After beating myself up yesterday, I'm going to pat myself on the back today for some trades well done.
Or maybe I was just lucky. Maybe stock picking is all a big crapshoot, and analysis of the past in the hopes of improving future performance is futile.
For the sake of this post, and my ego, I'm going to pretend that, indeed, perhaps there was some intelligence involved with these purchases...or at the very least, less stupidity than in my other trades.
Disclaimer - these are determined from buy point to sell point. Some of these stocks have since tanked while others have soared - leaving me feeling smart and kicking myself, respectively.
So, here they are, my best stock picks ever:
Stock: PeopleSoft (PSFT)
Purchase Date/Price: August 2004 @ $16.95
Sale Date/Price: November 2004 @ $22.75
% Gain (Annualized % Gain): 34% (229%)
Investing Idea: PeopleSoft was in the middle of fighting off a hostile takeover bid from Oracle, involving "poison pills", trashing Oracle's customer service, and the defensive takeover of another software company (J.D. Edwards). Buying PSFT seemed like a reasonable, though certainly not risk-free, arbitrage situation.
What Happened: PeopleSoft finally capitulated after several sweetened bids, ending one of the most ridiculously over-dramatic takeovers of recent memory.
Stock: USG Corp. (USG)
Purchase Date/Price: September 2004 @ $28.93
Sale Date/Price: June 2006 @ $58.10
% Gain (Annualized % Gain): 101% (49%)
Investing Idea: USG, like many other building materials companies, was in bankruptcy due to asbestos-related litigation. However, they had two strong catalysts: the U.S. housing boom (USG is the leading manufacturer of wallboard), and the willingness of Washington to create an asbestos settlement fund.
What Happened: USG emerged from bankruptcy with a clean balance sheet and more certainty in its asbestos-related claims - and its stock price shot up to $122 before settling down in the $50's, helped by a Warren Buffett-backed stock offering at $40 (which is figured in the purchase and sale prices above).
Stock: Maverick Tube (MVK)
Purchase Date/Price: December 2004 @ $29.71
Sale Date/Price: August 2006 @ $64.26
% Gain (Annualized % Gain): 116% (57%)
Investing Idea: Small, undervalued oil services/infrastructure company, with a great balance sheet and low P/E and PEG metrics.
What Happened: Bought out by Luxembourg-based steel pipe manufacturer Tenaris S.A.
Stock: Southern Copper Corp. (PCU)
Purchase Date/Price: March 2005 @ $26.47 (DCA'd and split-adjusted)
Sale Date/Price: (still own)
% Gain (Annualized % Gain): 257% (74%)
Investing Idea: Attractive because of a large dividend (around 10%) but also a play on copper, which at the time was still a relatively cheap commodity.
What Happened: Copper prices have rocketed, at first due to housing, more recently due to the insatiable appetite of China...and still pays that large dividend to boot.
And my best (and, not surprisingly, favorite) trade ever:
Stock: Corning (GLW)
Purchase Date/Price: June 2001 @ $4.82 (DCA'd twice)
Sale Date/Price: July 2006 @ $19.30
% Gain (Annualized % Gain): 301% (31%)
Investing Idea: At first, was purchased as part of my ill-advised "wow, telecom equipment stocks have fallen a lot...they must be cheap" basket of stocks, along with Ciena and Nortel. Corning was being punished for its fiber-optic cable glut, but the market was completely ignoring its market-leading flat-panel glass segment.
What Happened: LCD monitors and hi-def TV's replaced old CRT's, and the stock rebounded from a low near $1 (and near bankruptcy) to a high of almost $30, and now trades in the mid-$20's.
Corning is my favorite stock story because it really tested my convictions of owning a stock - I just knew the market was wrong, and felt strongly enough to not just keep owning the stock on the way down, but to buy more at a bargain price. It's one of a far-too-few personal experiences of diligence in investing.
I'll continue later in the week with my worst and best stock sells ever.
