CORRECTION: I corrected this post below to say I sold half of my Geeknet holding after it had doubled in price. Not the entire position.
For the year 2010, the portfolio gained 19.97% including dividends. The S&P 500 total return for the year was 15.06%.
So it was a good year for two reasons.
First, any year is a good year when the portfolio gains 15% or more. That’s because averaging 15% a year doubles a portfolio’s value every five years.
And second, beating the S&P 500 is the standard which measures money managers in the US.
Here's how the portfolio positions looked at the end of December:
Gold Mining Holdings 20.6%
SPDR Gold ETF 11.0%
King Pharmaceutical 6.7%
Unifi Inc. 6.7%
Fairfax Financial 6.5%
Superior Industries 5.3%
EGI Financial 4.9%
Capital Southwest 4.6%
NKSJ Holdings 4.2%
XETA Technologies 3.3%
3i Group Less than 1%
Media General Less than 1%
Some notes. These figures are not audited, just my calculator and me. So if I'm off a bit, sorry.
The portfolio stretches over three accounts: my regular brokerage account and two retirement accounts. The VAST majority of my liquid net worth is in the positions above. The "Controlled Greed portfolio" isn't some little portfolio on the side. It is real money. I’m working like the dickens not to lose it all and live out my life in soup kitchens.
The gold mining holdings listed above (and grouped as a single position) include Newmont Mining (NEM), Goldcorp (GG), Agnico-Eagle Mines (AEM) and the Market Vectors Gold Miners ETF (GDX).
I’m holding my SPDR Gold ETF, the double-sized position established in the summer of 2009. This means that my gold ETF and gold mining stocks together account for 31.6% of my portfolio.
My gold-related holdings have done well, yet the rest of the portfolio has done well also. This is reflected by gold and gold mining stocks accounting for a bit less than one-third of the total portfolio, as they did previously.
Also, let’s be frank. The Fed’s QE nonsense is designed to keep asset prices up, and that certainly means the stock market. So owning stocks means having the wind at our backs. The wind won’t blow forever, but it sure did this past year for the most part.
Lastly on the subject, I probably made a mistake by keeping my gold mining positions in major gold producers. Junior gold mining stocks have taken off, and I would have done well to invest some money in the Market Vectors Junior Gold Miners ETF. I didn’t and should keep an eye out for any opportunity to get in there.
Fairfax Financial is a nice-sized holding. Remember that I've sold enough of this stock a while back to get my original capital out of it. The holding is a free ride. Geeknet also became a free ride when I sold half my stake after it doubled in price.
Pfizer is buying King Pharmaceuticals. I tendered my shares and the sale should go through sometime in the first quarter of 2011.
I'm mostly content with all these stocks, except for Media General and 3i Group. MEG has been a disastrous investment and represents money lost.
Let’s see how 2011 plays out. I’ve got a list of potential buys, but think I’ll hold off for a bit. The market is either fairly valued, or (more likely) overvalued.