Friday, January 17, 2014

Investing Performance for 2013

2013 can be described as the year of the comeback after two very lean and very poor years, it is mostly due to the high concentration of almost 30% of my holdings in one specific company. It is also a year when I decided to get back to the basics, finding undervalued companies that have attractive growth characteristics.

As I look back at the year, the broad rally experienced by stocks in 2013 is fundamentally attributable to the quantitative easing measures by the Federal Reserve in the US and a slight improvement of the global economic environment.

My biggest position was certainly Skystar Bio-Pharmaceutical Company. At the end of 2010, an accounting scandal of incredible proportions was affecting the sphere of chinese reverse merger companies. Investors were relentlessly dumping their share holdings on the market and all companies related to china saw their share prices prices fall over 70%. I was lucky enough to have found this falling knife right before it hit the ground. Nothing much happened until the end of August when the stock started posting incredible gains. I decided that taking some profits off the able was warranted and sold 75% of my position on October 10th 2013 after the stock had gained over 200% for the year. This proved to be a wise decision because prices came back down to more reasonable levels.

There are also a few blunders to mention. As the price of gold was rising and mounting fears of inflation, I decided to take a long position in shares of Osisko Mining Corp, this proved to be a poor decision because gold prices have only kept coming down since then. Even the recent opportunistic bid by Goldcorp does nothing to get the price back up to my original entry price.

Here are my positions for the year:


Taking those positions into account, my performance in 2013 was an incredible 114.4%, and the S&P/TSX did 9.6%, so it makes it that I over-performed it by 104.8%. This is very encouraging but I remain cautious, this performance might be due a great deal to chance and it is very improbable that I will be able to replicate it in the future. The downside is that even if I showcased a better performance than this index, it will get harder in the coming year to find such attractive opportunities and repeat a relative performance of this magnitude.