'Your column is one I won't miss," a money manager told me earlier this year, "but you're very hard on yourself when you get things wrong."
True. There's an awful lot of self-flagellation here. But it serves a larger purpose: The mistakes in this column are very clearly on record, and it's best to admit them before someone else gleefully points them out.
Or, as I also like to say, you can't be right all the time unless you admit when you were wrong.
So, in deference to the readers who think I dwell on the failures more than the successes, let's kick off this midyear review of VOX with a home run.
Generally, it's tough to look at a pick made just a few months back and see a clear winner. Not so with obscure investment company Senvest Capital Inc., which I profiled in a Feb. 27 piece called "The Value Stock That Few Know About."
I said the company almost willfully obscures itself, offering little disclosure of its investments. But patching together its holdings from various securities filings, I noted its portfolio seemed to have greatly appreciated, and Senvest's future measures of its book value would capture it.
Senvest shares were $68 at the time; they last traded at $103, a gain of more than 50 per cent. (I don't buy all my picks, but I did purchase 100 shares of Senvest a few days after the column ran.)
For many of 2013's other picks, it really is too soon to tell. Silver Bay Realty Trust, a U.S. REIT that has bought up distressed housing properties and plans to rent them profitably, is down nearly 8 per cent, thereby underperforming the hot U.S. equity market by more than 20 percentage points. It's not a good time to be a cash-flow-negative real estate investment trust with a tiny dividend yield, so the decline is understandable. I still find the company intriguing in the long run, however.
Similarly, NL Industries, one of two companies kicked out of the Dow Jones industrial average more than a century ago, looked intriguing based on a sum-of-the-parts valuation. "Many times, the valuation gap persists for a long, long time. Who knows when, or if, NL Industries shares will rise to close the discount?" I asked. It's underperformed the market by nearly 18 percentage points since I wrote about it in mid-March.
Because of the hazards of passing judgments so soon, I spent time reviewing 175 stocks, from columns over the previous two-plus years, for which I had an opinion that resembled a "buy" or "sell."
I'm pleased to say that more than 70 per cent of my "buy" calls have beaten the performance of the major index in their home country – the S&P/TSX 60 here, the S&P 500 in the United States – from the pick date to this week. More than 40 per cent have beaten the index by 25 or more percentage points.
My overall track record is only about 56 per cent, however, owing to a number of "sell" calls that have defied my skepticism. Nearly a third of my "sell" calls have beaten the market by 25 or more percentage points, too.
Some all-time winners: Lions Gate Entertainment Corp., the maker of the Hunger Games movies, which has quadrupled since my "buy" in September, 2011, and has gained 75 per cent since my March, 2012, reiteration. (I owned 100 shares for part of this period, but sold, satisfied with a mere 50-per-cent gain.)
Other prescient "buy" calls: Gildan Activewear, at its lows in December, 2011; Lee Enterprises, a U.S. newspaper company operating in bankruptcy in January, 2012; Bauer Performance Sports in June, 2011; Alimentation Couche-Tard in July, 2011; and AutoCanada in May, 2012. All have beaten their respective indexes by 100 percentage points or more.
How about those companies that have overcome my skepticism? Pandora Media, which I doubted just last December, has more than doubled since. Chuy's Holdings Inc., a supposedly underwhelming chain of Mexican restaurants, is up more than 130 per cent since I pooh-poohed it in August, 2012.
While a "buy" on Poseidon Concepts late last year is my all-time worst call, the "sell" on LinkedIn Corp. in May, 2011, when I thought it was overvalued at $32 is probably the worst in percentage terms; it's up about 470 per cent since.
But I reversed course on LinkedIn last December, and it's up more than 55 per cent since. That same month, I took back another bad call, a June 2011 "sell" on Dollarama at less than half today's levels; it's up 34 per cent from that point.
Which kind of gets me back to where we were before: You can't be right all the time unless you admit when you were wrong.