December 17, 2010

My Stock Picks from 1998

Back in the late 1990's I first got interested in investing in the stock market.  I read about stock investing on the internet and first learned about things like P/E ratios.  In 1998 and 1999 I set up several mock stock investments on My Yahoo You can track your stock portfolios over time in My Yahoo.     I still have those old mock stock investment portfolios in My Yahoo account.  I don't know why I kept them exactly. I guess I was just lazy and didn't bother to delete them.   Now its 11-12 years later and I thought it would be interesting to examine exactly how those stock picks have performed.

Notes : Keep in mind this is all pretend money and I did not buy these stocks.  I just setup mock stock portfolios.   For simplicity sake I'm ignoring dividends.  Most of these stocks do not pay dividends.  Some do pay dividends though so that would improve the performance a little bit.  

Disclaimer:  As always I do not give investment advice and I do not make recommendations on what stocks someone should buy.  Nothing here should be mistaken as investment advice.



Portfolio #1 : "Investment Challenge"
This portfolio was based on some sort o stock picking game or contest.

I spent $100,000 and had three holdings:
Ebay : 250 shares @ $206
Dell : 100 shares @ $64.75
WEBB : 3169 shares @ $13.25

Ebay split 2:1 three times and 3:1 once.  That would give you 250 x 2 x 2 x 2 x 3 = 6000 shares.     Dell split 2:1 one time so you'd have 100 shares.   Looks like WEBB died.

Ebay 6000 shares at $30.69 = $184,140
Dell 200 shares at $13,89 = $2,778

The total present value would be $186,918.

Performance : Thats an 86.9% increase in 12 years which works out to a 5.35% annual increase.

Portfolio #2 : "Telecom stocks"

I don't know much more about this portfolio other than what the name implies that it was telecom related stocks.   The portfolio was :
Qualcomm (QCOM) : 11 shares at $47.62
Var-L (VARL): 54 at $9.06
Celltech (CLTK): 45 at $10.94
Total investment $1,505.36

Var-L : is now defunct a "Poster Child of Dot-Com Woes", CellTech : appears to be basically worthless
 Qualcomm split three times, twice 2:1 and once 4:1.  Resulting in 11 x 2 x 4 x 2 = 176 shares. 

Current value of telecom portfolio  : Qcom 176 shares x $49.48 = $8,708.48

The portfolio had 478% growth or a 15.7% annual rate.

Portfolio #3 : "Smart$ Best"
I think this one was from Smart Money in some way.  I'm not sure if Smart Money recommended these stocks or if I used some stock valuation process they defined to find them. Its dated : Jan 1 1998
JMED 16 @ $30.88  = $494.08
MAT 12 @ $41.25 = $495
LEN  25 @ $20.06 = $501.50
DIGI 21 @ $23 = $483
ADI 16 @ $31.31 = $500.96

Total $2,474.54

JMED and DIGI appear to be defunct.   Mattel is at $25.48 so 12 x 25.48 = $305.78
LEN had a 2:1 split in 2004, so 25 shares x 2 = 50 shares currently at $17.69 = $884.50
Analog Devices also split 2:1 one time giving 16 x 2 = 32 shares.   It is s at $37.74 so 32 x 37.74 = $1207.68

Total current value = 305.78 + 884.5 + 1207.68 = $2,397.96

Total loss for Smart$ Best was 3.1% for annual performance of -0.28%

Portfolio #4 : "Smart Test"
This portfolio was also from Smart Money in some way. 

CMVT 13 @ 38.25 = 497.25
MPP 31 @ 16 = 496
MWY 25 @ 19.75 = 493.75
RCII 22 @ 21.88 = 481.36
RON 9 @ 51.75 = 465.75

Total original value $2,434.11

CMVT is OTC but trading at $7.79 so its worth $101.27, MPP, RON both appear to be dead

Midway games is at $0.16.   It looks like they declared bankruptcy in 2009.
Rent-a-center is at $30.33   It split 5 for 2 in 2003 which would give me 55 shares today.   55 x 30.33 = $1,668.15

Total current value $1769.42.


Thats a loss of 27.3% or -2.8% annually.

Portfolio #5 : "My Foolish"
This portfolio was based on a Motley fool stock picking strategy.  I remember this one clearer than the other mock portfolios.   If I recall right the stock picking strategy was a version of the 'Dogs of the Dow' system of picking the Dow Jones stocks with the highest dividend yields.  The portfolio is dated Jan 6 1998

KFT 6 x 0 = 0
MO 10 x 45.88 = $458.8
XOM 16 x 30 = 480
DD 8 x 59.13 = 473.04
DAI 17 x 34.68 = 589.56

Total original value $2,001.4

Exxon split 2:1 in 2001.   So that would be 32 x 30 = $960
DAI is OTC as DDAIF.PK at $72.76 so thats 17 x 72.76 = $1,236.92
DD is at $48.62 and 8 x 48.62 = $388.96
MO is at $24.85 and 10 x 24.85 = $248.5
The KFT stock was spun off from MO if I recall right and had a cost of $0.  It is now worth $30.75 and 6 x 30.75 = $184.5
Total current value = 184.5 + 248.5 + 388.96 + 960 + 1236.92 = $3,018.88

Growth of 50.8% which is 3.48% annually

Performance summary by portfolio :


Investment Challenge = +86.9% or 5.35% annual
Telecom = +478% or 15.7% annual
Smart test = -3.1% or -0.28% annual
Smart best = -27.3% or -2.8% annual
My foolish = 50.8% or 3.48% annual

Lets say I put $10,000 of my money evenly split between these five portfolios.  That would be $2,000 into each.
Investment Challenge = +86.9% = $3738
Telecom = +478%= $11560
Smart test = -3.1%= $1938
Smart best = -27.3% = $1454
My foolish = +50.8% = $3016
Total = $21,706

So that would mean that If I had put $10,000 spread evenly across the five mock portfolios then today the investment would have grown to $21,706.   Thats117% total growth or 6.66% annual growth over 12 years.
Comparatively the major benchmarks were up less.  From 1998 to today the S&P 500 grew about 28%, Dow Jones rose around 44% and the NASDAQ was up about 66%.

However you may notice that QCOM performed exceptionally well and brought up the average substantially.   If you remove QCOM then I'd have actually lost money on these stocks on average.  If I invested equal amounts in the other 15 stocks then overall I'd have turned $10,000 into $8,310.   That would be a loss of 16.9% total or annual loss of -1.5%.

Performance of each stock

I have 16 stocks in the mock portfolios.   Of the 16 stocks only 5 are worth more now than what they were in 1998-1999.   Eleven of the stocks have lost money and half of those are worthless.   Half the stocks I picked are now worthless.

Here's a graphic showing the change in value of the stocks:


Stocks that grew in value are in green and stocks that lost money are red. Theres a lot of red stocks there.   The Qualcomm stock sticks out as it obviously grew substantially more than all the others.  

Conclusion

I don't know if this means anything at all.    On one hand I picked Qualcomm stock which since grew fantastically and if I had bought all these stocks I'd have very solid growth over the past 12 years.   On the other hand half the stocks I picked went bankrupt.  

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