Update 03/14

I'm quite disappointed with my performance. I mean, I've done pretty well, but I don't think I'm a stock-picking guru. I'll have to look for proof of my genius elsewhere.

I've been invested for a year and a half now, and my geometric return is 20%. 6 months ago, however, I was up more than 40%. So, I think my market timing was good, not my ability to pick stocks. For comparison, the DJIA is flat since October 1, 2008. If I hadn't sold anything after my initial purchases in 2008, I'd be up 178%. I was holding a stellar portfolio of Ford Motor Company (up 662% since mid-Nov 2008), Tata Motors (up 444%), and US Steel (up 84%). I also had three duds: MGM Mirage (down 22%), Bank of America (down 29%) and Freddie Mac (down 31%). I also would have avoided paying short-term capital gains in 2009 if I had sat tight. Not my best ideas.

For the year-to-date, I'm not doing so badly. I just checked Morningstar and the best performing funds of 2010 are two Fidelity Select funds, with returns of around 18.70%. The average YTD return for the 16,384 funds that Morningstar tracks is 3.27%. I'm up 13.17%. So, I'm killing it. But, my 1 year return is 129%, and that doesn't look so impressive when compared to the top ranked fund on Morningstar.com, which has a 1 year return of 241%. Again, had I kept my original portfolio, I would have outperformed every single professionally managed mutual fund tracked by Morningstar. That would have been pretty spectacular.

Here's my assessment of my risk: MGM Mirage might go bankrupt. The company has $13 billion in debt, and while its management has reached an agreement to extend bond repayments by 2 years, Las Vegas is still down and out. Convention bookings are up, but room rates are very low. VMWare is profitable and growing, but Microsoft is going after its virtualization business. I don't understand the technology well enough to say whether Microsoft will be able to grab market share or not. I can't even read Bank of America's balance sheet. I'm just praying that it'll be able to turn its business around. Investors hate China. AgFeed just had a great year, but you wouldn't know it by looking at its stock price. It bounced 20% on Tuesday and steadily lost value over the rest of the week. I've very positive on the company, but there's going to be prolonged weakness in Chinese pork prices. Especially now that China is opening up its market to North American exports again. Profitability will be low. Verizon is my rock. I've got my 6.5% dividend, and Verizon has the cash flow to sustain it.