In 2010’s contest with other bloggers for the four top stock picks I had a simple goal – I wanted to improve on my rank from 2009. That was a fairly low bar to pass since I was second from the bottom last year. I kept it fairly simple in 2010 and went with two ETFs I figured would easily climb up, DVY and SSO and then I added in two others to try for a bigger bang, UUP and UCO. The first two worked out great for me and the latter two disappointed and would’ve been worse if UCO didn’t jump more than 4% on Friday.
I didn’t trade on UUP all year, but did sell options on the other three. Although UCO finished the year down it was still my most profitable position in 2010 as I worked it with profitable long puts, short puts and short calls repeatedly. This competition doesn’t play to my trading model since we can’t sell options or exit positions when sentiment changes, but it’s about as fair as it can be given the amount of time we all are willing to dedicate to the game. At least we count dividends.
This is how my picks performed over the past 12 months:
- UUP – Closed 12/31/09 at $23.08. Closed 3/31/10 at $23.79. Closed 6/30/10 at $25.06. Closed 9/30 at $22.84. Closed 12/31/10 at $22.71. (-1.60% for the year)
- DVY – Closed 12/31/09 at $43.91. Closed 3/31/10 at $46.02. Closed 6/30/10 at $42.43. Closed 9/30 at $46.84. Closed 12/31/10 at $49.86. (+17.79% for the year)
- UCO – Closed 12/31/09 at $12.68. Closed 3/31/10 at $13.06. Closed 6/30/10 at $9.53. Closed 9/30 at $10.09. Closed 12/31/10 at $12.50. (-1.46% for the year)
- SSO – Closed 12/31/09 at $38.24. Closed 3/31/10 at $42.01. Closed 6/30/10 at $32.21. Closed 9/30 at $39.37. Closed 12/31/10 at $48.05. (+26.84% for the year)
This competition must be getting fairer because I’ve come off the bottom pairing and made my way up to the exact middle of the bunch to number five out of nine bloggers. In 2011 (posting picks on Monday) I’ll have to push a little harder to work my way up against these folks who have no trouble beating the market averages.
Here are the final results for the 2010 Stock Picks contest:
| Rank | Prev Rank | Blog | Performance |
|---|---|---|---|
| 1 | 2 | The Wild Investor | +27.15% |
| 2 | 5 | WheredoesallmyMoneygo | +26.56% |
| 3 | 1 | Dividend Growth Investor | +26.08% |
| 4 | 3 | Zach Stocks | +20.87% |
| 5 | 4 | My Traders Journal | +10.39% |
| 6 | 7 | Million Dollar Journey | +3,79% |
| 7 | 6 | IntelligentSpeculator | -0.45% |
| 8 | 8 | The Financial Blogger | -1.64% |
| 9 | 9 | Money Smarts | -35.25% |
(I’ll add in links to each blog as their posts go live.)
Alex, your comment on UCO was most interesting–it was your most profitable position although it finished down in 2010 because you worked it well with options. This significant comment highlights the differential trade between equity trading and options trading. I wonder if UCO options trade does not require special taxation treatment (like K-1 for example). Is UCO stock/option trading taxed like regular stock/option trading? If yes, does this explain your 2010 UCO results? I wish you the highest rank in 2011. Regards.
Thanks Rob. I’m not sure about the taxation. Right or wrong I’ve treated it as normal short term capital gains. My “win” with UCO was aided because I started off with a hedge on UCO that I ended up selling for a profit and then took the option assignment and continued writing covered calls and naked puts for the rest of the year on UCO where most finished out of the money and left me with 100% profit on the contracts. That let me quickly eat away on my cost per share. I could’ve made a lot more if my last covered calls weren’t so low.
Thanks for the positive feedback for 2011 too.