2011 Report and 2012 Plans

2011 was the inaugural year for CCI. I want to thank all of you have taken the time to read the blog this year. I hope it has provided some insight for you, and look forward to your continued support in 2012. This post provides an overview of 2011 results and insight into plans for 2012.

2011 Review

CCI had two initial goals in 2011.

• CCI's first goal was to see if I had the time and energy to keep this active/current for the full year, and if anyone would read it. I feel I was able to accomplish this objective.
• The second objective was the basic goal of any trading log, to clearly document why an investment is  made, track performance, and become a better investor. Making the effort to documenting trade rationale seems helpful. Frankly, I really did not entire the year with any infrastructure in place to track performance. However, based on my cobbled together, unaudited, approximate review of 2011 posts the performance has been good. Specifically:
  
  
  • All domestic stock and options activities had just over a 5% gain. The S&P500 had a 2% gain (all from dividends). Hence, it seems CCI performed 2.5 times better than the market.!!! Of course, past performance is no indication of future results. However, this type of performance is consistent with the objective of the type of investing discussed in the blog. My expectations would be to under perform in big up markets, lose less in down markets, and out perform in sideways markets. Over the long-term, I think that will provide a better, more stable return.
  • The two international portfolio's both lost about 11.5%. It is a little more challenging to determine the right benchmark for these portfolios. My understanding is emerging market were down about 16% and developed markets down about 11% in 2012. Blending those two numbers based on the asset allocation that was used in these portfolios results in benchmark down 12.5%. I guess 11.5% is over-performance, but I would have hoped to lose less than that amount in a down market. CCI will be re-examining the approach in this area in 2012.

What's new for 2012

In the inaugural year, CC posted about a variety of stocks and options that I found of interest. The big change planned for CCI in 2012 is more focus. Specifically, in 2012 CCI plans to focus on six specific groups of stocks or portfolios. The stocks in each portfolio will be in a similar industry and/or share a similar set of characteristics. Within each portfolio CCI intends to use a wide variety of techniques beyond just being long equities. This includes the heavy use of options, some shorting, and a minor amount of leverage. Yes, these can be considered hedge fund type tactics. To many that may seem aggressive. However, it can also be viewed as the common sense way to invest in markets today.

This increased focus is intended to

• Make it easier for readers to understand how specific post “fit together”
• Differentiate CCI from many other “stock pick of the day” internet sites
• Make it easier to track and understand performance

The six stock groupings are

• Global Country Basket (GCB) - An alternate blend of non US ETFs
• Options for Income (O4I) - Generating income via selling options 
• Behind the Clouds (BTC) - Technology Sector, hedge fund
• Utility Dividend Capture (UDC) - Utility Sector, Income oriented
• The Short Game (TSG) - Shorting market indexes
• Sweet Swing Trades (SST) - Traditional opportunistic swing trades

To support this focused effort, there will be some technology changes.

First, the groupings on the left side of the blog will be migrating to these six topic areas. It may take some time to evolve to this architecture, so the community's patience during the process is appreciated.

Second, CCI is also announcing the pilot release of a web site! It can be found at

https://sites.google.com/site/commoncentsinvesting/home

This web site is intended to provide a platform to better contain common sense thoughts and theories about investing, better keep track of trades over a long period of time, and allow for future expansion of the concept of self directed investors managing and sharing portfolios in their areas of expertise.

Please note: this web site is a work in progress and will probably remain that way for much of 2012

For starters, CCI's IT staff (i.e. me) is still learning how to produce a web site and CCI is too cheap to outsource web-site development (for now). In 2012, the focus will be on adding content, and in future years potentially accessing better web development skills to improve the form of the site.

Secondly the web site is intended to grow over time, so for now several initial pages are listed as “under construction”. Throughout the year, CCI will be considering if/how this web site may need to grow, with the intent of formalizing it better in 2013.

Thanks again for your support in 2011 and best wishes for a happy, healthy and prosperous 2012.

CCI