Sunday, January 03, 2021

2020 Year End Review

What a year! That’s an understatement. If you told me that we’ll be engulfed in this pandemic, I would have been happy with a down 20% return for the year. Looking back, I should have been much more aggressive in acquiring shares during the down draft in February and March. Instead I just nibbled on some Mastercard and Visa, which I did manage to buy near their lows, but it simply was not enough to make a difference. I maintained a cash hold of ~ 15% through the year until the Airbnb ipo came along. I deployed some cash into Airbnb. Other than that, I maintained my usual long term holdings and participated in the merger arb game. Surprisingly I managed to generate a total return of 32.81%, which I can really thank Apple.

Early in the year, Qiagen was in play once again with Thermo Fisher making an offer. I sold half my position when Qiagen traded above the offer price, which was a mistake. Looking back, I should have held on to my entire stake. I was afraid that Qiagen would plummet if Thermo Fisher walked. Thermo Fisher did not offer a big bump in price and walked. Qiagen held steady and continued its steady ascent.

It was actually a fairy active year for merger arb plays. The merger arbs contributed to ~ 7% of my overall gains, which generated some nice positive alpha. I was involved in Aimmune Therapeutics, Forescout Technologies, Immunomedics, Jumei International, Mellanox, Momenta, Myokardiac, SORL Auto Parts, Stemline Therapeutics and Tiffany. I would say majority of these merger arb plays were executed via Short Puts. I really like using options with these high probability plays. I am still in Tiffany via Short Puts and looking for this deal to close by the end of the week.

As I mentioned earlier, I finally initiated a new position and that was in Airbnb (~4% position with an average price of ~ $137). I am looking to add to this position in the low $100s. I am definitely holding this for the long term as I see this company disrupting the travel industry and accelerating its growth. I seldom go for these high flyers, but Airbnb has proved that it can survive through this pandemic. Time will tell, but I like the odds of this company growing significantly over time. You really have to be patient and hold for the long term to see the big gains.

So what do I expect for the New Year? I hope to see some of my laggards in 2020 step up such as Alibaba, Mastercard, Visa, Sanofi and Constellation Brands. Honestly, if I can generate 10%+ in 2021, I’ll be very pleased.

That’s all I have... Have a Very Healthy and Prosperous New Year!

 


2020 Performance = +32.81% with the running monthly returns as follows:

January +2.7%
February -6.8%
March -9.9%
April +12.3%
May +6.6%
June +3.8%
July +6.1%
August +11.8%
September -4.2%
October -6.7%
November +10.8%
December +5.5%

Annual performance for the past nine years is as follows:

2012 +61%
2013 +44.61%
2014 +29.47%
2015 +33.48%
2016 +14.61%
2017 +42.12%
2018 -4.11%
2019 +40.17%
2020 +32.81%


CAGR from 2012 to 2020 = 31.43%

3 Comments:

At January 04, 2021, Blogger Alpha Vulture said...

Very solid results, congrats!

 
At January 04, 2021, Blogger Money Turtle said...

Thanks! I really enjoy your excellent blog. Your performance is one of the motivating factors for me. It shows that one can outperform the market with the special situation plays.

 
At March 04, 2022, Blogger failynracette said...

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