January 2, 2014 General Post a Comment

2013 Year End Review

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The year 2013 is now complete, and the stock market overall had a very good year and so did my investments.  I wanted to write-up a few of the mistakes that I made throughout the year and include a top 5 post list.  I’ve come to appreciate the publicizing of my mistakes because it requires that I review my decisions and to have a public record of the mistakes so that I do  not make the same mistakes again.

Mistakes made during 2013

  • Do not attempt to invest in areas that are outside of your knowledge – I attempted to invest in a junior miner, but quickly realized that I wasn’t as comfortable with my analysis as I should have been.  I’m not sure if the investment was correct or not, but I do know that I wasn’t as comfortable holding the investment.  I sold out at a loss, but the lesson is that I shouldn’t have ventured into an industry that I didn’t have enough knowledge and conviction for investment purposes.
  • Dilution is a killer – When investing in small and micro cap companies, shareholder dilution can kill your returns.  It is important to study the capital structure of the business and decide if the company will not offer more common shares as a secondary offering to raise cash.  This process can drastically reduce your equity position and harm any type of positive return.
  • When it’s time to sell, sell the whole position – I knew better, but I still failed to apply this in practice.  It makes sense to buy shares in multiple chunks, but when a stock has reached a point to sell, it should be sold.  I kept some smaller positions after selling some investments and ended up losing gains because I didn’t sell my whole position.

Top 5 Blog Posts by Views

  • $INFU InfuSystem Holdings – Interesting Micro Cap Opportunity
    • This was my initial writeup on $INFU from the end of 2012.  It was a volatile year for $INFU’s stock, but the trend lately is very positive.  I still like and hold my position in $INFU.
  • Update on $INFU and Ryan Morris
    • The largest contributing factor to the volatility in $INFU’s stock was the attempted takeover of $INFU by Ryan Morris
  • $NROM – Noble Romans Pizza – Undervalued Growth?
    • I never pulled the trigger on this investment, and I had an opportunity to do so after writing this post.  The shares dipped back down to around $0.80 a share and I didn’t pull the trigger. With shares at $2.00 now, it was a lost opportunity.
  • Infusystems ($INFU) and the Round 1 Recompete Analysis
    • Analysis of the CMS Recompete Bid on $INFU.  With the Recompete finalized, a lot of uncertainty has been removed for the next couple of years for InfuSystem.
  • LeapFrog ($LF) Stock Analysis
    • A newer position of me, and the stock is being hurt due to  speculation of a poor Christmas season.  However, I believe the current price (especially under $8 now) offers a good opportunity for a long-term holding.  With no debt, a strong balance sheet, and a new management team that has reduced expenses, LeapFrog is sitting in a good position going forward.  $LF might be a nice takeover target.

 

Photo: Attribution Some rights reserved by Robert Hensley

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