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My Second Year's Performance Overview

After another year of writing for Seeking Alpha I have completed two premium articles and one instablog post. They cover four different companies and are all long positions. The purpose of this blog post is to, in detail, examine my performance from May 31 2015 to May 31 2016. In addition, to examine my overall performance spanning my two years of writing for Seeking Alpha.

Analysis From Year One
Last year I did a 12 Month Performance Overview which outlined my performance from my first article in May 2014 to my eighth in May 2015. My total return (realized and unrealized) was +32.5% and this beat the market's (S&P500) +11.2% by +21.3%. This return came from positions given in the articles at the time of writing, and were based on nine stocks with both long and short positions.
Five of these positions were left over: (NASDAQ:AMD), Sony (NYSE:SNE), Dollar General (NYSE:DG), Dollar Tree (NASDAQ:DLTR) and Manulife Financial (NYSE:MFC).

Stock Buy at Sell At Time to Reach Target Price May 2015 1yr Gain (2015)
AMD $4.00 $8.00 failed to reach $2.28 -43%
SNE $16.10 HOLD Hold until 2016 $31.24 94%
DG $61.48 HOLD Hold to reduce risk $72.92 18.6%
DLTR $53.92 HOLD Hold to reduce risk $76.33 41.6%
MFC $17.82 $21.58 Hold $18.35 3%

Analysis From Year Two
In my second year, several things happened. While still passionate about investment research, I had many more responsibilities throughout the year. I was in my final year of University, President of the Investment Club, looking for (and found) a great job for after grad, and I led a team in the TMX Options Trading Competition where we came 13th out of 1400 student teams across Canada. With all this I was unable to maintain the same level of production for Seeking Alpha. I published two premium articles and one blogpost detailing 4 companies. Outlined below including Dividends.

Stock Buy at Sell At Time to Reach Target Price May 2016 or SOLD at 1yr Gain (With Dividends)
RY $62.41 HOLD Hold for Value and Safe Dividends $60.21 0.4%
CM $75.73 HOLD Hold for Value and Safe Dividends $77.62 7.36%
TM $132.09 $167 Failed to Reach Target $103.41 -18.9%
SCHW $28.43 $34.14

Sept 25 - Dec 4 (2.5 months)

$34.51 21.6%

On the assumption that each stock is bought at the time of writing and sold at the price target or held as stated and that each company is equally represented in the portfolio the total earnings would have been +2.6%. The market returned +1.43% (including dividends) over the same period, my alpha was thus +1.17%.

The key factors that effected my returns were the collapse of oil prices which heavily hit Canadian banks. This has been overblown by the market, the Royal Bank of Canada (NYSE:RY) has been exceeding its net income expectations, growing overall and increasing its dividend thought the past year. RY is also the original home of the IEX exchange which allows its traders to get large blocks of shares at the same price (something even Goldman Sachs couldn't do). CIBC (NYSE:CM) has performed strongly and also increased its dividend. Despite the fantastic year they are at more or less the same PE, CIBC in fact got cheaper.
Toyota Motors (NYSE:TM) price collapsed over the year. Despite its overall strength and financial health it appears unable to trade above ten times earnings for an extended period of time. Concerns over sales growth and the cyclical nature of the auto industry.
Finally, Charles Schwab (NYSE:SCHW) reached its value and returned 21.6% over just two and a half months.

Total Return Over Two Years

The portfolio below consists of the stocks held on to from year one as well as those added in year two. The final return figures include dividends.

Stock

Purchase price or Price at Year Start

Sell At

Time Held

Price on May 31 2016 or Sold at

Gain in Year 2

AMD

2.28

8.00 Target not reached

4.57

100.4%

SNE

31.24

SELL Held since 2014 at 16.1

27.86

-10.2%

DG

72.92

SELL Sell at end of period

89.9

24.2%

DLTR

76.33

SELL Sell at end of period

90.54

18.6%

MFC

18.35

SELL Sell at end of Period

14.87

-14.5%

RY

62.41

HOLD Hold for Dividend

60.21

0.4%

CM

75.73

HOLD Hold for Dividend

77.62

7.4%

TM

132.09

167.00 Target not reached

103.41

-18.9%

SCHW

28.43

34.15

Sold after 2 months

34.51

21.6%


The total return of this portfolio during year two (May 2015-May 2016) is +14.3% or +12.9% above the market's return. Investing according to my articles over two years would have generated a Compounded Annual Growth Rate (OTCPK:CAGR) of +23.1%.

Conclusion

Over the past couple of years writing for Seeking Alpha I have gained a considerable amount of knowledge and a strong appreciation of the difficulty of investing. Though my performance has been far better than I expected, I know that anything can happen. An important take away for me is the importance of patience, the stocks that are held the longest have the chance to perform the best and even though there maybe temporary declines (as with AMD) if the business has been analyzed correctly the market will eventually come around. Its been an interesting few years.