Investor geeks, dig in. Anyone that wants an insight into how I think, join them. It’s the last day of the year and time for my semi-annual exercise. Don’t worry. This exercise isn’t very sweaty.
Twice a year I review all of my stocks to ask myself why I own them and what I should do with them. It’s an idea I got from Peter Lynch. An investor (as contrasted with a trader) should be able to concisely describe the companies behind their stocks. I consider myself an investor, though some call me a speculator. You can judge for yourself whether I am concise. I suspect I use more words than he suggests. I also don’t quite adhere to one of his other quotes,
“If you spend more than 14 minutes a year worrying about the market, you’ve wasted 12 minutes.”
I think the market is more entertaining than almost every sport and sitcom so why would I ignore it? Besides, even if I spend a few hours every six months compiling these synopses and casually watching my stocks during the day, I’m glad to say I spend even more time exercising other bits of my life like running, dancing, skiing, kayaking, and socializing.
These synopses are most valuable if they become part of a discussion. That’s why I post them on various discussion boards on The Motley Fool, Investor Village, and Silicon Investor. If you want to comment, great. Register for whichever site suits you. The best sites let you read for free. Every year I gain an insight because someone challenged an assertion, pointed out an omission, or revealed something I’d overlooked. One year someone pointed out a typo. I’d written that I won a stock. They wanted to know what lottery I was playing. (I owned it not won it.)
Most of these semi-annual exercises go back for years, so you and I can check my view of their progress.
One thing I learned in this year’s exercise is that my portfolio of speculative companies from a few years ago is maturing into a portfolio of profitable companies. All of them except Geron are generating product revenues. American Superconductor, Gaiam, and Real Good Solar are profitable. Dendreon, GigOptix, and Microvision have good chances of profitability by the end of 2012. When their stock prices reflect that it will be easier to buy a new muffler for my Jeep. Maybe within two years my portfolio will make it esay to replace the muffler, donate the Jeep, buy a new electric SUV, and set off on an extended hiking, kayaking, bicycling, dancing, skiing road trip vacation while the contractors renovate my house and someone manages everything I’ve temporarily left behind. It could happen. Hey, if Microvision becomes a success many things will change for the better.