12/02 newsletter
** Market
Just when I boasted November's easy money last week, Wall Street decided to take some of that gain back :-) But have faith in November and December (if you ever trust the stock market). There are cash flow reasons that make these months shine.
** Portfolio
I have finished my one year benchmark of the stochastic model. It is a long and trying journey (Every time I buy or sell a stock, the uncertainty of future just make my heart beat slightly faster. But that is all stock market is about -- the future). But the result is quite good.
12/1/2004 - 12/1/2005
- Portfolio return is +18.7%
- SP500 is gaining +8%, small-cap, nasdaq have similiar gain.
- Mid-cap is gaining +16%, slightly below my portfolio.
- Value index outperformed growth index by ~1%.
I have traded almost 60 stocks this year (almost one very week, Ummm). About half of them are related to the restructuring of the portofolio. Also in the first half of the year, many bank stocks are being stopped out. I do care about turnover, just to make sure you do not misunderstand. Turnover increases cost of commission and spread. And I have ~30% of fund not in tax-sheltered accounts (IRA). Therefore, if excessive capital gain is incurred, I only enrich Uncle Sam, not myself. As it turns out, the stocks sold are losing ones, therefore, I
may even have a capital loss this year. Not too bad.
The portfolio is tracking the model well, within +/-2%. The success is that the model indeed works. I can count on it for my accumulation of capital. The bad part is that the worth of my financial intelligence minus the model is only ~1-2% :-)
Steve
Just when I boasted November's easy money last week, Wall Street decided to take some of that gain back :-) But have faith in November and December (if you ever trust the stock market). There are cash flow reasons that make these months shine.
** Portfolio
I have finished my one year benchmark of the stochastic model. It is a long and trying journey (Every time I buy or sell a stock, the uncertainty of future just make my heart beat slightly faster. But that is all stock market is about -- the future). But the result is quite good.
12/1/2004 - 12/1/2005
- Portfolio return is +18.7%
- SP500 is gaining +8%, small-cap, nasdaq have similiar gain.
- Mid-cap is gaining +16%, slightly below my portfolio.
- Value index outperformed growth index by ~1%.
I have traded almost 60 stocks this year (almost one very week, Ummm). About half of them are related to the restructuring of the portofolio. Also in the first half of the year, many bank stocks are being stopped out. I do care about turnover, just to make sure you do not misunderstand. Turnover increases cost of commission and spread. And I have ~30% of fund not in tax-sheltered accounts (IRA). Therefore, if excessive capital gain is incurred, I only enrich Uncle Sam, not myself. As it turns out, the stocks sold are losing ones, therefore, I
may even have a capital loss this year. Not too bad.
The portfolio is tracking the model well, within +/-2%. The success is that the model indeed works. I can count on it for my accumulation of capital. The bad part is that the worth of my financial intelligence minus the model is only ~1-2% :-)
Steve
posted by Steve at 5:58 PM
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