Wednesday, January 2, 2013

My trade review from 2012

Another year has come and gone, that means it is time to look at the trade review from quite a busy 2012. Between classes and news filled market events, I gained more experience in trading, spotting patterns, where to enter and exit, while monitoring my long positions. From February, I knew it was going to be a long year, already in the hole selling losers from the previous year to not lose my entire position or more. Though it was another down year, I am more confident in my abilities to go forward and reflect on my mistakes, brush it off and push through the bad trades and prepare for a better 2013. Some of the trades I will highlight below were all out of being in the “moment” of making a few bucks, but went the wrong way.

All of this is real money, there are some Twitter “traders” out there who claim to make thousands a day but these are real profits/losses. Also, these are not recommendations for further trading ideas.

1st trade: Radioshak, after dropping nearly 30% on a bleak earnings report earlier last year, I decided to get in for a 5-8% pop in the stock that never happened. I ended up holding on to it for about a month with a stop at 7.00 (I saw further downside risk below there, looking at their report signaled under performance for the rest of the year.) The stock ended up closing out the year down some 70%+. I took a $26 dollar loss, and believe that this company could possibly file for bankruptcy in 2013.

2nd trade: Dynegy, which gave me the same mentality as Radioshak, being that the stock price was very inexpensive, I thought I could flip it if it moved a couple of cents and make a few bucks. Once again unfortunately it moved the wrong direction way too quickly on a bankruptcy filing report (unexpected, was thinking later on in yr it would happen) that made me nearly lose it all. I sold out before I lost my entire position, but still 1/3 of it was lost in the trade. I lost a total of $107.

3rd trade: THQ Interactive, this was going to be a long/short trade depending on how it moved. I had belief there would be a minimal turnaround in the video game market by 2012, but I was wrong. For most of the year, I was down 30 ish bucks, but took a big move down on a bankruptcy filing. This would end up being my biggest losing trade for the year, but glad I got out before where they are trading now at about 25 cents a share on the pink sheets. I ended up losing $111 on this trade.

12/08/2011 17:10:25
Bought 290 THQI @ 0.92
05/21/2012 10:07:36
Sold 290 THQI @ 0.6054

4th trade: Coldwater Creek, which was going to be another long/short trade, I was about half right on this, should have held on a little bit longer, but was hard to predict due to increased volatility in their earnings reports. I put a 50 dollar stop in and triggered it a few dollars before. I ended up losing $48 dollars.

5th trade:  This was my first go around with triple leveraged ETF’s. To catch a potential downdraft in the market, I bought some shares in the Direxion x3 inverse ETF (when the overall market goes down, this would go up). I was spotting a bullish turnaround in the market that day and got out before I lost more than I wanted. It ended up basically costing the commission I put on for the trade. In all, only $15 was lost.

6th  and 7th trades: These were both the same as above, but a bit more on the losses side from trading these. All three of these tool place within about a week, catching pullbacks of an eventual bull market from the middle of the summer. Again as beginner status, I was somewhat able to track the daily trend, but not long-term up pattern that was forming. Both combined, I ended up losing $54.

8th trade: Dryships which I bought in late 2011, I could have sold this and make a couple hundred dollard after it popped nearly 100% 4 weeks later, but pigs get slaughtered, and I took no profits when I had the opportunity. A majority of the year, it was holding nearly flat for me, but it sold off hard on its earnings report when I decided I could take no more and exited. As of the end of the year, it is more than 15% below where I sold it, and I see a bleak outlook on the entire global shipping sector due to oversupply. I ended up losing $54 dollars.
12/20/2011 14:58:19
Bought 120 DRYS @ 2.045
11/15/2012 10:12:07
Sold 120 DRYS @ 1.7601

9th trade: Petrobras, which I am still holding as of the close of 2012. This will be a long position for me going into 2013. I bought this based on fundamental analysis, revenues were up over 10% q/q from June to September of 2012. Operating cash flow was also up 2 quarters in a row, but still off highs from the beginning of 2012. Net Income is 20% of what it was from 2011, but this was due to sluggish oil demand in 2012. I am bullish energy and oil into 2013, there will be continued demand for oil, higher prices and new exploration will turn out to be profitable for big oil companies such as Petrobras. They also suspended their dividend due to almost half of their capital held by the government. The company is semi public I guess one would say, similar to PetroChina or CNOOC. Government ownership of the stock can influence decisions in order to pursue public interests, such as retail fuel prices. This is one of Petrobras main weak points, given that large state ownership means corporate objectives may not always align well with those of other shareholders. Though with it trading at a very low multiple relative to its peers, and a stock price near or below ’08 crisis level lows, I see opportunity for upside.

06/22/2012 14:05:01
Bought 12 PBR @ 19.63

I bought 12 shares in June for $255 ($10 commission included) which so far has not moved much for me. The highest the stock has gotten this year after I purchased the stock was in September when the closing high was at $24.18, 23% above where I purchased it. I could have taken a $40 gain, but decided to wait it out through next year, seeing big opportunities in oil. Closing out the year, the stock is down 21% and down 1% from where I bought it.

My other 2 long positions have seen a bit of day and night this year. Frontier, which I have now owned for over 3 years, brought me $125 worth of dividends the first 1.5 years, until I started dividend reinvestment in the summer of 2011. Since then, I have accrued an extra 22 shares (Initially I bought 100 shares @7.00) for a total of $700. With my initial dividend, I brought my cost basis down to $575 or $5.75 a share. With the dividend reinvestment, my final cost basis share price is $4.71, 10% above where it closed out the year. A simple discounted cash Flow analysis showed this stock valued at $4.21 so I will keep an eye on it through ’13, monitor the earnings reports and look for red flags.

Invesco Mortgage Retail has had a phenomenal year, the shares were up 40% this year and flat from where I bought them in August of 2011. I made +$110 dollars in dividend payments.
08/04/2011 09:31:22
Bought 40 IVR @ 19.66

I plan on holding this long-term through 2013. I see big upside potential in the housing sector as we began to see a slight turnaround toward the end of last year.

In total for the year, I ended up losing ($415) though with addition of Invesco dividends +$110 my loss was ($305). 

Follow on twitter @Peter_Eller10 for updates throughout the year. 

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