A nice run up on CAPS today. Of course whenever small caps do twice as well as the S&P you can expect lots of CAPS players to gain lots of points. Nevertheless I also managed to move up to 97.23 in my score with just over 300 points and just under 60% success rate.
Now the test: Off traipsing around Europe (8 countries, but mostly in the Alps) for seven weeks sans internet, sans cell phone, etc. I'm tempted to sell off a bunch of high fliers (Brazil stocks, for example) before I go, but I'll just leave it be and let her ride. Will I fall off the charts while I'm gone, or do even better once I quit fiddling around with my picks every day?
Back in August; tanned, rested and ready to trade. [more]
I try to identify mega-trends in order to determine which products and services will have accelerating demand leading to accelerating growth for the companies providing same. Then I look for reasonable valuations (e.g. PEG around 1 or less, etc) and management that is actively pursuing sound strategies to capitalize on the opportunity.
I want companies with a low PEG to begin with that I think have their growth rates understated by analysts (analysts obviously want to be conservative when it comes to growth and if a sector has really high growth potential they usually don't give that potential its full weight, just in case).
If I think a sector will outperform I try to limit myself to just a couple top companies - I want to overweight the sector, but not by too much. I'm always looking for companies that fit my criteria but which are not too much like stocks I already have. My two most recent picks: GEF and RSTI both look like good examples. [more]
I joined in Smart Money's little stock market game that just ended after a five week run. You only got to pick from 40 stocks, most of which I'd never heard of. From the 18 whose names I recognized ("'Crocs,' don't they make shoes or something?") I picked 8 that sounded good (no research).
You were allowed to switch stocks regularly but I decided to see how a buy-and-hold strategy would fare (if you dare call five weeks a "hold"!). I made my picks and walked away. I knew I wouldn't win, some active traders would get lucky, just like if enough people roll dice 35 times, someone is going to roll higher than average scores, but I couldn't win that type of game anyway.
Results? I finished 110th out of nearly 1800 players with 195 points (the winner had 283), top 8% or so. It wasn't quite the blind-folded monkey strategy, but close.
Umm, gee... I wonder if there is a lesson in here somewhere? [more]