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battery514
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About Me: I reside in New Jersey with my wife and my two dogs. I have a B.S. degree in Accounting with a minor in Finance, as well as an MBA in Accounting. Currently, I am employed as a forensic accountant, and am pursuing my CPA designation. I love the stock market, and picking stocks. I spend... More
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Invest. Get Rich.
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  • 2010 Portfolio Performance Review
    The Wilshire 5000 closed the year at 13,360.12, up from 11,497.41, or 16.20%, for 2010.  The Wilshire 5000's 200-day moving average finished the year at 11,953.73, or 11.77% the year-end close. 

    Now for the portfolio...
    1) Verizon ($VZ) I sold at $35.75 this week, up 16.653% for the year, inclusive of dividends.  FTR, the recent spinoff, recently closed at $9.73/share, worth $68.11 to this portfolio currently.

    2) AT&T ($T) closed at $29.38, up 5.11% for the year, inclusive of dividends. 

    3) GE ($GE) closed at $18.29, up by 20.55% for the year, inclusive of dividends.

    4) TBT, ($TBT) the doubleshort U.S. Treasury ETF closed at $37.04, down 15.15% since my buy.  

    5) January 2012 Dupont ($DD)  $45/$55 CALL spreads purchased a few months back closed at $4.90, up 34.25% since my buy.

    6) Apple ($AAPL) closed at $322.56 up by 66.48% since my buy. 

    7) January '12 Citigroup ($C) CALLs closed at $.12, down by 72.73% since my buy. 

    8) Citigroup ($C) closed at $4.73, up by 18.84% since my buy.

    9) Goldman Sachs ($GS) closed at $168.16, up by 23.51% since my buy.

    10) January '11 S&P 500 ETF ($SPY) $127/$120 PUT Spread that I purchased on Wednesday at $2.92 closed at $1.76, or down 39.73%.

    11) June '11 doubleshort 20-year U.S. Treasury ETF($TBT) closed at $3.62, down by 22.15% since I purchased it on the 29th of December.

    Overall, the portfolio finished up by 16.52% (16.31% for the DOW Dogs), versus 16.20% for the Wilshire 5000. The current basket of eleven stocks and options that I am currently invested in, including dividends, was up 2.55% year-to-date. The spread between my performance and the overall market (Wilshire 5000) was .32% outperform.

    I thought I did a fairly good job of running this portfolio this year, and I look forward to seeing how I can do in 2011.  I think I have learned a lot this year, and have not only been able to test my own trading strategies, but have been able to discover a few new ones as well.

    As you can see from the data above, I was basically at a market-perform, with no commissions taken out.  However, the two trades I made in the final two weeks of the year cost me roughly 6% in outperformance.  Had I rested easy at the end of the year, and sat on my stack of cash, I would have been in much better shape.  Oh well, live and learn.
    Jan 03 10:24 PM | Link | Comment!
  • Best and Worst Trades Of 2010
     
    As we close the book on one year, and open the book of a new one, a lot of people take an introspective view.  I am no different.  As 2010 has come to a close, I thought it would be productive to take a look at my top five best (and worst) trades of 2010.  I have tried to link each trade back to the post I made announging the trade and my logic.  As you go through, please click through the links and read about what I was thinking, and how wrong (or right) I was.  My hope is that this makes for an interesting read.  Here goes:

    The Best:
    1) Apple (AAPL).  I purchased Apple for this blog on 2/4/10 at $193.75, and am still holding this stock.  As of the close on Friday, Apple was at $322.56, up by 66.48%.  I spent a lot of time in the malls through the Fall and leading up to Christmas.  I have got to tell you, that store is always packed at all times of the day.  I am anxiously awaiting the introduction of the iPad 2, and the Verizon iPhone.  I see no reason to sell this stock at this point.

    2) Whirlpool (WHR) $75/$85 December 2010 CALL Spreads.  I purchased these call spreads on 9/20/10 for $4.78, and sold them on 12/7/10 for $6.50, up by 39.78%.  I purchased this call spread after analyzing Whirlpool's stock using a stock screen that looks for names that are trading with a higher dividend yield than their historical average yield percentage.  I also used a similar strategy on another name which I will discuss later.  In going back through the blog, I have noticed that I did not talk in-depth about this strategy, which is something I will vow to do in 2011, as I have found it to be exceptionally logical and profitable over the last year.

    3)  United States Steel (X).  I purchased U.S. Steel on 2/4/10 for $44.11, and sold it on 3/11/10 for $60.42, up 36.98%.  At the time, U.S. Steel was trading near it's historic low, and it was an economic recovery play for me.  It was a quick turnaround, as the stock quickly increased almost 37%, and it was time to take profits.  Today, this name is trading at $58.42. 

    4)   DuPont (DD) $45/$55 January 2012 CALL Spreads.  I purchased these call spreads on 9/20/10 for $3.65, and am still holding them at $4.90, up by 34.25%.  This was the trade that I put on which was similar to the Whirlpool (NYSE:WHR) trade.  When analyzing the historic yield of this stock, I noticed that when it trades to it's upper range, the underlying stock does not move as quickly as Whirlpool's, which is why I used the longer-dated options.  Again, this one has worked out quite nicely thus far, as DuPont is trading at $49.88 currently.

    5) S&P 500 ETF (SPY) $102 December 2010 CALLs.  I purchased these deep in-the-money CALLs on 8/10/10 at $12.90, and sold them on 11/3/10 at $17.31, up by 34.19%.  During the summer, I thought (correctly) that stocks were overly cheap, and due for a move upward.  This was a leveraged play on the overall market moving up.  Obviously, it worked out just as I had planned.  Most likely, I will employ this strategy at least one more time in 2011.

    The Worst:
    1)  Citigroup (C) $7.50 January 2012 CALLs.  I purchased these LEAPs on 5/2/10 for $.44, and am still holding them at $.12, down by 72.73%.  While I am way, way down on this trade, the catalyst for this trade just occurred roughly three weeks ago.  I see the broad market going up through 2011, as well as Citi's earnings per share.  I am going to continue to be patient with this trade, at least for a few more months.

    2)  S&P 500 ETF (SPY) $127/$120 PUT Spreads.  I purchased these PUT spreads on 12/15/10 for $2.92, and am still holding them at $1.76, down by 39.73%.  I put this trade on believing the market was due for a correction, and am still holding firm on that belief.  When it will come, I do not know, but am going to remain patient with this trade for at least another week or two.  In hindsight, I should have waited until 2011 to put this trade on, as it was one of two trades that I made near year-end which greatly hurt my overall 2010 performance.

    3)  Doubleshort 20-year U.S. Treasury ETF (TBT) $35/$47 CALL Spreads.  I purchased these CALL spreads on 12/29/10 for $4.65, and am still holding them at $3.63, down by 22.15%.  I echo all of the sentiment from my #2 worst trade on this one, and it is way too early to tell how this will shape up.  I am going to continue to be patient.

    4)  ProShares Ultrashort FTSE China 25 ETF (FXP).  I purchased this ETF on 1/15/10 for $43.10 (adjusted for the 1-for-5 stock split), and sold it in the Fall for $33.26, down by 22.83%.  This was my lesson for the year on why ETFs are not always what they seem.  In the beginning of 2010, I believed (correctly), that China's stock market was going to hit the skids.  I was right, as China's market was down over 10% for the year.  The S&P 500 was up double-digits this year, for comparison.  The FXP is currently trading at $30.08, about 10% below where I sold it.  As I said before, this was my play on the downturn in the Chinese market.  While my market analysis was correct, my pick in the ETF to play that move was not.  Lesson learned.

    5)  Doubleshort 20-year U.S. Treasury ETF (TBT).  I purchased this ETF on 1/3/10, and added to my position later in the year.  My current adjusted price is $43.66, and the ETF is trading at $37.04, down 15.15%.  I am going to continue to hold this name, as I have detailed here.

    Welcome to 2011!  With any luck, we will be able to watch the stock market, and our collective wealth continue to increase throughout the year.  If you've been reading this blog for awhile, please continue to read, and tell your friends.  If you're new to this blog, please continue to read, and tell your friends.  In addition, in 2011 I hope that this blog becomes more interactive, with the readers sharing their trades and comments with the rest of us.  As I detailed in my goals for 2011, I also hope to increase the revenue from this blog.  While you're here, please click through some of the links and information which the advertisers have placed on these pages.  It helps to keep this blog free to everybody, and it helps the advertisers to get their name out and teach you about their products.

    Hopefully in 2011 I will learn from both my trading successes and failures in 2010.
    Tags: AAPL, SPY, TBT, WHR, DD, FXP, C
    Jan 02 11:48 PM | Link | Comment!
  • Today's Newest Trade
    This morning I purchased one June 2011 TBT $35/$47 CALL spread for $4.65 (x100 shares = $465) to supplement the (38) shares of TBT that I am currently holding in the portfolio. My cash position in the portfolio is now $781.42, down from $1,246.42 after the purchase.

    I have been saying for quite some time that I believe interest rates will continue to rise, especially with Mr. Bernanke's QE2 which is scheduled to purchase near-dated bonds through June of next year (notice the date I picked on the options).  While TBT has made an impressive move upward since the announcement of QE2, I believe it has a long way to go.  I purchased the (38) shares of TBT currently sitting in my portfolio on 1/3/2010, the date I started this blog.  Back then, the yield on the 10-year was 3.85%, and the TBT was trading at $43.66.  Today, the 10-year closed at 3.35%, down .132%, and the TBT closed at $37.81, down 3.30% today.  Obviously, I took a bit of a hit on the aforementioned trade today.

    To put this all into a bit of historical perspective, the average 10-year rate from 1962 to the present (a pretty big sample size) is 6.81%.  Furthermore, the average rate from 2000-2009 was 4.46%.  You can download and analyze all of this data for yourself here

    Just to tie a pretty little bow on this whole conversation, not only are the historical rates still low, but the U.S. Government itself has already told us it is going to prop up rates through QE2, and we there are also other forces at work which may drive rates up (see my post from yesterday here, more specifically, China and oil).  As inflation begins to creep into the economy, and I am not saying it will, so too will the interest rates increase.  Actually, just the fear of inflation is all that's needed.
    Dec 29 10:53 PM | Link | Comment!
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  • June $TBT $35/$48 call spreads. Feds are going to buy through June, and long rates will continue to rise.
    Dec 28, 2010
  • January 2011 SPY Put spreads. The market is overbought, and the sentiment data is heavily skewed to the Bulls.
    Dec 19, 2010
  • Deep in-in-the-money SPY December calls. Want to leverage the big market run through the end of the year.
    Aug 8, 2010
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