response time.
      I have been reviewing HPS.A but am still undecided what to do. Last 2 quarters were tough. I do like that they are raising prices in certain markets. I have a feeling that the acquisition will be tougher to integrate than expected, but that may already be priced in. With 20% cash in my portfolio and these levels I will hold for now. There are also some other companies I would like to replace in the portfolio before HPS.

      Dean

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s