Where’s Dean???

I thought I would just pop in to let everyone know I’m still here.

To be honest, this year has been horrible for me investing wise. I have literally had the worst year since I started. I don’t know if it’s something that is fundamentally wrong or I happen to be learning a ton of lessons in a short period of time. Either way, I have contemplated hanging up my hat over the last few months. I am still on the fence as to whether or not I should be investing my own money.

I have made some lifestyle choices that should allow me more time per week to focus on investing. I have also made some significant changes to my company analysis, valuation and portfolio management strategy. Time will tell if it works.

Dean

5 Comments

Filed under Random Thoughts

5 responses to “Where’s Dean???

  1. I think that I know how you feel; I had a terrible 2011 and I felt worse because everyone else seemed to have done well.

    Greenblatt has said two things that could be relevant. 1) we learn very little from our successes, it’s better to learn from other people’s mistakes, but our own pain is usually what causes us to reevaluate, learn, and improve. 2) you have to know in your bones that what you’re doing makes sense, so that you can survive the inevitable weak periods. The stock market does crazy things, and with a concentrated portfolio, probability means that even with good long-term odds – sometimes a lot of bad things happen at once.

    Some of the stocks that hurt me most last year helped me the most this year – and I had no expectation of that at the end of 2011. I had reduced my expectations along with the stock prices, even though very little had changed at the businesses – and I still know that this is the wrong way to evaluate companies.

    That’s enough about my problems – good luck!

  2. Saj

    It happens! Over the course of a year anything can happen, doesn’t necessarily reflect skill, just luck

  3. Dean,
    It happens and has happened to all of us.

    I wholeheartedly agree with Saj’s comment– one year is too short term to make any claims about skill.

    Try to take advantage of this slump and sow the seeds for growth in future years. Some of the best decisions are made in the self-reflective idle state of mind.

  4. Good post Dean. I invest with a mix of small caps and large caps. This balance helps keep me sane since small caps can have periods, where tax loss selling, lack of market interest, and overall market sentiments, can move small cap prices around. With small caps, demand is usually low, so discounts on purchase price are always an important factor — a tough lesson learned over many years.

    At present, I have just disposed of a position for a 150% gain in a small cap, but at the same time have had a large cap and 2 small cap positions move against me. 2012 has been slightly down for the year for me because of year end tax loss selling by other market participants, but the business valuations haven’t changed. 2013 will likely see these positions rebound and the portfolio will make new highs, helped in part by newly deployed capital in the temporary mispricing by the market. It helps to have the ability to value businesses which permits one to take the long view. It also points out the strategic value of holding large amounts of cash to take advantage of periodic mispricing.

    – O

    • …and just like that, some positions have started to turn up as year end tax loss selling abates. The overall portfolio begins verging on new highs. Mr Market, you’re a wonderful partner to have!

      – O

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