Category: Account Summary

One year ago today I wrote my first blog post.  I started off with $43k and now have $83k.  All of that, minus the 4.21% loss I’ve had over the past 366 (leap year) days, has been from contributions we’ve made to our investing account.

According to Morningstar, here’s how I compare to the major indices’ returns:

12 month S&P 500 Return: -2.92%
12 month DJIA Return: +2.99%
12 month NASDAQ Return: -3.57%
12 month Russell 2000 Return: -10.86%
S&P Midcap 400: -3.95%

I’m probably about where I would have been if I had split my investments among various ETFs.  Some funds might have been up and others would have been down.  I would have missed out on the fun I’ve had with this blog and with learning to be a better investor and would not be situated in a place that better prepares me for future years.  I firmly believe that I’ll beat all the major indices again this year as I did in 2007, but understand that at any single point in time I may be lagging.  Worrying about that will get me nowhere.

Along with the change in the amount of capital I have to work with now compared to a year ago, here are some other changes over the past year:

I’ve changed careers from being …

I had another down month in March to round out a very poor quarter.  This was my worst quarter for returns since both Q2 and Q3 of 2002 when my returns in each quarter were nearly twice as bad as this Q1 2008.  I learned a lot six years ago and think I’ve learned a good bit again and hope to continue to reduce my bad quarters’ losses and frequency again.

In my quest to reach my goals layed out last year I’m still cutting it close after losing more in March.  If I can contine depositing $2,000 each month (April, May, June, July) and can bring in $2,000 in April, May and June, I’ll reach my goal with a few pennies to spare.  I’m not against digging deeper in our checking account to push me over the mark if I’m close.  Actually, I might have more to deposit than planned.  We’re still trying to figure out what our monthly contributions can be with both of us (my wife and me) settling in to our new jobs and our insurance deduction and 401(k) contributions kicking in now.

My current account value according to Quicken is $78,311.83 and Ameritrade says my balance is $78,504.38.

Here’s how the returns break down:

12 month return: -7.25%
Since my blog’s beginning (4/8/07): -7.98%
I deposited another $2,000 on 3/12/08

According to …

After options expiration this weekend, this is where I stand on my positions.  I did no investing research this weekend due to the Easter holiday and our driving to and from family houses yesterday. Below is the summary of how my March options expired and my first thoughts on what I might do next.

My ADBE covered calls expired worthless.  I’ll likely re-write those calls or might dump the stock.  I still need to chart it.  They just beat earnings, so they could rally more than they already have if the rest of the markets continue upward.
My CAT naked puts expired worthless which means my CAT covered calls were assigned and my CAT shares were called away.  I haven’t even checked how I ended on the sum of all my options yet.  I know I took a loss on the underlying stock itself.
My DWA covered calls were assigned so I’m finally finished holding those shares.
My NYX (March 80, wow was I ever off) covered calls expired worthless.  I’ve already written new covered calls for April 60 which are now ITM.  I’m letting that ride to see if it comes back down again or just gets called away next month.
Both sets of my NVDA covered calls expired worthless.  While I’m begging for a rally that takes them back above 25, I’m going to have to consider selling some of my shares.  …

(I was looking for this post and couldn’t find it and finally realized that I must have hit save instead of publish.  sorry for the 3 week late update.  My losses are much greater since this post, but I haven’t edited anything outide of these parenthesis) 

I had an average month for my returns in February and that’s a good thing, especially considering that all of the major indices were down again and I was up. I’m glad I limited my bleeding to January.

I think that’s part of the trick with naked puts. Those of us who do it long enough will have some horrible months, but those of us who understand it going in will not let that one bad month stop us from trading a system that works in the longer term. I’m still down about $9,000 from my high (subtracting out my most recent deposit) and expect to be positive for the year within another four to five months.

My Taxable Account Summary:

Current Account Value: Ameritrade: $82,724.09, Quicken $82,873.54
12 month Return: 8.71%
Since 4/8/07 (blog’s beginning): 2.83%
Deposit for month: $2,000 on 2/1/08

The Major Indices Summary:

Market Volatility on 2/29/08:
CBOE Market Volatility Index

(^VIX): 26.54
(^VXN): 28.44

1 year S&P Return: -3.6%*
1 year Dow Jones Return: 2.32%*
1 year NASDAQ Return: 5.99%*
1 year Russell 2000: 12.44%*

* Source: Morningstar

I updated my diversification table on my Current Portfolio page and below.  I’m far too heavy in Tech since options expiration.  What kept me balanced before expiration is no longer part of my account and now I have half of my plays in Tech and it’s worse than that considering the dollar amount for each.

This will improve as I enter new positions, but I will prohibit myself from trading into any more Tech until I’ve removed one or more of these I’m already in.  This is such a good drill to do on a regular basis to make sure all your eggs are not in one basket.  In fact, what this tells me is that I almost have to dump some of my NVDA shares I’ve been debating about.  Before that, I might go ahead and take my losses on MOT.  I’m ready to start with a clean slate anyway.  I’m up on my covered calls, but I’m taking a bath on the stock.  I’ll have to sleep on this though as I don’t think there’s much downside risk left in MOT, just like I thought there wasn’t when it hit 15 and 14 and 13 and 12…

Services
  DWA – Movie Production - Theaters
Financial
  NYX – Diversified Investments
Technology
  MOT – Communication Equipment
  NVDA – Semiconductor – Specialized
  …

I’ve talked a lot lately about my bad trades, but I am taking a moment to reflect on the good which is most of what I’ve had the past few weeks.  It’s just that one bad trade can beat out a few good trades.  It continues to be a numbers game with my trading model.  I have to make sure I maintain my search for good trades to have premiums that help balance out my losses on positions like NVDA. 

I had the following options expire as of close yesterday.  The yellowish squares on the right show which options expired in-the-money (ITM).  Two were covered calls circled in green showing that I’ll be receiving cash from the sale of my shares being called away.  The two circled in red show that I had too high of a strike and will have to pay when the shares are assigned Monday morning.  The blue circles show what I would have had to pay above and beyond what I received if I wanted to get out of these positions before expiration.

 

I get to keep all the premiums since I didn’t buy back any of the options above.  All those gains go to cover stocks like MRO and my loss of $2500 that I will realize once the shares are called away.  I’ve written options on MRO for months and now …

I gave back a lot of profits this month and I’m glad the month is over, if only that also guaranteed my losses were done.  Actually I feel pretty good about my holdings right now and still expect to finish the year up nicely.  For the first time since I started this blog, a major index is beating me (the Dow ($DJI), by about a 1/2 percent).  If I annualized my losses for this month, I’d finish the year down 78%.  Interestingly, that’s not my worst month or even top five from the past 10 years.  As expected September 2001 was my worst, but I had a bad streak in 2002 that smacked me worse than this month and I recovered greatly after that as I plan to again.  I’ve learned a lot through some of my poor moves and will try not to repeat my mistakes.  I have a lot more money invested now than I did five years ago, but also have a lot more confidence.

I’ve had a series of bad trades that partly were caused by emotions in my investing which I was doing a good job of keeping in check when I had more time in front of my computer.  I feel like I’m moving back in the right direction (emotionally and literally).  I was so hectic this month I didn’t …

I finished off of my highs of the year and I still pulled out a 26.27% return for all of 2007.  I’m really happy with my account for 2007.  I always like to compare myself to the indexes, especially the S&P 500 since I’d likely have a large part of my portfolio in an index fund if I wasn’t actively managing my investments. I love that I beat the major indexes by so much.  Below is a list of what the indexes returned in 2007.

2007 S&P 500 Return: 3.53% 
2007 Dow Jones Return: 6.43% 
2007 NASDAQ Return: 9.81% 
2007 My Account Return: 26.27%

I’m not only happy about the return I had for the year, but also that I was able to contribute so much to my account.  I figured that if I could contribute $18,000 ($1,500 per month) every month and make 20% I’d have just under $59k at the end of the year.  If I could pull out another miraculous year and hit the 40% mark, I’d have over $65,000.  My 26.27% return didn’t meet the dream of 40%, but beat my basic goal of 20%.  The biggest factor was our contribution …

I’m still happy with my returns even after coming off the lofty highs I rode for most of the year. I never claimed I’d be able to maintain such rediculously high annualized gains as much as I’d like to do. What I have claimed I could do and continue to do is beat the major indices over the long term. In fact, I’m killing them still. My year to date returns are three and half times better than the S&P 500 and more than double the Dow Jones Industrial Average. 

I received a dividend of $143.33 from my NPLXX money market at the end of November.  I’ve been very happy with the move to keep my cash there while I have naked puts basically running for free.  The other cash I had sitting more idle in my account only gave me an interest payment of $4.23.  (Yes, the decimal is in the right place.)  I also was charged $5.27 for the couple of days I had some on margin from options assignments.  That really helps to illustrate on a very small scale how damaging running an account on margin can be.  Two days of a margin balance cost me more than the interest gained outside of my money market the rest of the month.  Admitidly, the margin balance vs the cash balance weren’t even, but not …