Chasing Value™: 2009 Results Crushed the S&P 500

However, I hope the hibernating bears got a good rest, because they walked away from piles of cash in 2009 and should be grumpy about it. I spent the year pounding the drum, trying to alert petrified investors that the market was over-sold and going up -- including calling the bottom on March 9 (Nostradamus Was a Punk! Have We Reached Bottom?) and having the audacity to post only two days later: Is the Stock Market Spring-Loaded? Could It Move 3,000 Points Higher Now?

This is the final review of my 2009 stock picks through December 30 based on last December's Chasing Value: Nine Picks for 2009 -- APC, GE, ISRG, WFC and more. The 2009 picks crushed the index comparisons --a very rewarding experience after publicly eating humble pie last year. The 2009 big winner, besting the S&P by almost 500% -- Intuitive Surgical Inc (ISRG).

Of my 2009 picks, seven out of the nine stocks made substantial gains and four of the winners went into orbit. Wells Fargo & Co. (WFC), the biggest loser, was down, but not too big.

Seven of the original nine stocks paid a dividend. The average yield for the nine stocks was 4.82% when the year started. However, during the first quarter AAUKY stopped paying a dividend and GE and WFC cut their dividends substantially, reducing the average payout to 3.31%, still higher than the index.

In previous yearly recommendations, I included both stocks that I owned and did not own. For 2009, however, I pledged to own all of them -- and I stuck with them. I was a buyer throughout the turbulence and benefited by capitalizing on others' fears.

Review Based on December 30 Closing Price:

The average change ended positively, gaining 48.29%, but adding the dividend of 3.31% raises the total return to an even 52% for the year -- a spectacular gain that beats the DJIA, S&P, NASDAQ and most fund managers.

1. American Eagle Outfitters (AEO) improved dramatically from $9.13 to $16.91 for a huge 85.21% gain.
2. Anadarko Petroleum (APC) went from $37.95 to $63.54 for a very impressive 67.53% gain.
3. Anglo American ADR (AAUKY) began at $11.37 and increased to $21.50 for a staggering 89.09% gain.
4. Annaly Capital Management (NLY) started at $15.29 going to $17.57 for a 14.91% gain.
5. Diageo plc (DEO) was $55.65 and rose to $69.66 for a 25.18% gain.
6. EZCorp Inc. (EZPW) slipped from $14.81 to $17.26 for a 16.5% gain.
7. General Electric Company (GE) was initiated at $15.82 compressed to $15.35 for a 2.97% loss.
8. Intuitive Surgical Inc (ISRG) was $124.34 but rocketed up to $305.94 for a mind boggling 146% gain.
9. Wells Fargo & Company (WFC) began at $28.80 and still lagged behind $26.82 for a 6.87% loss.

Review of the Three Major Indices:

All three showed strong gains but only the NASDAQ made back the losses of 2008. Adding a 2.4% average yield to the primary benchmark, S&P 500 index lifts it to a 28.87% gain. I did not reduce this yield to account for dividend cuts made by many companies, as I did in the yield for my picks.

• The Dow Jones Industrial Average (DJIA) rose from 8,668.39 to10,548.51 for a gain of 21.69%.
• The NASDAQ Composite sprang from 1,550.70 to 2,291.28 for a sharp gain of 47.76%.
• The S & P 500 Index appreciated from 890.64 to 1,126.42 for a large gain of 26.47%.

Review Based on My Actual Cost After Trading During the Year:

The average change ended positively, gaining a dramatic 70.61%, but adding the dividend of 3.31% totaled 73.92%, a welcome gain, beating the DJIA, S&P, and the NASDAQ, which did very well.

1. American Eagle Outfitters (AEO) improved dramatically from $8.99 to $16.91 for a huge 88.1% gain.
2. Anadarko Petroleum (APC) went from $34.00 to $63.54 for a very impressive 86.88% gain.
3. Anglo American ADR (AAUKY) began at $9.80 and increased to $21.50 for a staggering 119.39% gain.
4. Annaly Capital Management ( NLY) started at $15.43 going to $17.57 for a 13.87% gain.
5. Diageo plc (DEO) was $49.48 and rose to $69.66 for a 40.78% gain.
6. EZCorp Inc. (EZPW) slipped from $11.80 to $17.26 for a 46.27% gain.
7. General Electric Company (GE) was initiated at $15.25 compressed to $15.35 for a 1.0% loss.
8. Intuitive Surgical Inc (ISRG) was $119.27 but rocketed up to $305.94 for a mind-boggling 186.67% gain.
9. Wells Fargo & Company (WFC) began at $15.73 and still lagged behind $26.82 for a 70.5% loss.

The 2009 picks performed unusually well, returning 52% and besting the S&P 500 28.87% return by 23.13%. My actual results were higher still, just shy of 74%. If I included my options trading for 2009, the results were so astonishing readers would not believe it without seeing the details and that would give away too many secrets. Still, the returns are impressive enough. During this year I have written about "selling to open" put options (naked puts) to give readers some insight into one of my strategies. This is an opportunity not available to most investors and it has a high level of risk.

If you want real long-term peace of mind, read Where Should Granny Put $50,000? and the last update, Chasing Value: Granny Said, 'It Has Turned into One Big Casino.'

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value™ and Serious Money. Disclosure: I own shares of all nine stocks as indicated.