Slogging through the tricky market of 2001, when Silicon Valley was imploding and stock investors were no longer printing their own profits, our pitch-perfect fictional investor still managed to keep things solidly in the black. The top performer of the year ended up being NVIDIA (NASDAQ: NVDA), manufacturer of graphics processors for use in video cards, computers, and other technology. The stock went public at the end of the previous millennium, in late January 1999. The $836,704 in play after the Laboratory Corp. (NYSE: LH) trade was rolled over into NVDA, acquiring 101,418 shares at an entry price of $8.25 on the first trading day of the year. (Note: Clearly as this exercise continues, were it a real-life trading environment, liquidity concerns could come into play. For the sake of this game, we'll ignore it.). The stock embarked upon a nice rally through early June, stalled throughout the summer and early fall, and took off again at the beginning of November for a strong final two months of the year.
By the time the ball dropped on New Year's Eve, NVIDIA was worth $33.45, a 305% advance. After five immensely profitable years, our portfolio had grown to $3,392,432.
Next: Step 6: MEMC Electronic Materials (WFR), 2002
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.
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