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2009 Results

Having done this business of investing for a respectable period of time, and now with a sizable portfolio, I decided to begin calculating annual returns and comparing them to benchmark matrices.  That, and of course, I like to brag.  Finally, my most important reason for doing so is for posterity's sake, with the hope of comparing future returns to this banner year:

Total Returns:

46.3%


(this includes recently managed funds.  Otherwise, total % returns would have been 59.4%)
 
  A/(B+C)

A = annual gains (end of year balance, subtracted by (B + C))
B = beginning of year balance
C = total contributions for the year

My losses were sizable in 2008, but I ended up more than tripling the gains for this year, mainly due to my recent management of family funds.


Biggest Winner:

Over half of my returns from last year came from one stock: Chalco, or Aluminum Corporation of China (NYSE:ACH).  Having spotted a 70% drop from 90 to 20, I decided to begin purchasing, and ended up 'dollar cost averaging' down to a price just shy of $11.  I also wrote cash-secured puts strike 10 exp Jan 2011 for a 40% premium over the life of the puts when the stock was around 8, which ended up netting a 20% return over the course of 4 months.  Not bad for cash.

Other holdings (in no particular order):

INTC
CSCO
YGE
BHI
BRKB
COLM
CMG
YZC
ECA (and now also CVE)

Speculative bets (mainly short term options trading using LEAPs):
C
LVS
ETFC (unresolved)
AAPL (short, loss)
PALM (short, loss)

Exited Positions:
CIEN
JDSU (loss)
EXM (loss)
SKX
SOHU
DOW (loss)

Top 5 holdings going into 2010 (in order of market value - these can change at any time):

ACH
YZC
INTC
ETFC
ECA

Biggest Loser:

Dow Chemical.  Oh, what an opportunity.  I got caught up in the whole Rohm and Haas merger debacle, and originally bought calls @ 17.5 exp Jan 2011 when the stock was trading under 6.  Had I held onto them, I would have nearly doubled my returns for the year.  Instead, I got cold feet and took a small loss (less than 2% of portfolio).

Best Strategy:

Simply buying stocks.  Nothing fancy, no straddles, covered calls, or insurance puts.  

Worst Strategy:

Consistently buying SPY insurance puts expecting a bad winter


As you can see, it was hard to lose last year.  You could have used a dartboard, and as long as you took benchmark stocks like MCD, WMT, and PG off the board, you could have struck gold on just about anything else.  God help those that net shorted the market.

Going forward, I am heavy on commodities, with ACH, YGE, ECA, and YZC comprising over 50% of my portfolio.  I am working on putting down my ideas on paper of a 'commodities mega-trend', a somewhat similar but darker version of what we experienced with the computer over the past 40-50 years.

Anyone thinking that I am suffering from hubris, don't worry.  My next post regarding my 10-year performance will put it into perspective.