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anticitrademix (< 20)

New anticitrade portfolio with 50% underperforms and 50% outperforms. (Thanks Ultracontrarian)

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November 01, 2009 – Comments (11) | RELATED TICKERS: SYUT , PODD

Based on the beating my portfolio took this last week, and the recommendation by ultracontrarian, I updated my model to try and pick both outperform and underperform calls.  The methodology for picking the underperforms is based on the same analysis I do for picking my outperform.  While my green thumb picks are based on 10 indicators, my red thumbs are actually based on  14 indicators.  Because caps won't let me pick all the stocks I would like, I will record the top recommended red thumb picks for future reference.

Before I bore you with the details of what exactly that score is based on, I would like to wait and see if it actually works.

Underperform score of 14:

SYUT

PODD

Underperform score of 13:

 

ELOY MIPI AMSC CAVM CLDA PANL CDZI DXCM RMTI MLP HOV FCEL SMI ARRY AWIN POCC

Underperform score of 12:

 

LORL PTSI CVTI PGTI SHI GRIF CEA LINK PPTV DBLEP CHRT ZNH MBLX CAR NGSX EXEL HALO EVTC CRME MVIS NEPT EDGR PRAN ENA APPA VRTX AUXL DNDN EMITF MTH THRX SVNT CLNE OPTR AXL ARNA EXAS KOG IVAN NBIX CTT VHC OMEX VLNC TLR AGEN CTIC EPCT PCYC AIS

Underperform score of 11:

 

CGX PRSC UNCA CITP PKOH CALD CYBI UFS CVCO SNE ULTI AQQ SKY SUI SFSF CTB RBCN ELON RDEA RSC WGO GCGC CBG CKEC HTZ CVO BRKS CCO IMGN NSPH CBMX CLWR BHS BRT GMTN SNIC QADI CHRS BZH EK REFR HOOK CYTX DYAX TPGI SCON IBAS OHB OCLS MBND XPL ESLR CYCCP TMS SYI DIET PWAV VSCI ALTI EMKR EPG DCGN AUSA FCX BWA CCI MDVN HGSI RMBS TRW KEP VQ ITMN SWSI IMAX VNDA BEXP URI PLX TLB GTXI NKTR REXX F CZZ OREX SIGA OSIR SWC MNOV INCY HTCH DAN UCTT LPX HEV TUTR MGPI HL SBGI SOL CMRO PLA DMC PCYO FXEN PLM GENT ROYL IDIX OPK SATC CORT PATK CRC JAV JEN DPTR RZ NOEC INO WAVX IG STSI ENMD SIRI HYTM WZE EGT IOC WY HMIN TRGT PALM DCTH GSS CGEN TIV CVM QBC RPRX CXM DARA QGP ANSV

 

11 Comments – Post Your Own

#1) On November 01, 2009 at 4:21 PM, UltraContrarian (99.81) wrote:

Looks like a great place to start research.  I'm currently short HOV, CAR, AXL, VHC and PALM and have red thumbed quite a few others.

A little surprised to see SNE, WY and FCX on the list but at least it doesn't have JAG like anticitradeshort.

I expect this to beat anticitrade (long) over the next year but with higher volatility as it has so many more speculative/develoopment phase companies.

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#2) On November 01, 2009 at 5:52 PM, portefeuille (99.96) wrote:

I disagree with quite a few of those calls. Some of the stocks from those lists that I like are ARRY, CLDA, DNDN, FCX, OMEX, PANL.

 

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#3) On November 01, 2009 at 6:39 PM, fmahnke (97.41) wrote:

I wouldn't short CLNE or CRME. as they have big upside potential

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#4) On November 01, 2009 at 6:44 PM, portefeuille (99.96) wrote:

oh, I overlooked CRME. It is one of my "current favourites" (see comment #7 here).

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#5) On November 01, 2009 at 7:37 PM, anticitrademix (< 20) wrote:

I agree that some of those picks may not be the best, however if I screened them based on my own speculation (and the speculation of others) I would no longer be conducted a fair test of my system. 

However, let me talk about CRME as several highly credible users have commented on it.

Here are the 12 reasons I think it will underperform (or be a good candidate to balance out a portfolio):

5 of the 12 points come from things I consider to be hazerdous:

High Beta, Negative Earnings, High Investment In PPE and NWE,  High short interest ratio (one of the 5 items was a false positive, I have corrected the formula to remove this problem in the future)

Then from 7 of my ways of calculating a stock price for this stock yielded values from .2 up to 1.   In fact, the only things that this stock DOESN'T do poorly (according to my system) is: they fall in the low half of their historical prices and their financial statements are resonably current.

It looks like this stock is for a pharmaceutical company.  So I agree that the upside for this stock could be tremendous.  I wonder if there is an automated way to correct for this type of investment......

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#6) On November 01, 2009 at 7:52 PM, anticitrademix (< 20) wrote:

As I think about it more...  I could easily automate it so it:

a)  Eliminates all biotech companies

b)  Eliminates any company that has never yielded any sizeable sells (with the assumption that if/when the company finally produces whatever it's in the business to produce it will be amazing)

c)  Eliminate any company that shows a strong ramp up of PPE as a % of sales since it may suggest that this company is preparing for future growth.

Any other idea?  Do you like any of those options? 

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#7) On November 01, 2009 at 9:31 PM, UltraContrarian (99.81) wrote:

If you only include 1 to 3 star stocks that would probably improve the performance quite a bit and screen out some of the good speculative stocks.  Of course it would come at the expense of introducing outside subjective sources.

I would rather see how the screen works before messing with it.  If it does poorly in a particular sector over several months then think about how to revamp it.  Anticitradeshort has positive points from red thumbing pharma/biotech so far but negative points on raw materials, that may turn out to be a bigger issue.

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#8) On November 01, 2009 at 9:55 PM, portefeuille (99.96) wrote:

Anticitradeshort has positive points from red thumbing pharma/biotech so far ...

That is mainly a benchmark issue. Biotech stocks for example have underperformed ("as a group") for the period starting when those calls were made and ending on 09/10/30.

 

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#9) On November 01, 2009 at 9:57 PM, UltraContrarian (99.81) wrote:

You could also treat past R&D costs as balance sheet assets.  That could help correct any unreasonable bias against development phase companies.

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#10) On November 01, 2009 at 10:13 PM, UltraContrarian (99.81) wrote:

Yes, biotech has underperformed as a group, and raw materials and technology have outperformed.  Now if the same screen is run again, it will select fewer baby biotechs and more raw materials and tech to short.  I don't think it's fair to dismiss performance in any sector as just a benchmark issue.

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#11) On November 02, 2009 at 9:35 AM, anticitrademix2 (< 20) wrote:

I like the idea of using the "collective intelligence" of caps to eliminate some of the red thumb picks.  I created an alternative portfolio where none of the red thumbs have 4 or 5 stars.  (This only eliminated 12% of the red thumbs my program generated).  It will be interesting to see how these 2 portfolios do against each other.

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