DGI Adventure – 02-13-2016 Market Musings – Am I Really That Bad at This?

I fancy myself as a patient, well reasoned investor. I’m not
too shaken by short-term gyrations in the market. I like to think that I “get
it”. But right now there’s a lot of red…in all of my accounts. I’m not feeling particularly
confident at the moment. I’m pretty depressed actually about the whole
investing thing. Here are a couple of the primary reasons why:

Measuring Up

I don’t put a lot of emphasis on comparing stock picks to “the
market”, because “performance” is meaningless unless you actually sell the
stock and recognize the gain or loss. That said, I was feeling particularly
masochistic, so I thought I’d run the numbers and compare myself to “the market”
anyway.

I funded my ROTH IRA with 2014’s contribution of
$3,850 on 2/28/15. The 2015 contribution of $5,500 went into the account on
8/17/15. So last year I put $9,350 into it and after the close on Friday, the
account has a value of $8,277.49. What if I’d just bought SPY the day the funds
hit the account and forgotten about it? 

image

I have definitely not outperformed the S&P500. Hopefully
the disclaimer is unnecessary,
but to paraphrase once more: nothing on this website should ever be construed
as investment advice. Just documenting what I do, not suggesting in any way
that you should do the same…you might actually do pretty well by doing the opposite…

I’m not going to take the time to measure other accounts in the portfolio because
they have a much more complicated contribution history. Although it is fair to
say my wife is
still kicking my ass
in the ROTH department.

All That Glitters

A
little over a month ago
, I sold covered calls on the gold mining stocks
that have been languishing in my portfolio for a long time now. I sold calls on
both ABX and AUY. To quote myself regarding the ABX shares:

In
round numbers the investment has lost about $1,300 in imaginary cost basis
bucks. Until today it had paid a
measly total of $26.59 in actual cash income. But no more! I’m going to start
getting some freaking money back from this lemon.

Yes,
the strike price is way below my cost basis, but I’ve come to grips with the
fact that this is a loser investment.  I may like Barrick Gold as a client
of the company I work for, but it doesn’t mean it was a good stock to buy at
$18.00/share.
 

ABX
closed at $7.94/share that day. You know what happened next… 

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ABX Daily Chart 01-13-16 to present from Yahoo Finance

ABX is up 54% percent in six weeks. 54 freaking percent.

I don’t know what to say. I’m positive I caused this. The minute I
decided to sell those calls, it pretty much guaranteed that gold would go on a
crazy run. You’re welcome gold bugs. The AUY calls with a $2.50 strike are also
in the money, although not as drastically.

And then a little later in the post I said this:

I will sell the
shares for $9.00/share if they get assigned by whoever bought this option
contract. They probably won’t unless the price is well over $9.23 (strike price
+ premium paid), which represents a 16% gain from today’s closing price. Oh
yeah… and the clock is ticking.

Hahaha.
Whoever bought that call was either a lot smarter or a lot luckier than me.

All
of the calls expire this Friday, 2/19/16. Technically anything could happen in
the next week, but I’ve already resigned myself to selling those shares and
finally locking in a loss after all this time. Will I wish that I would have
just waited it out a little longer? Is this the beginning of the great gold
resurgence?

I don’t know, but I feel
pretty shitty about my investing acumen right now. 

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