by Adam Samuels

Pop the cork. Champagne all around. Portfolio made money in 2003. That’s not so remarkable except it’s the first time since our all-tech portfolio of 1999, when we were up about 167 percent. Since those halcyon days, it’s been three long years of losing. During that time, the end of the year wrap up always meant apologies to our readers, we’ll do better next year, etc. It’s amazing how smart we are all of a sudden with the Dow cruising past 10,000.

Looking at last year’s Portfolio articles, we started, as usual, with hope in our hearts. Once again, things began to look bleak early. By March, we were convinced we should just get out of equities altogether. In fact, a comment by our financial professional of that month, David Rolfe, chief investment officer of Wedgwood Partners, was, “We are now at a point where nobody wants to talk about stocks.” That was a bullish sign. Things began to turn around. By April, the first week of the war in Iraq brought a stock rally, as well as a drop in oil and bond prices. Ken Crawford of Argent Capital Management said at that time, “I think investors are putting money back into equities and selling bonds.” That statement proved to be prescient. Since that April, the value of Portfolio improved by more than 32.4 percent, which is significantly better than the S&P 500 did this year.

Overall, Portfolio owned 30 stocks this year. Two we bought twice – General Dynamics, which we’re glad we bought the second time in May because it made a big move late in the year — and Goodyear Tire, which we’re not so glad about since it languished. The best stock we owned at the end of the year was MBIA (MBI), the municipal bond insurance company. That stock was up more than 50 percent by the end of the year. Honorable mention in that category goes to BJ Wholesale, which improved by more than 47 percent. A couple of stocks we wish we still owned are Intel (INTC), which almost doubled since we bought it in February and Aetna (AET) which was up more than 55 percent since we bought it a year ago. Other winners we let get away were Energizer (ENR), Berkshire Hathaway B (BRKb), British Petroleum (BP), Danaher (DHR), and John Deere (DHR), all of which were up more than 25 percent since we bought them.

The good news is: it’s all in fun. We can look back with no regrets, except maybe that we didn’t buy the stocks for ourselves. Portfolio will return in February with all-new stocks and new advice from our financial experts.

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