Thursday, December 31, 2009

Portfolio Report for 2009

The numbers are in, and for a change my strategy of doing a lot of research on the future value of technologies paid off. Many investors had a great year in 2009, whatever strategy they used, but I was smart or lucky enough to beat the market averages.

I added only three new stocks in 2009: Cantel Medical, CMN (on December 9), Hansen Medical, HNSN (on July 8), and Petsmart, PETM on (October 8); they did not affect the outcome much. I sold out of only one, Red Hat, RHT (on September 8), which was up significantly. Here is how the stocks I held for the entire year did (links are too my Analyst Conference Summaries for the stocks):

December 31, 2008 priceDecember 31, 2009 price
AMATApplied Materials10.1313.94
HILLDot Hill0.801.90
MRVLMarvell Technologies6.6720.75
ONXXOnyx Pharmaceuticals 34.1629.34
SGISilicon Graphics International (was RACK) 3.947.01
TTMITTM Technologies5.2111.53

Keep in mind that the calendar year is artificial. Some of the 2009 losers have gained since I bought them, and some winners are down overall.

My big loser in 2009 was Anesiva, which has a promising therapy but ran out of money to develop it. Gilead was a loser, too, despite steadily increasing profits and ending with a very low P/E ratio. Onyx was the only other loser, and I accumulated more in 2009.

Biggest winners included Dendreon, which reported data for Provenge that should mean FDA approval of the prostate cancer therapy in 2010; it was up 473%. AMD rose 348% as renewed global computer sales combined with a settlement with Intel to give it a boost. Marvell was up 211% as it cut costs while demand ramped for its new generations of semiconductor chips for storage and communications. Dot Hill was up 137% as its storage device technology revenues ramped up during tough times.

Given my mix, my portfolio gained 107% for the year.

Some people do very well as momentum investors, but I think in the long run the market is about profits, not investor psychology. There have been years when my investment ideas seemed foolish, but 2009 was not one of them. Also note that my main use of cash for investment in 2008 and 2009 was paying down the mortgage on my home.

Happy New Year! (And Keep Diversified!)

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