As has been the case in past years, I’m now going to close existing long & short tech stock picks. Why? Mostly because for tracking purposes, I prefer starting from scratch every year and evaluating my returns by year. Many of you know that I only have 1 remaining trade to close:
As of my writing this, that trade is down 8% or so which is not great but given the year, I won’t complain. More on that in a second. But first, let’s take a quick look at how both stocks performed since opening the trade on May 27th.
I remain a believer in Microsoft and do still like this trade even though it’s very challenging to short AOL as I’ve learned over the years. The company doesn’t have that much going on for it in terms of actual business but is able to do well through sales of assets, rumors of being taken over, etc. By the way, that Yahoo to buy AOL rumor sounds ridiculous to me. Am I crazy? Yes, buying AOL would make pitches for advertisers more compelling but doesn’t Yahoo have more than enough on its plate in terms of underperforming/outdated web assets? I’ll be VERY disappointed in Marissa Mayer if ever she pulls off something like this. Having a ton of cash to spend is not a problem and doesn’t need to be solved by buying crappy assets.
The Year In Review
No matter how I look at it, 2014 was an incredible year in terms of my long & short stock picks. As I wait to close out the final trade, the average trade has returned around 13% resulting in a 39.82% portfolio return. Too good to be true? I guess in a way it will be difficult to do better next year but I do think I’m getting better at playing my risk vs. reward on these trades which is helping a lot. Look at the returns by trade:
The big number here of course is the “losing trades”. In this type of trading, getting 60% of trades right is more than enough but this year I got 15/21 trades with positive returns. That is one stat I’d really like to either match or surpass next year.
I know several of you replicate some of the trades so hopefully if that was the case you picked among the 75% that I did well on:)
I don’t expect to make too many changes for next year and will be doing several stock picks in the coming weeks as I get my portfolio back. I can’t wait as it’s been a few months now that I’ve been holding back.
With all of that being said, I hope you all had a wonderful 2014 year and I wish you all the best for next year in terms of stock picks. I’ll be back and more active starting in January:)