Day 71: 1st Buffett Year Achieved
Today is the 71st day since I bought the first stock and started this blog. The total yield, after a huge gain from Aluminum Corporation of China Limited (ACH) was taken today, was pushed decidedly past the first benchmark of 27.52%—the average yearly yield of Warren Buffett. It’s now 33.24%.
Theoretically, were I more conservative than I am, I could stop, put everything into Prospect Street High Income Portfolio Inc. (PHY), add to my gains another 7.74% (assuming I could reinvest the dividends, but not assuming any appreciation on the share price—which is dubious because it more frequently trades at a 10% higher price), and still come out at the end of the year much better off than our benchmark.
Doing this in 71 days without a doubt exceeded my expectations. The benefit of meeting the benchmark so early is that it will forever expedite all future yields. A year from now I hope to be making gains from these initial gains, meaning those gains could be more, and so on.
Hi DC,
Nice call on ACH. I was looking at a chart of that, and it really went crazy over the last couple of weeks.
What were you looking at when you bought that stock, and what made you decide to sell it when you did?
Hi Danny,
I was looking at a variety of things. I had been watching it for a few weeks when it started slipping in early August. Then it slipped some more. At that point I couldn’t get my hands on it soon enough. I really would have bought it at $52ish, the 52-week high, but $41?
Why did I sell it? Because the odds of any stock moving 70% without a hell of a lot of people wanting to take that 70%, seem rather slim to me.
I might play it again, if you’re wondering, but I want to be certain its all shaken out first.
I wouldn’t be surprised if it keeps its momentum (but of course, that’s not necessarily a recommendation).
A few questions and points to note.
1. Are the results you display audited independently by a financial firm?
2. Could you post buy and sell recommendations on your blog before executing the trades? Vision is a perfect 20/20 in hindsight!
3. According to your results in the last 87 days of trading you have not made a single loss making trade - correct?
4. Have you considered calculating trader returns after deducting transaction costs and taxes?
Thanks,
khali_pili_lafda,
Thanks for posting.
1. No they are not. I have not as of yet been able to find an easy way to do this. If you feel that having this would boost my credibility, then I will try to figure out a convenient way to do it.
2. Probably not. I never intended this sight, nor do expect to in the future, to be a stock picking service.
3. Correct.
4. I have no transaction costs, so taxes (considering all trades have been short-term) could be calculated at year end using an appropriate tax bracket.
khali_pili_lafda: Also, just added open positions, soon will be adding trade confirmations.