Post-mortem of my 2012 picks

Over on John Kingham’s site, I made a selection of shares for 2012. Let’s see what happened:

ASX – All-Share Index: +12.5%
MCX – FTSE 250: +26.1%
UKX – Footsie: +10.3%

Making comparisons is going to be awkward, because what there was a very big divergence between the indices. The MCX flew away, but the ASX lagged, weighed down by the relative sluggishness of the Footsie. So, should my base comparison be the ASX – because after all I’m trying to beat the “universe” of stocks – or do I bewail my performance for lagging the MCX, from which many of my ideas were drawn?

AFF – Afferro Mining: +23.1% I said that there was huge upside on this one, as you received the market cap in cash, and got the resources for free. Good call on my part, although it was far from a smooth ride for investors.

BLSA – Blacks Leisure (short position): -100.0% I said there was a high probability of going bankrupt, and this was indeed the case. It went bankrupt in mid-January, so you wouldn’t have had long to wait. To be honest, this one was like shooting fish in a barrel, because the directors had already warned that there’d be trouble. Some BLSA stores was taken over by JD Sports for peanuts. JD. reports that the stores are performing well, so it looks like the management have, once again, repeated their basic template of buying out inefficient bankrupt niche retailers and breathing new life into them. JD shareholders (which includes me) are going to be happy with this purchase. If you’re looking for a similar short for 2013: HIBU. HMV looks pretty bad, too, but not quite the “sure thing” of HIBU.

DNO – Domino Printing Sciences: +18.2%. I reckoned it was a good quality company at a reasonable price, but for which I wasn’t expecting

DPH – Dechra Pharma: +23.1% A nice little GARP stock that pretty much did exactly what I expected it to. Would make a decent selection for this year.

MRW – Morrisons: -16.5% Well, go figure. It was reasonably priced at the beginning of the year, and became cheaper. The fall of the supermarkets was something I think that very very few people would have predicted at the beginning of 2012. It’s amazing that my safest investment also turned out to be amongst the worst.

OPTS – Optos: -17.1% A GARP stock that just didn’t fire up. Revenues were up, but EPS was down. That position will swap around next year. The growth story seems unbroken, and it now trades on a forward PE of 8.7, which is undemanding.

Here are some means:
Cum-short: +21.8% (i.e. takes the BLSA short as +100%)
Ex-short: +6.2% (i.e. excluding BLSA)

Seeings as people don’t usually take short positions (I know I don’t), the best indicator of my performance is +6.2%. This has lagged the ASX by about 6%, so I am disappointed by my selections. One of the ironies is that AFF, which I thought of as my riskiest punt, turned out to be the best performer, whilst the least risky punt, MRW, turned out to have one of the worst. It even managed to underperform Tesco, where al the fuss and fury over supermarkets was concentrated.

Distinct lack of genius shown by me this year. Let’s hope my picks for 2013 turn out better.

About mcturra2000

Computer programmer living in Scotland.
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1 Response to Post-mortem of my 2012 picks

  1. To my way of thinking, MRW was your riskiest pick since it’s unlikely that you knew something about this company that bigger players on the buy side didn’t know.

    So, another way to look at it: if you exclude MRW, include BSLA and count dividends earned, you are up 31% for the year.

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