December 2013 Picks

December 2013 Picks

Welcome to the December update. We begin with the Plan 5 Monthly results:

Plan 5 Monthly: November 2013 Results

Nov 1 Open Nov 29 Close % Change
Buffalo Wild Wings (BWLD) 143.28 150.24 +4.86%
Caesarstone (CSTE) 42.31 49.15 +16.17%
Dreamworks Animation (DWA) 34.15 31.86 -6.71%
Netflix (NFLX) 328.83 365.80 +11.24%
Tesla Motors (TSLA) 163.00 127.28 -21.91%
Plan 5 Monthly: September 2013 +0.68%
S&P 500 1758.70 1805.81 +2.68%

A small gain for Plan 5 Monthly this time around, not enough to match the S&P 500’s gain in the same period. Three successful picks were dragged down largely by Tesla’s continued plunge. I’ll get back to that in a moment, but first here are December’s picks:

Plan 5 Monthly: December 2013 Picks

Company Symbol
Caesarstone CSTE
3D Systems DDD
Illumina ILMN
Netflix NFLX
Tesla Motors TSLA

If you’re following along with Plan 5 Monthly, it’s time to update your portfolio. You can find a review of how to rebalance your portfolio with the new set of picks here.

Now let’s take a look at how Plan 5 Quarterly is doing. We’re only one month into the current period, but here are the results so far:

Plan 5 Quarterly: November 2013 Progress Report

Nov 1 Open Nov 29 Close % Change
Buffalo Wild Wings (BWLD) 143.28 150.24 +4.86%
Caesarstone (CSTE) 42.31 49.15 +16.17%
Dreamworks Animation (DWA) 34.15 31.86 -6.71%
Illumina (ILMN) 93.48 98.00 +4.84%
Tesla Motors (TSLA) 163.00 127.28 -21.91%
Plan 5 Quarterly: Nov 2013 – Nov 2013 -2.75%
S&P 500 1758.70 1805.81 +2.68%

Plan 5 Quarterly is in the hole so far, and again the blame falls mostly on Tesla. And yet, you may have noticed that Tesla is again included in this month’s Plan 5 Monthly picks. Why would I keep sticking with what is clearly a slowly deflating bubble? Because that isn’t clear at all. In late 2011, for example, Netflix looked like the same kind of fading fad, but now it’s rocketed higher than ever. The challenge, as usual, is to stick with the plan rather than letting our emotions drive rash reactions. The algorithm continues to stick with Tesla, for now. I’ve tried variations that attempt to filter out “bubbles”, and backtesting shows that in the long term performance is a lot worse — it leaves behind those that never recover, but also those that stall a bit before continuing to rise spectacularly. So what I’m going to do is stick with the plan — and for now that means sticking with Tesla.

See you back here in a month. Until then —

Thrive!

Mike Ferrier