The Barnard Observer

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Home  Picks  Figures  Great Investors  Vault  Contact              c2003-04 Thomas Barnard

                         Coming Clean - Editor's Own Portfolio

As of December 31st, 2003, cash composed 46% of the portfolio, with 30% in gold stocks, 12% short the Nasdaq and S&P 500 indexes, 8% in assorted small caps, and 3% in energy stocks.  Only one stock was above 10% of all holdings, and that was Newmont (16%).

The large cash position reflects a lack of confidence in the bull market, and a lack of comfortable places to employ capital.  I expect over the year to increase gold holdings, since there is no easy way to buy Euros, and at some point to increase the short position, which is a money losing proposition at this point.

The big winners over the past year were j2 Global (JCOM), XM Satellite Radio (XMSR), and Sirius Satellite (SIRI).  All of which were 100% or more gainers.  None of which I hold anymore.  I think I jumped the gun, and perhaps all will do well this year.  I'm just not inclined to go back at this point.  They are no longer the bargains that I originally purchased. 

Big losers:  December 30 call options on j2 Global, and making it worse was that in trying to close the position, I actually clicked on "Buy", and got more.  Mon Dieu!  That offset a little luck I had earlier in the year with j2 options.  Maybe one is better off owning penny stocks with no expiration date.  I bought Eloan after the re-fi boom was at least temporarily over, so that didn't work out.  Also, a loss was taken on a Nasdaq Index short.  A fair loss on Sun Microsystems was taken so I could take advantage of the satellite radio stocks, which appears to have been worthwhile sacrifice.

My record (approximate because of the difficulty of accounting precisely for additions and withdrawals to accounts):

1994        21.53%

1995        55.14%

1996        50.07%

1997        16.83%

1998        28.46%

1999        54.80%

2000       -17.22%

2001       -77.75%

2002        17.87%

2003      167.95%

Like many people I refused to calculate the losses of 2001.  I only calculated it now, 1/3/04, when I pretty much knew this year had been good.  However, nice as a 167% gain is, it would have taken a 450% gain to restore me to my position in 2000.  Percentages on the downside are much more penetrating than gains on the upside.  So, I am still down a whopping 50% from 2000.

I do not expect much of a return for 2004.  A large chunk of idle cash means that it will be difficult to make very much money, and with a small chunk short the indexes which will offset any gains, it further diminishes the chances of a great return.  My guess is that gold will do well in 2004 and maybe 2005, and that shorts will do well in 2005, with major market indexes improving in 2006.  With an election in the offing, and a president very alert about what is important in getting re-elected, I'm thinking the major averages will be up 10-20% some time during the year.  (1/3/04)