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Teacherman1 (57.58)

A Strategy Guaranteed to Raise your Caps Score

Recs

18

March 15, 2012 – Comments (28) | RELATED TICKERS: DCIX , AXAS , FCEL

Don't mean this to sound like "sour grapes", but after noticing a red thumb on a stock that I own, which is up over 100% for me in real life, and at its 11 month high, I went to take a look at the poster's CAPS page to see what their "track record" has been.

Since they had a very high score, I thought it would be in my own best interest to see if I could figure out why they red thumbed it.

In looking at the overall picks, a pattern soon emerged, which is really very simple. Red thumb all stocks which have one star in CAPS.

My curiosity piqued, I started to look at others with very high scores (not all high score holders of course), and saw the same pattern repeated over and over.

Now I could be wrong, and they may be shorting these picks in real life, but some how, I just don't think they are.

There is nothing wrong with red thumbing picks, and after all, CAPS is just a game, as is often stated, but just wanted to give a "heads up" to any new players who might see very high scores, and assume that any pitch they see popping up is one they should follow, without further investigation.

Good luck to all "red thumbers" and all "green thumbers", and all who split them down the middle.

This is not meant to belittle or demean anyone in CAPS, but for some of you who may be struggling to exchange the "beanie" for a "jester's cap", here is a way to build it up; "bank" the points, close them out, then keep the ones you really want and proudly proclaim to your friends and family that you are a "super star" in Motley Fool CAPS.

FOOL On and have a great time in the world of investing.

Just in case this sounds a little harsh, this is "tounge in cheek".

28 Comments – Post Your Own

#1) On March 15, 2012 at 6:54 PM, zzlangerhans (99.78) wrote:

Fastest way to shrink your brokerage account: buy stocks based on the green thumbs of top ten players.

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#2) On March 15, 2012 at 9:31 PM, HarryCarysGhost (99.69) wrote:

and proudly proclaim to your friends and family that you are a "super star" in Motley Fool CAPS

LOL, I'll have to try that at the next gathering,

Although I suspect the results would be-

I'm peppered with empty beer cans, and taunts of get the f*ck outta here Harry, and grab me another beer!

Just red thumbed both FAZ, and FAS since eventually I'll be right.

Note to new investors lots of Caps players place the green checkmark next to their real life investments.Of couse this does not account for DCA or what they actually paid for said equity, it at least gives you an idea of how someone feels about a stock.

 Otherwise yea it's just a game:)

Cheers.

(Full Disclosure, the author of this post has been trying to break into top 100 Fool for about a year now)

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#3) On March 15, 2012 at 10:42 PM, EnigmaDude (93.40) wrote:

Statistically speaking, of course you are correct.  But what you implied without really saying (and which zz confirmed) is that not all 1-star stocks are dogs just like not all 5-star stocks are winners.  I made the rookie mistake of investing real $$ in a 5-star stock that had 0 red thumbs and a large number of "all-stars" who had given it the green thumb at the time.  I did some quick due diligence and thought the numbers looked good. I sold my position at a small loss when I realized that it was a mistake.  That stock, LPH, is now a 2-star stock just a year later.

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#4) On March 16, 2012 at 1:20 AM, ikkyu2 (99.26) wrote:

Yep, red-thumbing unshortable names is how all the score leaders got there.  I have one or two like that in my history but for the most part try to stick to trades that I could actually carry out in my real world brokerage account.

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#5) On March 16, 2012 at 2:39 AM, portefeuille (99.66) wrote:

"bank" the points, close them out, then keep the ones you really want and proudly proclaim to your friends and family that you are a "super star" in Motley Fool CAPS.

No, please show some pride and join players like zzlangerhans, vanamonde and Ies portefeuilles.

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vanamonde says:

I have self-regulated away from all the ETFs and unshortable .ob/pk stocks. Let’s see how long before the unfortunate onslaught of these in CAPS will take me from top 100.

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(from here -> profile)

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#6) On March 16, 2012 at 9:41 AM, Teacherman1 (57.58) wrote:

zzlangerhans

You are likely correct, but I don't see a lot of green thumbs in the top 10.:)

Harry

You are getting there, but I see you made the mistake of red thumbing some that had more than one star.:)

EnigmaDude

You are absolutely correct. Always, always, always do your own DD. Since I am up over 100% in real life on a one star stock, I defenitely do not believe they are all dogs.

ikkyu2

I used to have a Yes Man charm, but the one time I red thumbed a stock that I believed would really drop like a rock (AIB), I lost it forever. All of my picks are real life holdings and I keep my watch list for all others.

Port

I think you need some more CAPS players.:) How do you find time to keep up with all of them? Hopefully no one will take me seriously about wasting their time building up their CAPS score instead of actually looking for real investments that can make them real money.

Thanks to all for playing. I had a slow day yesterday since none of the stocks on my watchlist wanted to drop down to my buy level, and I pretty much had all I want of those on my active list.

Hope you all have fun and profit at the same time.

Have a good Friday, and a great weekend.

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#7) On March 16, 2012 at 9:00 PM, HarryCarysGhost (99.69) wrote:

Teacherman,

I guess I'll let the cat out of the bag and share a profile that I started with no intention of playing the game.

 scruffy4life

Rules were only green thumbs, and only companies that I believed in.

If I had a million dollars this would be somewhat similar to what my real life portfolio would look like.

You have yourself a great weekend also.

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#8) On March 17, 2012 at 10:16 AM, Teacherman1 (57.58) wrote:

Looks like Scruffy/Harry is doing great except for a couple of pics.

There is no reason you or anyone else can't play the game, as long as they realize that is what they are doing.

The "gameplayers" that irritate me, are those who make redthumb pics, and then post some sort of nonsense in their pitches, as if they had really done a deep analysis and come to that conclusion, rather than admit that they are just chasing points.

If you look at David G/SpiffyPop's pick for CDXS, he gives a reasonable assessment that they may be a long term winner, but for now they are spending a lot on R&D, and that he is really redthumbing it to pick up some points. It is also interesting to note that CDXS is a 4 star pic, and virtually everyone else disagrees with him. Of course, for now, he is the score leader.

No one who is looking at making an actual investment in CDXS is going to be mislead by that pitch.

But when I see a redthumb with a pitch that says something like "this is a real dog and will sink like a rock", with no supporting reasoning, it reminds me of the sort of posts you see on the Yahoo message boards and not what you would expect from CAPS.

JMO and worth exactly what I am charging for it.

ps Tell Scruffy, good luck with ATPG. That's one you don't want to own in real life, unless you are in at under $5.00. It is on my watch list at $4.50, and before I would even buy it at that price, I would have to go back and do a new analysis. Unless their new wells come in big, they are going to experience a huge negative cashflow problem. Maybe they will get lucky, and maybe they won't.

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#9) On March 17, 2012 at 10:47 AM, valuemoney (99.99) wrote:

zzlangerhans , I would tend to disagree with that statement for the most part. I would also contend that your picks would be the ones to stay away from the most. I have a list of between 50 and 70 companies I would ever invest in in my real life port. I hold no more than ten equities at once. So I would say for the most part 99% of your picks I would NEVER invest in.Way to many spec plays. So why would anyone look at your CAPS page. Now do I think you should be a part of CAPS. Yes. Do you know a lot. I am sure you do. 

portefeuille

You have SO many picks. Tell me for the average investor should they follow your picks? How could anyone even begin to follow you and know how to adjust his port. And the average person could not even begin to trade that much or justify the cost of those trades. 

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#10) On March 17, 2012 at 10:53 AM, valuemoney (99.99) wrote:

Teacherman1

Those tickers you posted. I would never invest one dime in any of those companies. What are there long term track records? Are the spec plays? What do you think they are worth? Should other people be following you and your picks? I will have to look at them and see. Maybe over a long time frame they are all terrible picks?

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#11) On March 17, 2012 at 10:54 AM, valuemoney (99.99) wrote:

Now no one get mad. I am just trying to make a point here.

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#12) On March 17, 2012 at 11:17 AM, valuemoney (99.99) wrote:

The point is the way I look a person has to look at everyones perspective and form a opinion of there own. And what they think.

Look at my CAPS page. I am currently 10. I have made over 1500 picks over 600 of those picks are green thumbs. I am pretty repeditive on the picks I make. Look at my current picks. Can you tell what I would stear clear of now? GOLD and SILVER. I have a couple picks from way back that I have not closed yet. They are like over 40 points in the red. For most of them I believe they are going to go positive. ( strong felling for the gold and silver picks ) I think by looking at my CAPS page it is VERY helpful. Go through and look at my accuracy on JUST my green thumb picks. You will find it is above all of your accuracy on all of your green thumb picks. Not to mention the time frame in which I garnered the points in most cases. Now for investing in RL. This is a totally different story for not only my picks BUT I would also say the same for everyone who commented on this blog. 90% garbage for your picks and mine. There are only a handful of CAPS player pages you should truly follow. And NONE of ours including mine would you minic real life. But if you take a CLOSER look from high rated to low rated player you can get an idea in general of their thinking.

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#13) On March 17, 2012 at 11:31 AM, valuemoney (99.99) wrote:

zzlangerhans

Go to Bbmaven's Caps page. Look at his green thumbs picks. Well one should sit up and at least take a look when he green thumbs a pick. Has he had many terrible green thumb picks? Blindly I would rather not even look at what he picked as a green thumbed an go with it more than ANY other caps player. Guess what. If I wanted a spec biotech play or wanted to gamble on a pick on my caps I go to YOUR caps page 1ST!

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#14) On March 17, 2012 at 1:18 PM, valuemoney (99.99) wrote:

Dig closer into my green thumb picks. Look at all the time frames. I started awhile back putting 5 year marks on the companies I thought were really good and that is my rating on how much i believe in the pick. See any NS time ratings on my green thumb pick? Yeah those picks are basically garbage. And would never pick them in real life. 3yr time frame I am pretty confident and would maybe consider buying the company. Just a heads up on my picks. Now look at my accuracy on those picks. The fact is make relatively few picks that you are VERY confident in. CAPS in general is NOT the place to do this if you want a high score. And if you dont care about the score I dont myself complain alot about the scoring on CAPs. This isnt set up right. I could complain about 99% of the players and how they go about making their pick as it relates to real life investing. 

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#15) On March 17, 2012 at 1:24 PM, valuemoney (99.99) wrote:

trueisntsupid should be the #1 player in CAPS if you guy are talking about investing that makes sense in terms of real life investing. Cus he gives pitches and numbers that make sense. And doesnt down thumb anything.

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#16) On March 17, 2012 at 1:30 PM, valuemoney (99.99) wrote:

sorry i mean truthisntstupid and maybe dumberthanafool or bargainstock. my spelling sucks they are on my list of favorites anyway 

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#17) On March 17, 2012 at 10:41 PM, valuemoney (99.99) wrote:

o the math on mine CAPs is 630 total green tumbs since 2008 and 72 currently have negative scores. 558 have positive scores by them for accuracy of 88.57% and I would also note a couple of those 72 could go positive so my accuracy on green thumbs should be somewhere around 90%.

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#18) On March 17, 2012 at 11:06 PM, Tarek307 (< 20) wrote:

I noticed the same thing today, that many of the high ranked people have mostley RED picks...so they go find a crappy stock & simply thumb it down & this raises their score? Sounds easy to just earn points & rank!

 MF needs to change this policy, maybe you get more points for UP than for DOWN or just points if the stock goes up!  

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#19) On March 18, 2012 at 2:55 AM, zzlangerhans (99.78) wrote:

I speak from experience, having been dumb enough to buy stocks based on green thumbs from top 10 players before I understood how the system can be easily gamed to accumulate points and accuracy. Those companies massively underperformed the broad market and my own researched picks, and several went bankrupt.

Red thumbing crap is just one of many ways to game the system, and most of the top ranked players use all of them, such as:

ETFs: Red-thumbing is the easiest way, but green-thumbing forty different leveraged short ETF's when the market is bloated can garner 10000 points or more. Many current top ranked players are still coasting on one smart or lucky guess from late 2008 or early 2009.

OB/PK bid/ask spreads: Not easy any more, but again responsible for thousands of points accumulated up to mid-2010.

Multiple profiles: Place your 40 bets on short ETF's now and wait. If the market keeps going up and your picks all go red, abandon the profile and start over with a new one. Eventually you'll hit the correction, and become the newest 99% genius.

And don't forget to keep screening for those mid-day stock holds. You can't trade in real life, but you'll still be able to get free points from a CAPS pick once you find out whether the hold is for good news or bad.

I've never once suggested that anyone trade a stock based on my pitch. In fact, I've done the opposite many times. My picks and pitches comprise a journal I can refer to in order to recall my state of mind regarding the 250 stocks in my database over time. If I actually make a purchase or a sale, it is explicitly documented on CAPS. I trade less than 1 in 20 of the stocks I pitch.

Unfortunately, new players are still making the mistake of extrapolating the prospects of success of green thumb picks from top player rankings. Any time a new player enters the top ten, or especially becomes number one, they get favorited by dozens of new players who figure they'll get rich following their picks. Those players are in for a nasty surprise.

bbmaven only made one green thumb pick in 2012 so far: SOHU. We'll have to see how that goes. I have a feeling many CAPS players are along for the ride with real money.

 

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#20) On March 18, 2012 at 4:23 AM, Tarek307 (< 20) wrote:

I ONLY mark stocks i'm in, that is it - I dont bother marking RED, because if its RED why would i buy! 

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#21) On March 18, 2012 at 11:38 AM, scruffy4life (67.43) wrote:

Much obliged Teacherman, Scruffys selling his shares of ATPG at a loss for tax puposes. Reckon Scruffy might be settin a limit order at $5.65 but will wait to see how the plot unravels.

Hmmmm Hrmmmmm!

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#22) On March 18, 2012 at 12:27 PM, Teacherman1 (57.58) wrote:

Valuemoney-

I'm sorry if I offended you, but I think there were enough disclaimers and reasons given for why I posted it, that you shouldn't have been.

BTW I was not specificaly referring to the TOP TEN, but to numberous others with scores in the high 90"s, which were based on the strategy of red thumbing one star stocks.

As for the tickers I posted, I didn't ask you or anyone else to buy them. With the exception of FCEL, I have posted plenty of blogs and made numberous pitches as to why I think they are good buys, but I always encourage everyone to do their own DD.

I do happen to think that all three are good longer term investments, and I own them in RL.

I don't know if your comments about accuracy were addressed to me or someone else, but I admit my accuracy, as reflected in CAPS, is horrible. The reason is that I constantly close and re-open my picks to show where I actually am as far as what my real life cost figures are.

One of the reasons for this is as a memo to myself  but also to let anyone looking at them to know what may be a good investment for me, because of my cost, may not be as good for them at any given time. A good example of this is FCEL. I happened to buy them at $0.93. While I think that over the long term this could go much higher than its current price, I would probably not have bought as much as I did at today's price.

My strategy is pretty simple, to buy stocks of companies that I think have good longer term prospects at the lowest price I can.

In RL, as reflected on my SA scoreboard as of yesterday, I was up over 40% across my portfolie over the last 7 months, which is the length of time I have owned and still hold my oldest stock purchase.

If I had not prematurely (as is obvious in hindsight) sold several of my previous purchases, I would now be up over 100%. Selling too soon is one of my "flaws", but luckily this results only in opportunity losses. A good example of that is CBI, which I sold at a 159% profit. If I still owned it today, I would have a profit of over 650%. Of course, we all have stories like this.

Does that mean I think everyone should buy certain stocks just because I do, of course not. Each has to take into account their own knowledge, risk tolerance, investing strategy, etc.

You, like everyone else here is free to pick and red/green thumb any stock you want, it makes no difference to me.

If you will look at the bottom of my post, you may notice that I said. the following:

        "  Just in case this sounds a little harsh, this is "tounge in cheek". "

Have a great week next week and good luck with your investing, whatever you choose to invest in.

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#23) On March 18, 2012 at 2:55 PM, valuemoney (99.99) wrote:

O, Teacherman1 I was not offended at all by you. And I know what you were saying in your post. And I was not trying to be mean by my comments. It was more directed at the other comments I saw. And I understand why they think what they do. But some of the stuff I see being said I felt like I had to defend my own position because it seems like since I am in the top ten and I do red thumb a lot of things I am in general lumped with everyone in that I don't know what is going on and I am a high rated player just because of that. People always are stating the way CAPS should be set up and who deserves a higher rating and why. So I am just stating MY thoughts on it. I like CAPS, that is why I am on it and like hearing EVERYONES thoughts and seeing their picks. Plus if I am rated higher by playing the game more people will be able to see my green thumbs and red thumbs what I think is good and what isn't. I know there are a bunch high rated players who I wouldnt follow their thumbs they make on their picks. But lumping everyone together isn't fair.

Now if you will look at my comment #11 "Now no one get mad. I am just trying to make a point here." You would know I was just saying my side of it. I am not mad myself with anyones comment. I just wanted to state how I see things same as everyone else did on this blog. :) Have a good day everyone and good luck in investing!

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#24) On March 18, 2012 at 4:17 PM, Mega (99.95) wrote:

Why won't CAPS post my comment?

Sorry if this posts multiple times.

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#25) On March 18, 2012 at 4:19 PM, Mega (99.95) wrote:

Ahh, that's even worse.  It refuses to post my actual comment despite trying 3 times, and then it posts my test comment with no problem.

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#26) On March 18, 2012 at 4:44 PM, Mega (99.95) wrote:

I short OTCBB stocks and leveraged ETFs in real life.  Anyone who claims that shorting junk stocks and ETFs is not a valid real life strategy is ignorant.

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#27) On March 20, 2012 at 12:29 PM, Teacherman1 (57.58) wrote:

MegaShort

I don't think that shorting junk stocks and ETFs is not a valid real life strategy, but I don't think most people could pull it off successfully.

It takes a lot of skill, a lot of knowledge, and a lot of ****s.

I would just hate to see people who are new to investing try to follow that strategy without understanding what is required.

Always glad to know there are successful "risk takers" who are doing it successfully.

Post a blog and tell us how you do it. It would be very educational.

Good luck and happy investing.

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#28) On August 15, 2014 at 3:41 PM, notyouagain (39.08) wrote:

Unfortunately, many of the most knowledgeable investors will never crack the top.

Conversely, many at the top that got there by heavily weighting their portfolios with ETF's will always be overrated as far as stockpicking knowledge.

This type of post warning investing novices of the pitfalls of blindly following someone with a high CAPS rating/score will never be outdated. 

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