The Markets Are Open Celebrates Their One Year Anniversary (NASDAD: AAPL) (NYSE: BAC) (NYSE: GE) (NASDAQ: SIRI)

Link to our first article

The Markets Are Open has reached one year of age and we hope you have enjoyed reading our stock reports and articles. To celebrate the occasion, we have marked down all our stock reports by not $1 not $2 but $3. These reports can be found in our stock reports section.

The goal of this site is to recommend stocks and back these reports by tracking our performance. We do this by putting these stocks in a long and short portfolio. The long portfolio tracks our buys and the short portfolio tracks our shorts. The returns in these portfolios is how an investor would have done had they followed every move we made over the past year. We felt we should put our money where our mouth is when recommending stocks. Other personalities such as Jim Cramer, Motley Fool and Standard and Poors : write stock reports but they do not track their performance making their results flaky. We have found these entities mention their successes but not their failures; we show both.

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The portfolio includes all our transactions with successes but also some mistakes. We try to minimize mistakes but this is not possible. Our #1 priority is to never delete or re-update our reports based on hindsight such as Jim Cramer or Standard and Poors (S&P). Though we have no official audit committee of our results, we have our own ethical standards that ensure our results are properly recorded. Jim Cramer often touts how he recommended a stock, even though he changed his opinion along the way. S&P which writes stocks reports will often delete information that does not correspond to how a stock moved.  For instance they recommended to buy HCBK at $12 and said it would go to $15 based on a historical price to book of 1.5. When they updated the stock, which then traded at $9, they decided to delete their previous opinion. They now state the stock will go to $12 based on a historical average price/book of 1.2. Not only is this unethical but they are making up historical averages.

Our website will never cheat like Cramer, or S&P therefore we are more credible in our record keeping. We will never tout our successes, and ignore our failures. Successes and failures are equally important.

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Our results

Long Portfolio

The performance of our long portfolio was a gain of 34% on the year.

Markets Are Open Performance vs. the S&P 500

Year........% Return in MAO,,,% Return in SP 500..Relative Results

.................(1)  34%...................17.1% ..................(1)-(2)   16.4%                                                                                                                                

We had an excellent year in our long portfolio. Our first position was HCBK which was our first mistake. We bought the stock at $13 and sold it in August for a 7% loss. However we did use this knowledge to more astutely predict HCBK's recent share collapse (HCBK Prediction). Our next position was Apple at $250 which was sold at $360 and was recently bought back! Since then we have built up large positions in companies such as PNC, which we bought in August. We look to continue earning outsized returns on the market. In fact PNC is the best performing bank of the 10 largest banks in the U.S. since we opened our position on August 26.  Our results for the year are actually better than shown by these percentages. The S&P tracks the performance since we began investing on May 16 with a constant base while many of our buys were bought when the S&P traded at significantly higher levels.

We believe the best way to gain outsized returns is to invest the highest amounts in the stocks we are most confident in and lesser amounts in stocks we are less confident in. Though we do not believe in diversification for our own portfolios, on the website we maintain a diversified portfolio another thing which puts a drag on the returns we could get compared to the ones we currently get. Though we will by buying more of the stocks we are most confident in. 

We seek returns of 2 to 1 on the S&P 500 in the long portfolio. We believe we can continue doing this.

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Short Portfolio

Markets Are Open Performance vs. the S&P 500

Year.....% Return in MAO,,,,% Return in SP 500....Relative Results

...........(1)  1.25%.....................17.1% ...................(1)+(2)   18.4% 

An astute reader may wonder why our results in the short portfolio are positive, despite only returning 1.25% compared to a 17.1% gain by the S&P. The reason for this, is when the S&P goes up our stocks usually also go up making it harder to make a gain by shorting. If the S&P went up 100% and our short position stocks only went up 50%, we would technically be beating the S&P 500 by 50% even though half our money would be lost. We do not believe in long term shorting, but we track our short position because when most analysts recommend selling a stock, we have found that the stock they have recommended selling do better than the ones they said to buy. We wanted to prove that we can make short predictions as well, though this is not our strength. The market has gained substantially since we began shorting and we managed to make money in this portfolio. We would be satisfied with break-even results or small gains in this portfolio in up years by the S&P 500.

We had some big losses in this portfolio to date, with over $20,000 lost from shorting Netflix from $156. This was my genius decision to short the stock. We also are down $18,000 in our short of  Sirius Radio. Our biggest gain was $50,000 from shorting BBX a bank we felt would go bankrupt that vaulted higher in share price due to unfounded buyout rumors. The rumors said PNC would buy the bank. Our knowledge of PNC allowed us to dismiss these rumors as false and we believed if they were true the price PNC would offer would be substantially below the speculated price which pushed the stock to $1.5. We believe our Netflix and Srius positions are likely to reverse in the next year and we consider these our cornerstone short positions. We cannot predict when the market will re-evaluate our portfolio stocks to their correct prices. All we can do is identify stocks well off their intrinsic values and recommend buying them or selling them.

Please fell free to read our reports or purchase our premium ones. The links can be found below

To read our reports click here

Link to portfolio performance click here