Sunday, January 21, 2007

Performance of the 2006 picks

In this game performance is everything, if you cannot beat the market then why bother? Invest in a index fund, go home and sleep peacefully! But stockpickers inherently believe that markets are inefficient and greater than market returns can be achieved by picking stock using any number of philosophies, that is the heart of any debate between active versus passive investing. So how did we do, on the stocks we picked last year. Without further ado

We did extremely well with Sherwin Williams (NYSE : SHW) and Bausch (NYSE : BOL) both classic short term distress situations up 58% and 17% respectively. Plum Creek Timber (NYSE : PCL) was a nice winner too up 18% with a juicy 4% dividend.

On a time weighted average , to account for the in and outs and well as timing issues we came out a 17.5% in returns assuming equal weights. Lets hope for a even better 2007.

Fedex and Caterpillar were the two laggards although CAT was recommended only in Nov 2006. Although I beleive longer term (5 years +) both are keepers. My usual term for stock holdings is forever.


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