It has been a moderately successful year for “The Fly.”
During the early going of 2007, I was as hot as a pistol, with smoking gains in [[MVIS]], [[BWLD]], [[CENX]], [[NTRI]], [[LNN]], [[IVAC]] and [[HANS]].
Then, all of a sudden, things stopped working.
First, I got knee capped by a variety of bullshit stocks, like [[ARWR]] and [[MCHX]].
Then, the [[MVIS]] bandwagon got “dewheeled,” sending “The Fly” scrambling for safety. For most of the summer, I was forced to endure painful declines in a variety of key holdings, like [[NTRI]] and [[BWLD]].
I missed out on a lot of big winners, particularly in the solar sector. But that’s ok.
I find it easier to buy and sell what I understand. Most of my big mistakes come from speculative dice rolls, which end up being long term capital losses.
I must say, during 2007, the market was very difficult to game. The retailers, ethanol, homies, trannies, banks, semi’s and networkers all blew the fuck up. And still, the major indices are up, year to date.
Amazing.
To put things in perspective: I went from being up 47% in June, to up 20% now. A staggering decline, yet still up nicely.
Because of this, I forced myself to divorce from key holdings and put protective hedges on accounts, via inverse ETF’s.
Furthermore, I made sure not to take unneeded risk in momentum sectors, like solar or emerging markets.
To sum things up:
The only reason why I’m still up 20% is due to my long term strategy to hold quality stocks. Within my top 10 holdings, three of them (RIMM, AAPL and GME) enjoyed triple digit returns in 2007.
However, going into 2008, I seriously doubt they can repeat. The law of large numbers will eventually kick in and those stocks will become legacy.
So, like every new year, I will be hard at work, trying to identify the next RIMM or GME. Additionally, I need to stick with my short sales longer. Looking back, I nailed short calls on [[CWTR]], [[HLYS]], [[RACK]] and [[LAZ]]. However, due to my bullish disposition, I covered them too quickly.
In 2008, I believe China will drop significantly, enriching those who hold [[FXP]]. Also, on the long side, I sense agriculture and filtration companies will do well. Stocks like [[MON]], [[MOS]], [[VMI]] and [[DCI]] should be bought on dips. Also, considering we are entering an election year, many sectors will be jolted by poll stats.
In other words, investors will have to be nimble in 2008, in order to adjust to the political headwinds and economic instability.
My goal for 2008 is to double my 2007 return of 20%. If I cannot accomplish this task, without doubt, I will be moving to the cold mountains of Romania, where I will milk goats for the duration of my life.
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