SPY -Confession Time

December 30, 2017 for January 1, 2018

Did I outperform Spy for the year?   Yes,  because I earned 19.8% plus dividends 0n my portfolio which operates under the SPY model umbrella while SPY earned only 19.3% plus dividends.

That makes me a pretty good stock picker but, on honest reflection, I put in a far less than stellar performance as a  portfolio manager because I wasn’t fully invested…..expecting a correction that would allow me to reload by buying great stocks at great prices.

By making the assumption of a correction and being invested at only 30%, I cut my return on the total of funds at my disposal to 6.9%.  And, that is a lesson learned,  even though I can console myself by saying nobody ever went to the poor house making less profit and my return was better than any CD or Government Bond.

The learned lesson is that by not following the SPY model exactly, I didn’t follow the trend to the letter and cheated myself in terms of year end result.  My expectation for a correction may still bear fruit, but I did fail in terms of not following the advice I would have given you, if I were to give you advice.

That doesn’t mean I will quit picking stocks, it means 70% of my money will be in SPY, 15% will be in equities and ETFs under the SPY umbrella and 15% will be held out to buy on corrections.

SPY finished the year at $266.86 which on 4,905 shares =  $1, 308,948. versus a starting value of  $1,096,413.

Going forward a couple of facts give me the courage to invest more in SPY.  Interest rates are low, and there has been no expansion in PE multiple over the past year, so that SPY is not in a bubble.  As a trend follower, I am not supposed to even consider these facts as any such thoughts can lead to emotional decisions. And, during 2017 I simply out-thought myself instead of following the trend.

Mea Culpa…Richard

Richard Maurice Gore

 

 

 

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