inMessment Game – Second Quarter Results 2011

Comparison to Benchmark – The S&P 500 Index

The benchmark I have chosen to compare my results to is the S&P 500 Index. This is a broad index of 500 of the top US companies. Many investors and firms use this index as a general benchmark.

To make my comparison easier I have maintained my inMessment Game portfolio in a Google Finance portfolio as well. This is a little extra effort but I can get the chart shown below from Google and simply check a check box to compare it to the S&P 500 Index.

The blue line is my inMessment Game portfolio. The Red line is the S&P 500 Index. I am glad to see the market rally the last few days of June and bring me back to even for the quarter.

Here is the Year-To-Date chart. I am liking the trend of he blue line starting out the year trailing the red line, but now it is leading. I like using the S&P 500 index as a benchmark. It gives me something to compare my performance to. YTD my inMessment Game portfolio is up over 6%.

So far the inMessment Game portfolio is just doing slightly better than the S&P Index. Over time, I hope that slight improvement will make a big difference.

The Good

It was not a really good quarter. Only 4 of my 13 holding had a positive return.

Nike NKE has been my stellar performer, up 17% in Q2. I bought into NKE in late Dec. 2010 when it was at $85.50. Then I doubled down in March 2011 when the price dropped to $76.96. Now the price is back over $90. NKE was in my Ugly list in Q1.

The next best performer was Rydex S&P MidCap 400 Pure Growth ETF (NYSE:RFG). On May 5th I decided to replace my bond fund, Vanguard Intermediate-Term Bond ETF BIV, with RFG. I am only 39 this year so I do not feel the need to be into bonds at this point. The Rydex MidCap ETF gives me more aggressive exposure to the mid-sized equity market.

The Bad

Range Resources Corp. (RRC) tops my bad list. It is down 3.74% in Q2. BlackRock, Inc. (BLK) and Medtronic, Inc. (MDT) also made the list. These holdings are still doing well over all and I hope they will bounce back in Q3.

iShares MSCI Emerging Markets Indx ETF (EEM) made the bad list again in Q2. In Q1 EEM made the bad list even though it had a positive return of 3.43%. In Q1 the good list was up 7% or more. In Q2 EEM had a negative return of -2.48%.

(Real money comment: the inMessment Game is a simulator where I invest with fantasy dollars. Seeing this down trend in Emerging Markets (EEM) over the last 6 months, I have been directing my regular 401k contributions to the Emerging Markets Index fund in my 401k. The idea is called value averaging. Since Emerging Markets are down, it seemed like a good time to buy some for the long term.)

The Ugly

Two holding make my Ugly list for Q2.

iShares Silver Trust ETF (SLV) tops the list with a negative return of -7.54%. This is accentuated by by the fact that SLV had a huge price swing in April and May. It was up 30% in April and then dropped 40% in May. I am holding on to SLV for now. Over all SLV is up over 18% from when I bought. I only wish I had sold near the end of April.

The other ugly holding for Q2 is Market Vectors-Coal ETF (KOL). It is down -6.03%. I bought into KOL on April 6. My thought was that Coal should see some positive days ahead because of the nuclear issues caused by the earthquake in Japan. If nuclear growth is slowed or halted, then coal should continue to see growth. I only bought a small amount and I have not seen the growth yet. I will keep watching.

Major Market Events

There were no major World events like the Japan earthquake in Q2. Mostly I think the market downturn was due to two reasons. 1) Concern about Sovereign Debt Issues in Greece and other nations 2) Weaker earnings reports from many companies.

There was the LinkedIn (LNKD) IPO and several other popular IPOs in Q2. Mainly in the internet and social networking industry. TheStreet has an article with interesting data on the 10 Best-Performing IPOs of 2011.

One big event for my inMessment Game portfolio was the merger of ProLogis (PLD) and AMB Property Corp. (formerly AMB). In the real world I hope this was not as much as a headache as it has been in my Game portfolio.

Investopedia has not corrected my PLD holding for the merger with AMB. The terms of the merger stated that each original PLD share would be converted to 0.4464 shares of the new PLD stock. At least it is a fairly easy calculation for me since I bought 100 shares of the original PLD back in Dec. of 2010. So, I should now have only 44 shares of PLD but the value should be about the same. I would assume the .64 share fraction should be converted to cash.

Investopedia has not corrected my PLD holding so it looks like I still have 100 shares. Investopedia is showing the new price which is in the $36 range. On June 3, the price was in the $14 range. Investopedia shows my PLD holding with a 154% increase in price. This is fun to look at but it is not real!

Investopedia is not the only site having issues. Google, my site of choice for price lookups, does not show PLD as a valid stock ticker. At least they do not as of July 3, 2011. Yahoo and Morningstar show PLD correctly so I am looking there for now.

In my Full portfolio listing below, I show what I assume to be my “true” holding of 44 shares.

Full inMessment Game Portfolio

Here is the full portfolio as of June 30, 2011. I have categorized the investments in the following way:
Core: Long-term stable investments that will not change often.
Sub-Core: Still long-term but may trade more often.
Opportunity: Long or short-term trading opportunities.

inMessment Game Trade History for Q2 2011

Below is the trade history for my inMessment Game in Q2.

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