2010 turned out to be a very satisfactory year, with a fantastic second half to the year. However, like last year I am still kicking myself over some missed opportunities.

RunningCapital finished the year with a return of around 58%. Like last year comfortably beating the major indices. It also means thanks to the magic of compounding that the total return for the site in just two years is a fantastic 211%! Initial capital of £100k has been turned into over £300k, a return that I am very pleased with. It has to be said though its been done with favourable market conditions, the FTSE 250 has more than doubled since its low point in the dark days of November 2008, the FTSE 100 is lagging a bit but is still up more than 70% since its low in March 09.

The winners of 2010…

Polo Resources (POL), Dart Group (DTG), XP Power (XPP) and First Derivatives (FDP) were all very profitable investments that I held through the most of the year. In fact Dart Group & XP Power I still hold and expect more of next year.

The second half of 2010 was so good due to big and quick gains in French Connection (FCCN), Kalahari Minerals (KAH), Renold (RNO) and Renovo (RNVO). These really zoomed up in the last few months. I’m out of Renold for the moment and have reduced my position in French Connection & Kalahari but think these will continue to be winners into the early part of 2011. Renovo could be a big winner in 2011 if it’s key phase III trial is a success.

Now the losers…

Quintain (QED) was the biggest disappointment in 2010, down on the year despite a nice bounce in December. However hope isn’t lost and I’ve recently been increasing my position, I think 2011 could see Quintain’s share price rise considerably given the large discount to NAV and recent appearance of Laxey on the shareholder register.

Soco (SIA) was a massive letdown, even though it finished the year higher than it started. I carried it as a large position throughout 2010 but its extensive drilling campaign was, in the main, a failure and the share price is well off its highs. The downside was well protected though and that is what assessing risk/reward is all about, I’m looking to see if there is some corporate takeover action here in the new year.

West China Cement (WCC) was one position I got very wrong, going too long too early on its anticipated HK listing and selling out at just the wrong times. It went on to more than double from where I sold, ouch.

Other losing decisions were not getting involved enough in the small cap gold & oil sectors which had a bumper year, I didn’t expect such large moves in so many shares. I’m sceptical about getting involved going forward giving the large amount of hot air that appears to be in those sectors right now. We shall see.

Lets hope for larger winners & smaller losses on 2011, right now I’m feeling that it will be a trickier year than the previous two given the headwinds of rising taxes and increasing living costs in the year ahead.