Thursday, January 24, 2013

Rolling out and up ITW

I have one final transaction to post on from my recent trades – this time, a roll-out and roll-up on 100 shares of ITW.  I'm thinking this will be the last transaction of the month - all that is left to do is watch and wait until the February expiration date, or watch for early calls on some of the contracts.

Regular readers may recall that ITW became something of a special situation in the Rescue My IRA portfolio in December, when 100 shares of the original 200 share position were called on the ex-dividend date at a strike price of $60.  The post on that one is here:  

Since the remaining 100 shares were not called in December, I rolled-out to a January option, and now have bumped up to a March $62.50, which I was able to do with a slight gain in premium.  My intention is to let these shares be called away if they are in the money in March. 

Here’s the analysis through the most recent trade:


The ITW position was established with 200 shares, and is currently 100 shares after a partial early assignment in December.  My basis on the shares is $56.37 per share, and the stock is currently trading near $64.  I have sold covered calls at strikes ranging from $57.50 to $62.50 during the course of this position.   

Total option premiums:  $475.37
Total dividend payments (estimated through the current contract):  $262.00
Total stock gain at $62.50:  $941.78 (includes the gain already recorded on 100 shares)
Total, absolute gain on the position:  $1,679.15
Total, absolute return percentage ($1,679.15/$11,274.00):  14.89%
Annualized total return percentage (held approx 390 days):  13.94%

Wednesday, January 23, 2013

Two More January Roll-outs: HAL and SWK

Last Friday was the monthly expiration date for options on the CBOE – I didn’t have any January calls that were subject to exercise, having rolled those positions out (and up in some cases), but I still have a couple of trades this month that I haven’t posted yet.  So I’ll take care of that today, showing the analysis of HAL and SWK.

As a quick forecast of my monthly results, after 10 trades I am just about even on call premiums and dividends.  The monthly net is a negative $47 or so, but with the roll-up adjustments I’ve taken during the rally here, I’ve adjusted my strike prices upward so that I have the potential to recognize $2,500 or so in stock gains.

That’s a fair trade, now to manage these positions to deliver those results.

Here’s the analysis on HAL and SWK:


The HAL position consists of 300 shares.  My basis is $34.33 per share, and the stock is currently trading in the money above my $35 strike.  I rolled the January contract to February in this trade; assuming it is still in the money next month I will allow it to be called away. It is close to meeting my goal of 12% annualized return, but not quite there.    

Total option premiums:  $643.08
Total dividend payments (through the current contract):  $81.00
Total stock gain at $35:  $182.92
Total, absolute gain on the position:  $907.00
Total, absolute return percentage ($907.00/$10,299.90):  8.81%
Annualized total return percentage (held approx 310 days):  10.37%


This is a100 share position with a basis of $72.92; I’ve sold calls with a strike price of $72.50, which would have resulted in a small loss on the sale, but my current contract is at a $75 strike. I will allow this to be assigned assuming it is in the money at February expiration – the stock has returned nearly 14% since I bought it, so it met my goal. 

Total option premiums:  $679.20
Total dividend payments (through the current contract):  $139.00
Total stock gain at $75.00:  $191.32
Total, absolute gain on the position:  $1,009.52
Total, absolute return percentage ($1,009.52/$7,291.50):  13.85%
Annualized total return percentage (held 300 days):  16.84%

Thursday, January 17, 2013

Rolling WAG and MSFT Out and Up

On the heels of rolling out and up the CAT position last week, I made similar adjustments to my WAG and MSFT positions.  On the basis of improving my total returns on the shares, I’m satisfied that progress towards a 12 percent annualized return is a good goal, and that would seem to be enough to justify these trades.

However, I am not convinced this is an efficient way to make money.  In the case of WAG traded my returns from call premiums in for additional share gains that I won’t recognize unless the stock is called away.  The MSFT position is more of a stock repair approach, since it has been a “dog of the dow” for the last year. 

I need to think about the implications of this approach a bit more and consider whether I need to make an adjustment to the trading plan – a review of that guideline is probably overdue anyway - to help me decide how far to go when the opportunity for a roll-up presents itself.   In the meantime, here’s the analysis of these two positions.


The WAG position consists of 300 shares.  My basis is around $34 per share, and the stock is trading near $40.  I held $35 strikes for a long while until recently rolling up to a $40 strike. 

Total option premiums:  -$154.85
Total dividend payments (through the current option contract):  $270.00
Total stock gain at $40.00:  $1,861.02
Total, absolute gain on the position:  $1,976.17
Total, absolute return percentage $1,976.17/$10,121.80):  19.52%
Annualized total return percentage (held approx 580 days):  12.29%


This 300 share position has a basis of $32.51, but the stock hasn’t traded above the current strike of $30 for some time now.  Instead of closing it out at a loss, I’ve ridden the situation out with longer-term covered calls.  At this point, even though the strike I have written will yield a loss on the shares, the trade will be better than breakeven if the shares are called away on the current contract.

Total option premiums:  $564.62
Total dividend payments (through the current contract):  $360.00
Total stock gain at $30.00:  -$770.54
Total, absolute gain on the position:  $154.08
Total, absolute return percentage ($154.08/$9.753.43):  1.58%
Annualized total return percentage (held 430 days):  1.34%

Thursday, January 10, 2013

Rolling CAT Up and Out

I took advantage of the rally during the first week of January 2013 to make some adjustments to positions – especially those that had January expirations, as my 100 share position in CAT did.  I first bumped up to a $92.50 strike, and then to a $95 – a two-step roll-out is not as efficient as it might have been, but if the position is called at this price I will have completed a hat trick and exceeded my goal of 12% return on invested capital.

I'll put up two more posts about the early January trades over the next week.

Here’s the analysis of the CAT position.


The CAT position consists of 100 shares.  My basis is $87.17 per share, and the stock is trading near $95.  I sold a January $90 covered call before rolling to a February $92.50 and then a May $95. 

Total option premiums:  $556.20
Total dividend payments (including the forecast March ex-dividend):  $156.00
Total stock gain at $95.00:  $765.83
Total, absolute gain on the position:  $1,478.03
Total, absolute return percentage ($1,478.03/$8,716.99):  16.96%
Annualized total return percentage (held approx 240 days):  25.79%

Wednesday, January 9, 2013

Adjusting LNC: A Roll-Out

During the rally last week I took advantage of the action to roll-out a few of my positions, and I also rolled a couple up to higher strike prices.  As a result, I no longer have any covered call positions with a January expiration, including the LNC position I established with an eye for an early call on the ex-dividend date of January 8. 

I had rolled the $26 covered call on LNC from January to February to collect a little more call premium revenue.  The position has been in the money the whole time I’ve held it, rising to more than $27 by yesterday – with a $0.12 per share dividend in the offing, I thought an early call was a pretty sure thing.  But you never know, and the shares were still in my account this morning, January 9.

So here are the results of the roll-out.  I will have a few more posts up about the rest of the action in a few days.


The LNC position consists of 400 shares.  My basis is $25.87 per share, and the stock is trading north of $27.  I sold a $26 strike and have rolled it out once. 

Total option premiums:  $398.93
Total dividend payments (including yesterday’s ex-dividend):  $48.00
Total stock gain at $26.00:  $36.09
Total, absolute gain on the position:  $483.02
Total, absolute return percentage ($483.02/$10,346.80):  6.23%
Annualized total return percentage (held approx 60 days):  37.90%

Monday, January 7, 2013

2012 Retrospective, Top Five Trades Part 2

In yesterday’s post, I highlighted three of what I consider my Top Five Trades of 2012.  Today’s post features the final two of those trades, and this is the final of my 2012 year-end retrospective posts.  It’s already been a busy month for trading and I have some results that I will be sharing soon.  In the meantime, here is a recap of some my IP and DIS trades, stocks I’ve held a couple of times over the course of the Rescue My IRA trading history.

Another Hat Trick with IP

There is a stock that I learned about on the Yahoo Covered Calls board – I get a lot of ideas from there and I have learned a lot about covered calls investing from the people who post there.  In the case of IP, I have been able to take a position in the shares several times and consistently come up with a hat trick or triple play, where the total return includes covered call premiums, dividends, and stock gains.

That was the case again in August 2012, where I had sold covered calls on 300 IP shares at a strike price of $33.  I ended up with the shares for 30 days this time and collected dividends in the process.  Here’s the history of this most recent position:

IP – 300 Shares, average basis $32.02, 33 Aug 2012 assigned
Option Premiums (total):  $140.23
Dividends Collected (ex-dividend 8/13/2012:  $78.75
Stock Gain:  $275.89
Total:  $494.87
Absolute return 5.15%
Annualized return (30 days) 62.67%

Quick Hit on DIS
I’m finding that over the course of a year there are several stocks that I establish positions in a few times during the year, DIS being one of them.  Now the jury is still out as to whether entering and exiting these positions is as efficient and effective as a more traditional buy and hold strategy – but I suspect that I get a little more control with the covered calls and in the long term should do better by a few points.  We’ll see…

In any case, the final trade I’d like to highlight in this Top Five series is a March 2012 DIS position that I established with 200 shares.  This one was another quick turnaround trade – February had been a month with a lot of call assignments and DIS was one of the positions I established with the proceeds. 

I ended up holding DIS this time for about 30 days.  I didn’t earn the hat trick, but I did collect both covered call premiums and a stock gain, for an absolute return of 2.13%.  Here’s the analysis of that trade:

DIS – 200 Shares, basis $41.64, 42 MAR 2012 assigned
Option Premiums:  $122.49
Dividends Collected:  $0.00
Stock Gain:  $55.00
Total:  $177.49
Absolute return 2.13%
Annualized return (30 days) 25.93%

So, that’s a wrap of the 2012 retrospective posts.  Overall, I’d call the year a success – even though I didn’t achieve my goal of earning 12 percent on my investments, I did have a positive return overall, and I learned a lot.  I like the approach and I will keep using it, applying what we’ll now call “wisdom” in the hopes of improving my returns next year.
Here’s to a successful trading year in 2013!

Sunday, January 6, 2013

2012 Retrospective #3: Top Five Trades, part 1

For the final of these year-end retrospective posts, I thought I might take another look at a few trades that went well last year.  I highlighted some very painful experiences in the last few posts, so I figure we might as well close out with a couple of good results.  So here are five trades – let’s call them the Top Five Trades – of 2012, which I will summarize over the course of my next two posts.

Called Away Early and a Roll-out:  ITW

Even though the first couple of weeks of December were soured by the end of the HPQ debacle, there were two other positions that had the potential of being called away on their ex-dividend dates.  In the case of ITW, which started the month in-the-money at a $60 strike price, I listed it as a likely assignment in my monthly forecast.

As it turned out, 100 shares of the 200 share position were called away on the ex-date.  As the share price was adjusted and then dropped after the dividend calculation, I closed out the remaining December option and rolled the remaining 100 shares out to January.  Although the situation means I’m paying for a second sell commission when that time comes, I’ve been able to add to my returns to compensate for that, adding about $50 net on call premiums and $38 in dividends.

As the market rose during the first week of January 2013, I closed the January $60 option and rolled to a February $62.50 – and the stock is still in the money.  The results I’m showing below include the new contract.  Assuming the shares are assigned in February, ITW will be a triple play, netting a total of $1,679.15 in call premiums, dividends, and share gains – and my return meets the goal of earning a 12 percent annualized return on invested capital.

Here is the analysis:

March 2012 Bought 200 shares at an average price of $56.37, total position basis $11,274.00
12/14/2012 Sold on assignment 100 shares at $5,982.89, share price $59.83.  I rolled out the remaining shares and have a February $62.50 in place on them. 
Total estimated stock gain:  $941.78

Total options income:  $475.37

Total dividends collected:  $262.00

Net Profit:
Total Net Profit after Assignment:  $1,679.15
Absolute Return on Investment: ($1,675.15/$
11,274.00) = 14.89%
Annualized Return (330 days):  14.89%*(365/390) = 13.94%

Called Early on CAT Jan 2012

During 2012, I held positions in CAT a couple of times.  The trade I made in January 2012 bears mentioning as a Top Five Trade because it was a short turn around trade, designed around an approaching ex-dividend date – that’s not an approach that works every time, but when it does, it’s rewarding and a lot of fun.  This CAT trade is one of two trades of this type I’ll feature here.

I actually bought the CAT shares on December 29, 2011, looking forward to a January 18, 2012 ex-dividend date – a potential holding period of 22 days.  During that period, the stock price ran up over $100 per share, easily blowing past the $92.50 strike I had sold my covered call at, a price where I could record a generous gain since my basis was $89.53.  I didn’t get the dividend of course, so the trade isn’t a triple play, but all in all I’d say things worked out great – and I far exceeded my goal of a 12 percent annualized return.

Here’s an analysis of the results – net of commissions.

12/29/2011 Bought 100 shares at $89.53 (total $8,953)
12/29/2011 Sold to open 1 CAT 92.50 Jan 2012at $1.60 (total $151.74)
1/18/2012 Assigned on 100 shares at $92.50 (net $9,232.82)

Net Profit:

1) Options Income:  $151.74
2) Dividend Income: None, assigned on ex-date
3) Capital Appreciation: $9,232.82-$8,953 = $279.82

Total Net Profit after Assignment:  $279.82 + $151.74 = $431.56
Absolute Return on Investment: ($431.56/$8,953) = 4.71%
Annualized Return (22 days):  4.71%*(365/22) = 78.14%

In the Money Dividend Trade with MAS

The MAS position I held in July 2012 was another trade designed for the short term around an approaching ex-dividend date.  Even though it was in the money on its ex-dividend date, the shares weren’t assigned – that’s point of interest number one.  Point of interest number two was the fact that this small position (200 shares) was established with covered call premiums and dividends I had collected over the course of my June 2012 trades.

If the shares had been called early, I would have held them only a week – and my annualized return would have been among the highest I’ve realized so far in the Rescue My IRA account, even though the cash value of that return is pretty small.  In the end, my absolute return increased with the dividend payment, but the annualized return went down, since I held the shares three times longer than how I had designed the trade.

Here’s the analysis:  


6/26/2012 Bought 200 shares at average share price $12.24 (total $2,447.00)
6/26/2012 Sold 2 MAS JUL 2012 $12.00 at $0.70 (total $130.49)
7/3/2012 MAS went ex-dividend, not called away ($15.00)
The shares were assigned on the July expiration.

Net Profit:

1) Options Income:  = $130.49
2) Dividend Income: Ex-date was July 3, dividend was $0.75/share ($15.00 total)
3) Capital Appreciation when assigned at $12.00:  -$65.00

Total Net Profit when assigned and with dividend collected:  $130.49 + $15.00 - $65.00 = $80.49
Absolute Return on Investment: ($80.49/$2,447.00) = 3.29%
Annualized Return when Assigned (20 days):  3.29%*(365/20) = 60.03%

Friday, January 4, 2013

Rescue My IRA 2012 Results - in Black and White

The calendar year 2012 was the first full year of the Rescue My IRA account.  As I’ve posted in this recap series already, it was a year with some good learning experiences – and some losses.  Still, the end of the year saw a gain overall on the account’s value – which increased from $127,606 on December 31, 2011 to $132,852 on December 31, 2012.  That’s better than my retirement accounts have done under professional management for the last few years, so I’m signing up for another year.

In keeping with how I reported the annual reports last year, this post will provide a very short summuary – that’s mainly to ensure that it is not redundant with the monthly results posts.  It is meant to be read alongside the other recap posts I’ve been putting up this week, a series that will conclude with my next post – about the most successful trades I had last year.  That one is meant to be a companion to the one I wrote yesterday about my three worst trades.

Speaking of which – those big hits I took on ACM, ADM, and HPQ added up to more than $9K.  Perhaps if I had avoided the mistakes I made with those positions the results would have been better, but it’s not likely that a year is going to pass without a few mistakes.  The one of that lot that I am pretty sure I can avoid is what happened with ACM, because those shares weren’t purchased through the Rescue My IRA account, and they wouldn’t have passed the trading plan criteria.  It’s reasonable to think that I could have avoided that loss, which was about $5K and would have effectively doubled the account returns.

Here’s a quick summary of the results:

12/31/2011 Account Value:  $127,606.44
12/31/2012 Account Value:  $132,850.69
Net increase in account value:  $5,244.25
Annual percentage return:  4.11%

The goal for this account is to make 12% annually, and I fell short this year.  But I know where I went wrong on the approach, and I am convinced that a 12% goal is within reach for calendar 2013.  So we forge ahead.

My next post will close out this series on the 2012 annual recap.  I have a list of five trades to take a retrospective look at – five trades that went well, and which offered their own lessons learned, just as the big hits and others have.

Plus, with the great positive market action this week in the wake of the “fiscal cliff” legislation, I already have six or so adjustment trades that I need to write catch-up posts on, so those will be coming along next week.

Wednesday, January 2, 2013

2012 Retrospective #2: Worst Positions of the Year

I’ve already posted about three positions where I took losses during 2012, but in this retrospective post I wanted to go back and take another look at them – in the style of yesterday’s post, I have some lessons learned from each of these that I’ll share.  The yarn will unwind chronologically based on the date I closed the position, the order they are listed in the post’s title.

Adding up the absolute losses on the three positions, you get a total of $9,086.06.  That is a lot of money, but by the end of the year my account value showed a gain – so I rest on the strength of the portfolio model.  I am going to take some losses from time to time, and in these cases I believe I understand what went wrong. 

They’re mistakes I’ll try not to make again.

Biting the Bullet on Legacy Holding ACM

ACM is the company I used to work for, and one of the options for the 401(k) plan there was to buy shares at a discount to market.  I was there for nearly four years, and had accumulated 800 shares by the time I left.  The basis of the shares was around $25, so this position represented about 20 percent of the portfolio I was holding in the Rescue My IRA account after I transferred it.

Soon after I left the company and completed the transfer, the stock dropped from $28 or so to $22.  I could handle this and had planned to wait for the comeback.  But then, early this year, it dropped again to $15 or so, as I recall.  While I could have taken on some kind of stock recovery plan, I’d lost my patience and sold the shares (it turned out that I would have needed to because of some business conflicts at my current job as well). 

I sold the shares and took the loss, rolling the funds into a position with URS – a similar large architecture and engineering firm.  I still hold that 400 share position, and it appears to be performing up to my standards on the account. 

Here’s a repeat of the position analysis for ACM:

November 2012:  Transferred 880 shares in from my 401(k) during the rollover.  I sold 80 shares immediately so I would have 8 round lots.  My basis was about $25.00 per share.
5/8/2012 Sold 800 shares at $14,784.66, average share price $18.49
Total stock LOSS:  -$5,233.34

Over the course of this holding, I have had covered calls with March, June and September expirations at strike prices between 22.50 and 25.00; total options income:  $204.91

ACM is not a dividend payer.  It is a legacy holding that was not selected based on the trading plan, and has always been a candidate for divestment because of this.

Net Profit:
1) Stock loss:  -$5,233.34
2) Options income:  $201.91
3) Dividend Income: $0

Total Net loss upon divestment:  -$5,233.34 + $201.91 + $0.00 = -$5,028.43
Estimated Absolute Return on Investment: -25.14%
Annualized Return:  Not calculated

This is a case where I probably should have eliminated more of the position when I made the rollover.  ACM didn’t fit in my portfolio, as defined by my trading plan (it is unrated by S&P and it doesn’t pay a dividend are two of the reasons).  The concentration in the shares represented about 20% of my portfolio, where I generally won’t have more than 8% in a position.  So, with all of that working against the position, it’s a wonder I didn’t take a worse hit.

The shares have recovered somewhat in value, but I judge the position as an underperformer in any case.  I feel quite confident about the current URS position.

ADM – Just a Bad Pick

This symbol is so similar to ACM – perhaps if I were more suspicious, I would have anticipated that I was going to run into some trouble with this one.  During a summer of volatility, the stock reported disappointing earnings and the bottom dropped out.  I took the loss, but was able to make up for it inside of the month given the ongoing market action – and I moved the funds into a new CAT position, which I am still holding at the time of this post.

ADM was rated 3 stars by S&P when I bought it, so again, this is a case of not following the trading plan.  I’ll keep the analysis on this one brief:

300 Shares, basis $30.82, cost $9,246.88
Option Premiums (total):  $597.97
Dividends Collected:  $52.50
Stock Loss:  -$1,724.05
Total:  -$1,073.58

Rushing to Purchase HPQ

HPQ is another stock where I made a bad pick.  There was dramatic news for the company during 2012, information that I deemed positive.  And since I needed to get my funds back to work quickly, I simply may have rushed the situation, violating some of my trading plan rules in the meantime. 

As far as the good news goes, it came early and then everything went pretty bad.  I pulled the trigger on 400 shares in August because there was a new CEO, who had a good reputation.  It was a 3 star S&P stock, which led to a lesson I’ve finally learned:  I will only invest in S&P 4 and 5 star companies now. 

Then came some poor earnings news.  I thought I could leverage my basis down with 100 shares and added them, and then I adjusted my covered call strategy to maximize cash yields.  Finally, there was the news that the company had made a bad purchase decision on an acquisition, and I decided that it would just be a lot of work to fix the position.  It was called away in December on the ex-dividend date.

Now, there were some promising aspects of this position – counted by themselves, the returns I earned from call premiums and dividends are almost 9 percent, which annualized meets my goals on returns. But my loss exceeded that amount.  That smarts, but I figure that is something that will happen from time to time, as it did with ACM and ADM.  We have to hope that the portfolio model I use can absorb this variation, covering it and then some with a few gains and mostly steady performers.

Here’s the story of the HPQ position:

8/20/2012 – Bought 400 shares for $7,919.00.
9/25/2012 – Bought 100 shares at $1,697.99.
Share basis of 500 shares is $19.23

Total Option Premiums:  $802.16
Total Dividends:  $52.80
Total Stock Loss:  -$3,634.10
Total Absolute Gain/Loss on the position:  -$2,779.14

2012 Retrospective #1: Some Lessons Learned

As we begin a series of three or four retrospective posts about last year’s trading, I thought I might take a moment to make a note about some recognition for the blog.  As I posted back in August, there was a post on Commodity Traders HQ about the blog, ranking it in the "Top 100" of options trading blogs.  And more recently, the folks at Safe Options, a blog I follow over in the right hand column, recommended Rescue My IRA as a good resource for people interested in trading options.  Here are links to those two sources:


For the balance of this particular retrospective post, I want to take a look back at the “lessons learned” entries that are sometimes included in the monthly recap posts.  In the earliest two or three, I had simply documented some trading practices – especially in cases where I was trading to make a position adjustment.  After the first few of these, I came to the conclusion that these trades should be conducted at a premium whenever possible.

There's also one about the importance of considering portfolio concentration, or the weighting of any particular position - but I have another post in mind for that story, which dealt with ACM shares.  There are two other trades that I will highlight in this post – the “dividend grab” I did for my NVS position and the poorly timed trade on COP, just before the PSX spin-off. 
These are taken from the original posts but edited for brevity here.

NVS Dividend Grab:  I moved hastily to capitalize on the 4% annual dividend for this stock.  In hindsight, it wasn’t a good idea to rush to pull the trigger.  I failed to include the ex-dividend price adjustment for the shares, which was substantial at 4%, and the error meant that the return calculation was wrong and actually below what I’ve set as the goal for Rescue My IRA trades. 

The position was called a month or two after the ex-dividend date.  I’d managed to sell two covered calls on the shares while I held them, and was back to breakeven on the position by the time I had them called away.

Then the dividend was paid – there was one more oversight in the trade.  NVS is a foreign stock, and there was a withholding for home country income taxes taken out of the dividend before it was credited to my account.  This reduced the annual dividend from about 4% to around 2.5% - the dollar value of the taxes was $87.

After all was said and done, I lost about $60 on the trade – about 1% of the investment. 

My lesson learned?  I adopted a new motto for Rescue My IRA after that:  Be not hasty.  It’s pretty much like anything else – if it sounds like there is an easy gain to be had, make sure that you’ve considered everything in the mix before you pull the trigger. It might still work out, but be prepared that it might not.

Watch and understand the news:  The second position worth noting as a “learning experience” was what happened to COP.  This is a stock I’ve held before in another account and had done well with - over the last ten years it paid a steady dividend and had reliable earnings that have meant share price gains. 

However, the company undertook some strategic “financial engineering” with some of assets in 2012, and I didn’t fully understand the impact that would have in the price of the shares.  I received shares from the spinoff of these assets – I recognized this as a dividend payment in my return calculations – and the price of the original COP holding was adjusted downward.  The option I had on the position was adjusted to be for original COP and the spinoff PSX, which would not pay dividends in the future.

So I closed out the option, and after doing a quick Monte Carlo analysis with the COP position, net of PSX, decided to close it out and put the proceeds to work with another stock.  The transaction resulted in a loss of about $187 on this position, which had a basis of $6,988 – overall, a 2.7% loss on the position.

The lesson learned is to watch the news diligently on Rescue My IRA positions, and consider carefully the impact these types of events can have on the shares.  I’ve never been a big fan of financial engineering by any firms, as I feel that this kind of activity masks management failures and defers recognizing them for the mistakes that they are...it’s something I will keep an eye out for in future positions.

I have a couple more posts to follow on the topic of 2012 Retrospective.  Next up is the story of three stocks - ACM, ADM, and HPQ - trades that I took some big hits on this year.