Time to Reflect

When I started the T20YM venture, I had a clear and concise goal; to make money using a disciplined investing strategy centered on Dividend Growth Investing coupled with option trading on momentum stocks.  For the past year, this strategy has been inconsistent. There were months where I would be up 30-40%, and months where I was down 30-40%. As it stands today, I have zero dollars left in my equity account.  I liquidated my positions and all that remains are my family’s long-term investments.

I have decided I am a skilled fundamental stock picker and investor, but a terrible ‘trader’. My long-term holdings were all sold for a profit. However, as a former semi-pro poker player, I have that no limit mentality. When I saw odds in my favor, I placed large bets- sometimes on margins- and when these trades went bad, things got ugly. Well, over the last few months things went really ugly. There’s and old adage ‘the market can remain irrational longer than you can stay solvent’.  Well Mr. Market, you’ve won this battle but not the war.

Moving forward:

I will rebuild my Dividend Growth Portfolio using the ‘Best in Breed’ articles located in the links section. I will start by accumulating small, 50 share positions at a time. I will wait for pull backs in these names as I am in no rush to jump in at the markets current levels.  

My option ‘trading’ will be severely minimized. I will not buy front month options. I will not buy large lots of options that grossly distort my weighting in certain sectors. I will use options to invest in companies that do not pass my dividend screening model. There is no need to hold common shares if you are not being paid to hold them.

So what went wrong? The past few months the market has gone up, but I got hammered. I rode AAPL shares from 362 down to 339. I was heavily leveraged with ‘deep in the money’ April calls looking to play the pre-earnings run up. Obviously, the market has not been kind to AAPL.

            I-Pad 2 delays: False

Steve Jobs to Die in Six Weeks: False

I-Phone 5 Delay: False

Bomb scare called into packaging facility

Steve Jobs to permanently resign as CEO of AAPL: So far, False

Supply Chain constraints due to Japan disaster: no evidence

Thunderbolt outselling I-Phone: False

Middle East Turmoil, Higher Oil Prices: Affected the market over all.

Then the NASDAQ re-balances

Plus many, many, MANY more rumors….

The stock was tanking, even with a HUGE IPad2 and Verizon launch. I stuck with my investment thesis and kept riding the stock down. No matter the fundamentals, you can’t fight the market. I still think AAPL is a fantastic investment, check out this article I wrote for the fundamentals

So that’s it for now, back to basics. I will keep you updated as I add back to my Dividend Growth Portfolio. My holdings in my family portfolio as of right now are as follows:

FYI, my 401K remains unchanged… at least I got that going for me!

All the best,

C