Although I beat the market last year and currently still beating the market since inception, I’m not satisfied with how 2012 turned out.
First the positives:
- Much less activity. 26 total transactions in 2012 vs 41 in 2011 vs 82 in 2010.
- Less mistakes
- Analyzed more companies than in 2011
- Didn’t look at stock quotes as much
Now the negatives
- Less mistakes, but made some big ones that affected performance. Made bad contrarian bets. Underestimated certain factors of my analysis.
- Didn’t make use of my advantages.
I have more mistakes which I get to below, but I grouped it into two main points.
I’m not too interested in discussing positives because I know that positive things will happen as I keep working to eliminate the negatives.
Still Made Big Mistakes
Here is a small collection of mistakes I made in 2012.
Mistake #1: I compromised my selling thesis and held on.
Lesson: Take gains especially if something shoots up quickly.
Mistake #2: Not sticking to things I understand. My bets on junior miners have failed miserably. Too many uncontrollable risks and variables.
Lesson: Learning new industries is good, but when investing before understanding as much as possible, it leads to losses.
Mistake #3: Not taking advantage of my small investor advantage.
Lesson: Although I hold a lot of OTC stocks, I could have done much more research into finding less well known and under followed companies.
Mistake #4: Bad judgement calls. Fell into behavioral errors.
Lesson: Radioshack has been a bad call. I neglected the industry, trends and what my eyes told me whenever I walked past a store.
Hopefully when I report 2013 results, I won’t be having to report these same mistakes again.
Performance Since Inception
After a bad 2010 and 2011, it does feel good to finally have had an up year, but the market was up considerably. 16% for the market is a huge year where it lifted everything.
So I can’t contribute 2012 to skill.
My goal is to perform great on an absolute basis over the long run. There is no point in losing 50% in one year and then making 100% the next year. It just evens things out on an absolute basis.
At the moment, I’m on track but anything can happen. Best way to get luckier is to work harder.
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