Charlie Anderson's  Instablog

My performance this year was awful. The only bright spot was total trading, which was way down. In all other areas I underperformed and lost out. My portfolio lost nearly a quarter of its value this year, even as the market stayed flat. This was mainly because I tried to time the market and failed. My average losses reflected this fact in that my average loss on positions held for two weeks or less was 16% greater than the average loss on positions held for less than one month. Nearly all of the positions I closed this year lost money. This represents a fundamental flaw in my approach: I have been too aggressive and I have not taken the time to learn about my companies. Going forward, this is an issue that I must address.The only bright spot (I guess) was the amount of trading I did. I executed 35 trades in 2011, down from over 100 in 2010. My average holding period also increased from 26 to 57 days, although this fails to acknowledge positions I still hold (which would increase the value for 2011). A large percentage of my poor performance was contributed by the third quarter, when I tried to time the market numerous times, only to fail.

Going forward, I plan to protect myself from myself by letting my portfolio rest. I have increased my bond exposure by 10%, moving into a high yield fund. I like my holdings, and I need to be more patient.

After another bad week, my pessimism remains undaunted. There seems to be no shortage of new bad news. This week saw risk of a Greek default, the resignation of a major European economic official, and a lackluster response to Obama's latest effort to pump up the economy. Things look bad. The pattern that we are in right now is called a bearish pennant. It is, as you may have guessed, bearish. As I predicted in my post on August 4th, the market retreated to approximately 1150. I will admit that my prediction wasn't great, as that was not exactly the market bottom. I also expected the market to bounce back up to around the 1260 level, but it only got up to about 1230. Now it look set to continue falling. Supported by both the technicals and fundamentals, it makes me glad I got stopped out of GM & MT this week. I'll look to buy back both of these at lower prices in the coming weeks depending on conditions.

The market had a rough week, and I was on vacation for the latter half and didn't watch too closely. No idea where the market will go from here. I got stopped out of GM, and I'm looking to get back in ASAP. Still own RIG, NRG, CLF, and MT. Liking my portfolio for the long term.