My best and worst stocks in 2011

My best and worst stocks in 2011

Below are the top 8 best performing stocks I owned for the entire year in 2011 and their performance.

MAKO Surgical Corp (MAKO) +65.64%
Chipotle Mexican Grill (CMG) +58.82%
Buffalo Wild Wings (BWLD) +53.96%
Starbucks (SBUX) +43.20%
United Health Group (UNH) +40.35%
Panera Bread Company (PNRA) +38.80%
Whole Foods Market (WFM) +37.54%
Green Mountain Coffee Roasters (GMCR) +36.49%

It definitely looks like restaurants, food, and medical care was in for 2011 looking at my best performing stocks. Also noticed that this performance is quite a bit different than last year where I had 3 stocks that were up at least 100%. Overall though I feel very good about having these good performers last year and it shows you that despite the market being relatively flat if you find the right companies you can make significant performance gains no matter what the market is doing. Looking at these stocks I really feel good about the whole group long term and while some like MAKO, GMCR, and CMG may have some pretty lofty valuations currently I think they are all good long term companies that are pretty well run. MAKO and GMCR are probably the riskiest of the bunch.

Netflix (NFLX) -60.56%
Dolby Digital (DLB) -54.26%
Exelixis Corporation (EXEL) -42.33%
Infinera Corp (INFN) -39.21%
Southern Copper Corporation (SCCO) -38.08%
PACCAR Inc (PCAR) -34.65%

And here is the flip side – top performer of 2010 Netflix was absolutely crushed in 2011 and did some serious damage to my investment performance in 2011. Another big dagger for me was the implosion of Dolby Digital that I had always felt was one of the titans in my portfolio and not a really risky stock, Netflix I knew had some room to fall, but Dolby caught me by surprise. The main reason for Dolby’s fall this last year was that it looks like Microsoft is going away from using Dolby technology in Windows 8 which is currently a good chunk of their licensing revenue.

Netflix on the other hand was forced to make some pretty strategic decisions this last year to compete in the streaming arena long term and in the process did about as poor of job as possible making this transition palatable for their customers. It’s almost like Reed Hastings was abducted or lost his mind or was shorting his own company and spent about 2 months doing everything possible to completely tick off an alienate his customer base which as we have found out is not good for business.

Long term though assuming Reed has not gone completely insane I still like Netflix’s chances though their recent actions have given me a much large pause for concern – Netflix’s magic was all about making their customers experience a seamless and enjoyable one and they have taken a number of actions recently that has gone completely against that – hopefully they learned their lesson. Netflix and Dolby were my two largest stock holding at the end of 2010 and still represent a large component of my portfolio.

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