The 2CentView portfolio was up 12% fo the year, which matched the S&P500 but well above the FTSE100 (flat).
The portfolio ended the year 75% US and 25% UK 0% Europe – mainly because the US was the only market showing real jobs growth and a rising stock market – the model also showed many more opportunities in the US than outside the US. The exposure to USD/GBP exchange rate is also something to keep an eye on – sterling strength representing a buying opportunity for US Stocks – but can go the other way!
Where it did badly:
2 Core positions were savaged – Blinkx (down 90%) and $TCG (thomas cook) which cost the portfolio nearly 6% – need to do a better job managing zero cost core positions – where you can take your eye of the ball.
Europe and US House & Autos continued to underperfrom and took losses in Deutsche Bank, HSBC and $USG and $GM – all go cut on the 25% Stops (they continued to go lower – except $GM which has come back – thanks EBOLA!)
Also took some losses in $FUEL, $GIMO, $ICPT on the rotation out of expensive growth stocks into more low growth stocks – growth positions are the riskiest and hardest to manage as moves can be savage.
Where it did well:
$AAL- American Airlines, $SAVE did very well up nearly 100%
$FB up 37%
$CELG and $ISIS – up nearly 80%
$YHOO – up 40% – easiest trade of the year!
$AAPL – up 50%
$MS – Morgan Stanley up 30%
Rite Aid and Radian also performed well (core positions from 2013)
2014 was in general lot tougher than 2013 as the market experienced volatility throughout the year – Russia/Ukraine, EBOLA, Oil price collapse – all tested the nerves – but also represented buying opportunities.
The 2CentView strategy of taking some profits, setting stops helps build low cost positions and mitigates losses from positions not working – this really helps in managing volatile markets – and helps you sleep at night – we all have day jobs!
Overall the portfolio is up 73% since beginning of 2013 when the model and strategy was first built.
Main lesson learnt from 2014 – be more selective and if a core position drops more than 30% – start to exit – even if it is because of a malicous blog!
So 50% of the portfolio was up average of 51% =25.5% on the winners
30% portfolio down 25% = -7.5% on the losers
6% loss on core positions in $BLNX and $TCG