Use access key #2 to skip to page content.

iamnik77 (95.48)

A Question for all CAPS All Stars

Recs

14

March 17, 2009 – Comments (19)

What do you do differently than the majority of CAPS players that makes you an all star? I'm interested in your stock selection approaches and your approach to timing your buying and selling (or shorting). I will post a reply as well but don't want to steal anyone's thunder so will wait to see who wishes to reply.

19 Comments – Post Your Own

#1) On March 17, 2009 at 11:20 AM, StatsGeek (29.35) wrote:

1) Find stocks that I strongly believe will outperform or underperform the market,

2) Wait for it....

3) Wait for it....

4) Red thumb your conviction sells ONLY when they are trading up; Green thumb your conviction buys ONLY when they are trading down.

Report this comment
#2) On March 17, 2009 at 11:25 AM, EverydayInvestor (< 20) wrote:

I only make picks now when I am absolutely sure I am right ... don't make many picks nowadays.

Report this comment
#3) On March 17, 2009 at 11:28 AM, FreundInvesting (29.53) wrote:

Short crappy stocks, never end a pick that's below +5 points.

Report this comment
#4) On March 17, 2009 at 11:30 AM, biotech4ever (21.21) wrote:

If a dumbass like me can become an Allstar, then anyone can do it. IMHO, the minimum for an Allstar should not be 80, it should be 99.

To summarize, go green on good companies, red on bad :)

Report this comment
#5) On March 17, 2009 at 11:53 AM, Schmacko (44.40) wrote:

I do a magic all-star ceremonial dance everynight before I go to bed and I put my same pair of lucky underwear on every morning to help keep the good times rolling. 

Report this comment
#6) On March 17, 2009 at 11:56 AM, EverydayInvestor (< 20) wrote:

I second Freundinvesting ... play the system. Also, I never close losing picks unless I am 100% sure that they will never go green again, because I am locking in a hit to accuracy if I do that.

Report this comment
#7) On March 17, 2009 at 12:03 PM, unswift (84.23) wrote:

I am a long and green dumbass

Report this comment
#8) On March 17, 2009 at 12:04 PM, edwjm (99.87) wrote:

Biotech4ever has a point.  The threshold for being an all-star is way too low.  If not 99, why not at least 97 or 98?

Report this comment
#9) On March 17, 2009 at 12:04 PM, Tastylunch (29.40) wrote:

You also want to make picks on volatile stocks usually, if the stock  just tracks the S&P you'll never get to +5

unless of course your pick is just a market call where you know the price of the security will remain stable but you are epxecting the makrest tself to move in a big way.

Still the point remains, you want something that will not mirror the market in either case.

Report this comment
#10) On March 17, 2009 at 12:07 PM, synergize (30.03) wrote:

you can find outperform picks using multiple technical indicators here at synergeticstocks.com.

there are some pre-defined scans such as Bullish Growth, Bullish Value, Bullish Cheap, etc.

Report this comment
#11) On March 17, 2009 at 12:15 PM, cclogic77 (25.70) wrote:

1) Play the accuracy game (don't close picks below +5 score).

2) Find companies with strong fundamentals in industries that you think will do well in the upcoming months/year (depending on your timeframe).

3) Short crappy companies with bad earnings and high debt (and ones in underperforming markets, like the current real estate and financial sectors).

4) Short Ultras and 3x ETFs when the S&P 500 is trending up, and green thumb them as the S&P 500 tumbles (but make sure you don't miss the boat, or you'll be screwed on the bounce/dip).

As a closing note, CAPs is highly gameable, and not necessarily a true indicator of stock trading ability. But as EverdayInvestor warned us a while back, we shouldn't aspire to be traders anyways. I'll let you know in 5 years after I've graduated college and actually started making real money if I was able to listen to his advice =)

Report this comment
#12) On March 17, 2009 at 12:16 PM, chk999 (99.97) wrote:

Be skeptical.

Report this comment
#13) On March 17, 2009 at 12:42 PM, portefeuille (99.66) wrote:

and do not forget to look for contra-indicators, have a look at the new-low-lists and - something I find almost somewhat enjoyable - look at other persons calls/picks/statements on a stock and then try to "get in at a better price" (stockpickr tracks some, scroll through some caps-player-lists, ...).

Report this comment
#14) On March 17, 2009 at 12:49 PM, icesword2 (52.56) wrote:

I built up my accuracy score by red-thumbing all the long and short 3x tickers I could find, and then closing/re-opening ones that reach +5.  Since I'm only closing the winners, the losers don't affect accuracy much, and I'm pretty much covered if the market moves in either direction.  My score shot up a TON when the market started going up, since all those red thumbs add up to a big green thumb for SPY.  I don't expect my score to stay positive for the rest of the week, but it was fun to be an all-star for a day or two!

Report this comment
#15) On March 17, 2009 at 2:27 PM, charlesblazer (52.34) wrote:

I game the system by:

1) never closing losing picks.

2) only closing winning picks if:

a) the pick is up by +6 or more (I've been burned by closing a pick at +5.5 or something, because market fluctuations during the 20 mins it takes to close the pick can cause the pick to go under +5)

b) both the pick and the market are down, but the market is down more than the pick, resulting in a positive score (if it's a red thumb, then only if the pick is down more than the market)

c) the pick is not due for a dividend that would be to your benefit in the very near future

d) and it's not a crazy day with lots of volatility (I don't have time to watch CAPS constantly, and wild, short-term fluctuations in the 20 mins it takes to close a pick can cost a lot of points unnecessarily)

or e) if something fundamental about the pick has changed (rare)

3) re-up picks at lower start prices, after closing them to bank the points (I only do this now if the pick is up around +15... don't have time to constantly watch and re-up +6's)

4) make good sector bets (good luck with that)

I've also decided to stick with green thumbs, because when reds go bad, they can go very bad.  The upside to green thumbs is also theoretically higher.

I also don't touch bull/bear ETFs.  I can't time the market.

Report this comment
#16) On March 17, 2009 at 3:51 PM, iamnik77 (95.48) wrote:

1) Understand the value investing approach of buying companies for less than their intrinsic value.

2) Understand that trees don't grow to the sky. A mega cap company will not increase earnings by tenfold in ten years so don't expect its stock to increase tenfold in value in ten years. Have more realistic expectations for large cap stocks. In CAPS, if your megacap pick outperforms the market by 15 points in a week, you probably won't squeeze any more gains out of that pick.Have an idea before hand of how many points a pick is capable of generating.

3) Understand expected value. With expected value, you don't have to be right most of the time to win. Also, you can be right most of the time and still lose.Some picks offer terrible expected value which means they have tremendous downside with questionable upside. These may be good red thumb candidates.

4) Trust your eyes more than what other people tell you. Did your favorite stock get downgraded and shed 5% of its share price today? Do you still like their widgets? Do you and all of your friends and family still insist on using those widgets? Do the company's fundamentals still look good? Then, guess what? The analyst who downgraded the stock was wrong!

5) Recycle your ended picks. Since we can't dollar cost average in CAPS, we compensate by selling a stock when its price goes too high for the market and getting back in when its price swings too low. Sometimes the best company to buy is one you already own.

Report this comment
#17) On March 17, 2009 at 11:04 PM, Gaugamela (87.55) wrote:

There are a few ways to do it....

 1. Give thumbs down to a bunch of PK penny stocks that everyone knows are junk and that you aren't able to short in real life.

 2. Give thumbs up to stocks that are good values because they're beaten down and let them ride.

 

Report this comment
#18) On March 17, 2009 at 11:26 PM, portefeuille (99.66) wrote:

... following advice 1 will lead you straight into top10 territory ...

Report this comment
#19) On March 17, 2009 at 11:32 PM, PrestonCheek (32.89) wrote:

Biotech, everything you said. :)

Report this comment

Featured Broker Partners


Advertisement