Year end investments summary

My performance
The Scottrade account did beat the S&P 500 and Nasdaq (detail to be calculated…). This is pretty easy because the market did not go up much in the past year (3.5% for S&P and 9.8% for Nasdaq).

More importantly, learned the risk, portfolio management (weighting), IRA/401K/mutual funds, all from hands on experience and can not be measured by the numbers.

What went right
1) Sell the losers: XFML, SBUX
2) Ring the register on winners: HMIN
3) More focus, 3 or 4 stocks maximum in the portfolio; work on same stocks (MR) if it’s working
4) Basic research: reading F1/S1 prospectus, 10K, 10Q; using google spread sheet
5) Read the five stocks/investing books (listed in my aStore), learned a lot from the masters. I still need to complete Buffett’s book (a little harder) and Ken Fisher’s book (a little long).

What went wrong/lesson learned
1) Did not sell CROX before Oct 31 ER: if a stock went up a lot and its weight on overall portfolio increased dramatically, make sure ka ching some…
2) Speculate on small companies (GSIT) without much research

Action plan for the year 2008
1) CFA level I; better fundamental research
2) Better performance, less volalility (a more smooth ride), limit the downside during events like Feb 27 crash, etc.

WSJ year end stock market summary
I am always interested in the Wall Street Journal Jan 2 version paper because it has the summary of past year’s global stock market, partilularly the leaders and laggards each category. Here are leaders in year 2006 and how they did in year 2007:

Large cap
China Life: 282% (2006, source WSJ) vs. 51% (2007, from $50.51 to $76.50)

Biggest movers (market cap increase)
PetroChina: $253.60 b (up $107.01 b in 2006) vs. $724.60 b (up $470.95 b)

IPO:
Riverbed Technology: 221.9% (2006) vs. -13.9% (from $30.70 to $26.74)

I would be very interested to see how VM Ware (VMW, up 193.1% in 2007) does in year 2008. VMW is one of the hottest IPO in the last year. Currently it has a market cap of $32.5 b, which puts it as the No. 4 software company in the world by market cap (behind Microsoft, SAP and Oracle; surpassing Adobe).

For the record, I bought two of the top 10 IPOs in 2007 and two of the worst 10. They are MSCI (+113.3% from offering price), WuXi Pharma (+108.9%); Xinhua Finance (-53.8%) and GSIT (-53.6%). The bad thing for me, is I did not get much the gains from winners, while I still hold one of the losers (GSIT). In other words, I am still losing money on those IPOs 🙁

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