Semi Annual Exercise EOY 2016

Why rewrite an intro that is as true now as it was six months ago, which implies a lack of progress. So it goes. So it went.

If it’s in italics, it’s a copy and paste from June 30th, and maybe prior to that. Stagnation on the surface while great actions take place in the chaos below.

Welcome to my semi-annual portfolio review, a bit of due diligence that is easier when the portfolio is growing, and an exercise in openly assessing the situation when the stocks are sinking. Personal finance is easy when everything works. The last few years have been the test of the personal side of personal finance; looking at an unpleasant situation, but looking at it objectively. Just like it is easy to ignore the fundamentals when stocks are rising, it’s important to pay attention to the fundamentals when stocks are sinking. Fundamentally, the majority of the companies I am invested in are improving. Quantitatively, their stocks aren’t. Trusting fundamentals isn’t easy when there’s a large gap between cause and effect; but, that’s why long term buy and hold emphasizes the holding for a long term.

AMSC

Superconductors are cool. Pun somewhat intended. Increasing the efficiency of our existing electrical power infrastructure would seem like an enormous market. The company might – might – be about to become profitable, but they have yet to breakthrough with a significant success. Too many remember the fiasco with the customer/competitor in China. So, the stock is down about 11%, there was no news except for one $5M order; but certainly profitability will make a difference. Right?

AST (Asterias)

They haven’t enabled a paralyzed person to walk again, but one patient did make the news by regaining upper body functionality. One good video clip can be more powerful than reams of data, which may be why the stock almost doubled in six months. The questions are, will it happen to more than one patient, and will the FDA make the approval process easier out of compassion or harder out of conservatism.

GERN (Geron)

By now Geron should have a success. They’ve been working on innovative biotech for years, but have had to sell off technologies because nothing has succeeded (until it departs the company, see AST). If they succeed at controlling cell death they can fight cancer and auto-immune diseases with the same technology. That’s powerful. But they haven’t. That’s why they’re down 20%.

GIG (GigPeak)

Imagine that, a tiny company that helps enable the high speed internet, video streaming, and cloud services is becoming profitable. They’re “only” up 28% in six months. Depending on the competition (as is true of every company), they could excel. Re-retirement would be nice.

MVIS (MicroVision)

Really, this time is different. Within the next 6 to 9 months, MicroVision will finally breakout and become a public success story. (Did your sarcasm monitor detect something there?) Really, this is different. Insiders are buying stock. Management has released (very loose but very positive) revenue guidance. Products are being sold. And yet, the lack of confidence and credibility means dilution and a stock price that’s down 29% in six months. Ah, but regular readers know, if MVIS succeeds, you’ll be able to read about it here (assuming I haven’t had to sell or something weird happens.)

RGSE (Real Goods Solar)

Proof that great ideas in great markets can manage to somehow crater. Real Goods Solar somehow has managed to go down 94% in 6 months. I’m sure my research will finally uncover why now that it is too late. I’d sell if the stock was outside my IRA because there would be benefits from the tax losses. Inside my IRA, they’re just losses.

TOTAL

All it all up and my decreasingly diverse portfolio is only down 10%, while the market hits records. Sigh, and yet, that’s why diversification is important. The ups can counter the downs; and while the downs are limited to only going down 100%, the ups can no such limit. The consequence of the last six months of investing are similar to the previous reports. I continue to work seven days a week and haven’t found a stable way to pay all of my bills. Ah, but 2017 will be different, so I’ve been led to understand.

 

Sadly, the following conclusion is a also copy and paste from the previous semi-annual exercise, and has echoes of the same from the last few years. Ah, but persistence pays. Right? Right?
The likelihood of my portfolio doing well has improved. My positions haven’t changed much, and my portfolio continues to hold enough potential to allow me to re-retire, or at least to begin transitioning to something less than a seven day a week work schedule. That’s been the case for years. Patience and a Long Term Buy and Hold strategy remain that classic conundrum of doing the same thing and expecting something different (a delusion) or proving the value of perseverance. Some time between now and the next semi-annual portfolio review, I should know better. In any case, stay tuned as the story continues.
And, the story continues, and continues, and – well – patience is inherent in long term investing, though patience can be quite inconvenient when paying bills is involved.

For the details of my investments, I post the semi-annual review of each of my stocks on various discussion boards. I could post the entire collection here, but 1) it would be very long, 2) the more public the conversation the more valuable it becomes, and 3) reading my posts on those boards introduces you to individuals who have different perspectives, strategies, and experiences. Collectively, those communities are more powerful than large financial institutions because the motivations and incentives are those of similar individual investors rather than that of profit-minded corporations.

Here are the links to the discussion boards I use. Feel free to comment here or there, and to pass along links to others. The bigger the discussion, the better the chance of valuable insights (as long as the trolls and flamers are moderated appropriately.)

Investor Village
AMSC
AST
GERN
GIG
MVIS
RGSE

The Motley Fool
AMSC
GERN
MVIS
RGSE
Economy and Markets

Silicon Investor
AMSC
GERN
GIG
MVIS

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About Tom Trimbath

consultant / entrepreneur / writer / photographer / speaker / aerospace engineer / semi-semi-retired More info at: https://trimbathcreative.wordpress.com/about/ and at my amazon author page: http://www.amazon.com/-/e/B0035XVXAA
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2 Responses to Semi Annual Exercise EOY 2016

  1. Pattie Beaven says:

    I am broadening my investment horizons and choosing to invest in companies that are A) environmentally friendly and B) aren’t associated with Big Oil or Big Banks.
    I’d love to schedule a chat with you to go over some of my options…

  2. Tom Trimbath says:

    Happy to help. Send me an email and we can get together for a talk.

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