2008/09 Performance

2008/09 performance

All Ordinaries Financial Year 2008-09


My Margin Share trading activities in 2008/9 returned a gross 5.7 % positive return. After expenses were deducted which were mainly interest, fees and computer depreciation my return for the year was slightly negative. In all a pleasing result considering the disastrous reduction in value that has happened.

The all ordinaries fell from 5261 on 1 July 08 to 3948 on 30 June 2009; a fall of 24.95 %. It requires a further increase of 33 % to return to the 1 July 08 level. The year low has reached intraday 9 March 09 at 3052, a fall from 1 July 08 of 42 %. At the years end we are 896 points above the low or 22.7 %.

As an exercise I looked at my holdings on 1 July 2008 and compared the pricing then and 30 June 2009. This would have been a hold and do nothing strategy. This would have returned a loss of 39 % in value for the full year and well over 52 % at the low point in March. This would have been unsustainable. Similarly I looked at the shares I now hold and compared their current prices to the 1 July 2008 prices and they were 30 % higher in July 2008 than now. So the over 200 trades I have made in the year has allowed me to maintain my capital position.

The year was actually in two halves with extreme pressure of falling prices in the first half requiring a a significant selling down of risk while the second half has seen a repositioning for growth. The capital raisings were extremely profitable. Commonwealth Bank placement was under $ 25 and has since risen to $ 39. Westpac capital raising was almost as rewarding at a placement price under $ 16 now at over $ 20. Also the Asciano collapse of price allowed an opportunity to buy a significant number of shares at under $ 0.50 which have since traded up to $1.80 and created a windfall profit. My largest losing positions were in SUN, UXC and BBI. The other area of note was the use of MINI Warrants both long and short. The hedging of positions in such volatile times is prudent and I have found MINI warrants to a very useful product and better than Options and CFD's.

Unfortunately, my allocated pension did not perform as well. For the year my pension returned a loss of 5.52 % . This meant that my net financial position for the year after I include my expenditure both business and personal saw a reduction in my net wealth of 7.26 %.