To all, here are the results of the 1997 portfolio. I did the
calculations using the number of shares Dan put in the mock portfolio.
An equal weighting would have been considerably worse but Dan
underweighted the more speculative issues.
Read and weep:
Symbol Last trade Shrs Value Paid Gain %chg.
CPCI 12.25 754 $ 9,236.50 13.25 - 754.00 - 7.55%
MRVC 21 13/16 606 13,218.38 24.75 -1,780.12 -11.87%
ANCR 5 1/8 862 4,417.75 14.50 -8,081.25 -64.66%
AMLJ 5 5/8 381 2,143.12 13.125 -2,857.50 -57.14%
MCRE 6 3/8 339 2,161.12 14.74 -2,835.73 -56.75%
LKON 0.63 965 607.95 2.8125 -2,106.11 -77.60%
TOTALS $31,784.82 -$18,414.72 -36.68%
I wonder if this is a typical year for the average SI investor (in
spite of all the gloating we often do here). I suspect so.
Note - MCRE was MTLS when first chosen. MTLS acquired a company and
changed to MCRE. MTLS shares became MCRE shares.
Lessons learned? (1) Speculative stocks are going to fleece you much
of the time, given enough time. (2) The tech sector is much higher
risk than others, in fact most people might consider steering clear of
it, it is more volatile. (3) The market is very likely 'oversold' in
techs right now. On balance, I guess most of the better companies are
a 'buy' right now, in spite of earnings in decline due to a global
slowdown. (4) The safest pick in the portfolio was CPCI, which was
chosen largely on value criteria. It survived OK even though its
story changed for the worse. (5) The only other survivor was MRVC.
It should be noted that although it did not live up to its promise, it
had relative safety and continues to be a good pick. It was a
medium-cap company.
Possible key lessons: (1) always think about value, as well as growth.
(2) be afraid of small caps, or at least do not overpay for them.
Another lesson of course is that timing is everything. Anyone can look
like a genius for 2 weeks, but how do things look for the longer term?
Similarly, although things look bad now, CPCI, MRVC, ANCR, AMLJ,
MCRE, and maybe even LKON could be good picks over the long haul.
Another lesson is, stick with these companies in terms of your
research...WATCH them...but YOU CAN AFFORD TO WAIT to buy them for a
fair price, when it is clear that the story is unfolding as it should. |
