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rexlove (98.98)

A great example of how horrible the CAPS scoring system is - NTDOF.PK

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November 25, 2009 – Comments (12) | RELATED TICKERS: NTDOF.PK

This very thinly traded stock had a blip in the stock price yesterday into today. Apparently some stock traded at $25 yesterday. Today it's back at $250. People who were lucky enough to spot this anomaly and pick it up yesterday made an instant 900 CAPS points today. One of our caps leaders - BravoBevo was one such person.

When are the CAPS moderators going to do something about this? A while back there was talk of putting a minimum trading volume limit on all caps picks. Or eliminating OTC and pink sheet stocks from the selection process. But nothing ever happened. When is TMF going to correct this glaring problem?????? 

12 Comments – Post Your Own

#1) On November 25, 2009 at 4:33 PM, USNHR (98.92) wrote:

Upset that you missed out on a few hundred easy cap points huh?

You can't please everyone all of the time. I see people argue all the time that minimums should be removed from CAPS so that penny stocks can be traded, however it is set up the way it is... sometimes you can take advantage and sometimes you loose out on a ten bagger because you couldn't select it until it hit $1.50.

I play CAPS for fun and to learn a bit more about investing and the stock market. I don't think TMF needs to correct "this glaring problem".

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#2) On November 25, 2009 at 4:41 PM, BravoBevo (99.98) wrote:

I agree with rexlove. Thinly traded (highly illiquid) securities like these don't always present actual trading opportunities for you and me in the real stock market. If they can be weeded out, then everyone's use of this CAPS game will be better.

Yesterday (mid-afternoon?) I noticed the significant price decline without finding any obvious business reason. I wanted to see if the CAPS moderators would fix it, but as the day went along and the market was coming to a close I figured to go ahead and get in (as many other Fools already had) so as to not be at a disadvantage.

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#3) On November 25, 2009 at 5:25 PM, rexlove (98.98) wrote:

Just so you know BravoBevo - this wasn't a knock against you. If I had noticed the same dip I probably would have jumped on it too. I was just using you as an example. Just trying to make this game a little more realistic.

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#4) On November 25, 2009 at 5:33 PM, zCreator (< 20) wrote:

I would say BravoBevo deserves his points. It shows a lot of dedication to be sifting through all those stocks everyday, dips and all. And as you pointed out yourself, if you had been aware of the dip yourself, you probably would have jumped on to it too. Also CAPS is just a game, and games all have different strategies. In real life trading I trade very differently from my CAPS. So just consider it a nice reference. :)

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#5) On November 25, 2009 at 8:41 PM, portefeuille (99.73) wrote:

what is really funny is that no one has ever given a single good reason for not implementing a volume limit. and the discussion is always ended by the promise of implementing a volume limit that subsequently never comes.

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#6) On November 25, 2009 at 8:43 PM, portefeuille (99.73) wrote:

the same holds true for the dicussions on introducing non-U.S. stock exchanges.

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#7) On November 25, 2009 at 9:22 PM, BravoBevo (99.98) wrote:

rexlove, I didn't take it as a knock at all.  In fact, I'm glad that you did use me as an example because at least it got the moderators' attention ... which points out another flaw ... 

From time to time the moderators will make adjustments that skew the conditions from when a decision was made to green-thumb or red-thumb or exit a pick.  Often they make the changes without our knowing what really happened other than a sudden change to our cumulative score or cumulative accuracy.  

If you are like me (in that I don't keep track of losed-out picks), than you and I are clueless on what the moderators actually did that suddenly changed everything.  Case in point is the change, just now, of NTDOF from $25 to $250 ... Why wouldn't it be the last price BEFORE today's price?  Look at the NTDOF page and the market clearly recognizes that the pick went up $1.22/share (+0.49%) to end at $250. In this case everyone who picked NTDOF yesterday is saddled with today's price (which didn't occur until today) and both yesterday's and today's S&P gain.

The best solution is that when moderators use their power to produce a revisionist history, then should (1) send the affected parties an alert or an email and (2) each of the affected parties should have a reasonable time (say 1 business day) to accept or reject the change - if the change is rejected then the entire transaction is nullified in its entirety. In the NTDOF example I'm sure that there are plenty of Fools who picked up NTDOF at $25 but who never would have put on this trade at $248 or $250. Moderator, please give us the option to OPT OUT of the transaction when you change the situation on us because the decisions made at the time can never be fully replicated.

 

 

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#8) On November 25, 2009 at 9:26 PM, BravoBevo (99.98) wrote:

oops .. pardon my typos in the prior comment (#7)

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#9) On November 25, 2009 at 11:31 PM, Tastylunch (30.08) wrote:

+1 to Bravo's comment #7

 doesn't affectme very often, but might as well keep the game as honest as possible.

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#10) On November 25, 2009 at 11:36 PM, rexlove (98.98) wrote:

Bravobevo - I just noticed the change. Interesting how the moderators just decided to "flip the switch" on this stock. A whole bunch of people just lost out on 900 caps points. The moderators seem to change the rules as they see fit on individual stocks. Not entirely fair.

Come on TMF - how bout just leveling the playing field and implementing a volume minimum on all CAPS picks???

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#11) On November 26, 2009 at 12:19 AM, hall9999 (99.66) wrote:

  In this particular case the reported $25 price may be an error of TMF's data feed rather than an actual trade.  According to the chart on the ticker page the stock has shown this kind of dip and spike several times this year but I can't find any evidence on other finance sites of this kind of activity although a few of them do report the $25 price yesterday.

  In any case, the rule for determining the start price for you picks is that you get the NEXT traded price 20 minutes after you entered the pick.  The next traded price was $250 the following day so that is what the picks should start at.  For some reason, CAPS sometimes (but not always) activates these picks anyway within 20 minutes or at market close even when the stock doesn't trade again that day.

 Just out of curiosity, how many people entered a limit order for this pick?  At what price?

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#12) On November 27, 2009 at 10:11 AM, Blakjak87 (40.94) wrote:

Bank error in your favor...but you owe the bank back the money?

Whoops!

Lost my nifty 900 CAPS point, and I'm bummed. After all, I was the first person to enter an outperform pick on the big dip.

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