OTC Speculator's Year in Review

As the closing bell rings on 2007, I figure that it’s time to quickly take stock of my achievements this year. So while keeping things brief, here are some of my thoughts.

Overall return: This year proved to be an incredible year for my combined accounts, which ballooned from about $26,000 at the start of the year to just above $59,000 at year end. Granted, I did add about $9000 to my combined accounts throughout the course of the year, but even if we subtract that money, my overall return for the year was in excess of 90 percent. That merits lifting a good bottle of champagne tonight.

Two worst trades of the year: Not that I’m a masochist, but I do think it is instructive to take stock of my worst trades of the year. To me, these trades were the worst not because they cost me the most money, but because they were caused by obvious and preventable judgement. So without further ado:

1) (SDTH)–I had this stock pegged from a fundamental standpoint and talked about the stock moving to double digits, but I became so overzealous with position sizing that I got shaken out for a substantial loss before buying back the stock at a much smaller quantity and riding the move higher to recoup most of my loss. Because of the oversized position, I was forced out of what would have otherwise been a very good gain.

2) (HRBN)–Again, over-sized positioning and failure to book profits when the stock moved up caused me to get washed out of the position this summer. I managed to catch the move this fall, but I could have made a lot more if I hadn’t been so greedy.

Two best trades of the year: You have to look at what you did well too, and now’s as good a time as any…

1) (OPBL.OB)–The trade that saved my year was selling this stock in the immediate aftermath of the news about BMO’s huge trading loss. I had done my homework and knew that (BMO) was a critical chunk of OPBL’s revenues, and so I did exactly the right thing by being conservative, booking profits, and waiting for more information. That sale saved me a lot of money.

2) (CPHI.OB)–Trading this stock has been incredibly profitable, and I have done an excellent job of buying the dips and selling the pops time and time again. Taking profits and readying the war chest to take advantage of big drops has allowed me to multiply my gains in the stock tremendously vs. a buy and hold strategy.

Overall, my trading in 2007 and my writing of this blog has really helped to further my trading acumen. While I’m not yet satisfied, I am encouraged by the growth I have shown as a trader. 2008 looks set to be a challenging year, but it will also be an opportunity to enhance my trading skills in a difficult economic environment. I’m excited to see what I can do next year, but for one night, let’s celebrate the past. Happy New Year!