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AllStarPortfolio (23.59)

All Star Portfolio - Open for business - and SHOULD WE EXCLUDE ULTRAS?

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May 18, 2009 – Comments (30) | RELATED TICKERS: LXP , NM , GXDX.DL

 To qualify for a pick you must:

 Have a RATING of more than 99 on the day of pick

    -OR-

 Be a "yes"man with a RATING of 98 or higher on the day of pick

    -OR-

 Have at one time been a Top Fool

    -AND-

1. Have been a caps player for more than 6 months.
2. All picks MUST have a pitch, and a time frame.

    -OR-

Be in the Top Ten at the time of pitch

Players are free to change the pick as often as caps permits.

To submit a pick Players should attach their pitch to a blog from this portfolio, or indicate in this blog that they have one on their own page. I will then copy that to the stockpicks list on the quickstats page, so that it will be visible on both the stock page and the quickstats page. I will of course place your name, and score at time of pick on the pitch.

You can name your stock here, for dibs (will hold for 7 days), but i will not post the stock until you have made your pitch also (i will, for goodwill, post the picks that were made on the first blog post, and hope for pitches soon).

I am willing to share the password with a few someones, if they would like, to facilitate timing.

**************************

Currently we are waiting for a pitch from Goodvibes4ever on FAZ (if your not too busy).

16+ fools have already made a pitch, effectively 'cost averaging' and buying in even though it's 'not the best time'. I am grateful to those who jumped in right away, because though they may lose a little in the beginning, the project might have stalled without some starters. Several other fools have mentioned interest, but are waiting and trying to time the market.

We are already racking up a few charms, like the Favorite charm, and the coveted Most Helpful Pitcher charm.

I can barely wait to see what happens next!

-solaris

 *******************************#4) On May 17, 2009 at 10:42 PM, UltraContrarian (99.89) wrote:

I would think FAZ goes against the spirit of the portfolio. Presumably you did not want to encourage downside market timing when you requested all green thumbs.

 

I'll do China Bio Energy (CBEH.OB) this week.

Report this comment #5) On May 17, 2009 at 11:00 PM, AllStarPortfolio (45.72) wrote:

I have been wondering about that FAZ pick myself. I am wary of making too many rules

I would be willing to make some sort of rule like that if there was enough discussion between the players already on the field, and folks wanting on.
   My point with all green thumbs was to make an investment portfolio. Something safe, that you could feel free to ignore for a while if you wanted to. And FAZ certainly is not safe, or a long term investment, and could lose a lot lf money fast if it was not watched.
   Incidentaly, GV picked FAZ and has not put up a pitch, or dropped by this blog since he did so. I hope that he does put up a pitch soon, and i hope he was right, because it could beat up this experiment before it even gets a good start (i personally think he is 'right' about the turn, but am still a little worried).
   See, i fear that fools who see this portfolio will think that since FAZ is on this list it is a safe bet, and perhaps leverage, and lose. Ironic that GV didn't see the potential to lead the sheep astray, since he is always warning against Ultras.

SO WHAT DOES THE FOLKS THINK ABOUT AN EXCLUSION OF LEVERAGED ETFS? or some other little rule like that?

-solaris

 

30 Comments – Post Your Own

#1) On May 18, 2009 at 10:50 AM, JakilaTheHun (99.94) wrote:

I think ETFs should be excluded period --- levered or unlevered.  What's the point in an "All Star Portfolio" if it's just a random bunch of bullish and bearish market calls?  I think the value of this profile is seeing top CAPS members' stock ideas.  Having a bunch of ETFs makes it very uninteresting to me.

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#2) On May 18, 2009 at 10:51 AM, edwjm (99.87) wrote:

I say exclude all derivatives, ETF's, closed end funds, and everything else that does not represent stock in one single company.

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#3) On May 18, 2009 at 10:56 AM, portefeuille (99.59) wrote:

In a 13D filed after the close yesterday, Seth Klarman's Baupost Group has boosted their position and has now disclosed a 17.8% ownership stake in Facet Biotech (FACT) due to activity on April 8th, 2009. The aggregate amount of shares beneficially owned is now 4,374,407. When we covered their 13F filing, we noted that as of December 31st, 2008, Baupost owned 2,772,092 shares of FACT. So, Baupost has boosted their position in FACT substantially.

(from here)

Klarman knows what he is doing.

Read this and listen to the presentation tomorrow

I am sorry, but I really don't know how to write research reports. When I do, I will replace this by a genuine report by me ...

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#4) On May 18, 2009 at 10:57 AM, portefeuille (99.59) wrote:

(that was my FACT pitch)

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#5) On May 18, 2009 at 10:59 AM, clanza875 (33.12) wrote:

I really like JMBA as a spec play but i presume we are bound by the CAPS rules (at least 1.50 and 100M market cap)

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#6) On May 18, 2009 at 11:00 AM, EggplantWizard (99.53) wrote:

In general, I agree with excluding ETFs and also .PK companies that are not traded on a major foreign exchange in addition to the US pink sheets.

 

(Not to force-close any existing picks, but as a bar to new picks)

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#7) On May 18, 2009 at 11:01 AM, EggplantWizard (99.53) wrote:

More specifically:

 

"#2) On May 18, 2009 at 10:51 AM, edwjm (99.16) wrote:

I say exclude all derivatives, ETF's, closed end funds, and everything else that does not represent stock in one single compay"

 

 

Sums up my feelings pretty well on the matter

 

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#8) On May 18, 2009 at 11:04 AM, bigpeach (32.76) wrote:

Agreed on exclusion of all ETFS.

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#9) On May 18, 2009 at 11:04 AM, TMFBabo (100.00) wrote:

I agree with the previous posters.  We should each pick common stock from one company.

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#10) On May 18, 2009 at 11:16 AM, SolarisKing (22.17) wrote:

I see what your getting at, but i really like the exposure+safety of some etfs. For instance i really like the PHO pick, and am fond of some of the alt energy ETFs.

I also like the thought of being able to buy treasuries without buying in for 20 years, stuff like that.

I give my full support to excluding ULTRAs.

Of course if in the end, there is a consensus (excluding me)for no ETFs at all, then i am more of a administrator of this profile more than anything else.

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#11) On May 18, 2009 at 11:18 AM, bigpeach (32.76) wrote:

Additionally, I wish you would make this a long term portfolio with real stocks that we can use as ideas for real investing. Minimum holding period of one year. Bravo's pick is an example of an idea that is intended to play the CAPS game and is useless to many of us as far as a real investment. It's not like we're going to go out and buy a .PK and sit here refreshing until we see Bravo has ended the pick. No offense intended Bravo.

If you're going to allow constant trading, I will volunteer my services to estimate the trading costs effect on the portfolio. You know what might be interesting, keep this one, and set up another with only long term green thumbs for comparison. Trading costs included.

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#12) On May 18, 2009 at 11:19 AM, SNHamilton (99.97) wrote:

agree with edwjm : "I say exclude all derivatives, ETF's, closed end funds, and everything else that does not represent stock in one single company.".  Also no "double picks" (if someone else has picked BRK.A, no one else gets to pick BRK.B).  The assumed goal of this account is to represent the best of the bests' long term stock picking ability, it is NOT to try to get the best score possible.

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#13) On May 18, 2009 at 11:49 AM, ChrisGraley (29.74) wrote:

I would hesitate to make too many rules. If the point is to learn from the better investors, it makes little sense to put restrictions on them. If the point is to close your minds to the other ways the better investors make money, then by all means make a ton of rules.

I would prefer this to be a free market economy. :)

BTW I'm waiting on the FAZ pitch too, especially the sell point as I Green Thumbed FAZ a while ago in my main account.

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#14) On May 18, 2009 at 11:55 AM, MattH42004 (30.23) wrote:

YES! ETF picks are about market timing. They have their place and they do say something about a players ability to predict macro movements. However, they have nothing to do with stock picking and I'm fairly sure that's what this portfolio is about. Personally, I would exclude all ETFs and all funds as well. Only stocks representing individual companies that the average investor can purchase should be allowed. Anything else seems run contrary to the purpose of the portfolio.

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#15) On May 18, 2009 at 12:11 PM, SolarisKing (22.17) wrote:

Actually, i fell for it when Bravo picked CCTC. I have it as a red...  well your read it.

I do see a general consensus:

1. The goal is accuracy.  This caps account should reflect good, safe, well thought out, long term trades.
     If you make a pick for a year, you should be allowed to close it at any time, but encouraged to make your best pick, and then hold it. If you find a better all time favorite pick, then by all means close the old pick and tell us your new 'really' favorite pick.

2. The goal is average points per pick. Without hurting accuracy, we want money. Long term, easy, money.

The goal is NOT winning at caps. The goal is NOT to have to watch a profile all the time to maximize a false reality.

Safe accuracy would be enough for me. Sleep easy stocks.

2% - solaris 

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#16) On May 18, 2009 at 1:15 PM, JakilaTheHun (99.94) wrote:

I'd definitely agree with that "consensus", Solaris.

I'm also in agreement that .PK and .OB stocks should be excluded since they have funky trading patterns.  This portfolio will be a failure if it has to be actively managed.  I'd like to see CAPS players make the best long-term stock picks so that even if no one bothered to update this profile for 3 years, it still might be performing relatively well. 

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#17) On May 18, 2009 at 1:22 PM, ikkyu2 (99.34) wrote:

Might as well exclude all ETFs.  Make it an upside play on any single stock.  ETFs and stocks are apples and oranges, and leveraged ETFs are pears.  Stands to reason any levered play, if correct, will tend to beat any unlevered play, all else being equal; no point in rewarding that trivial insight.

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#18) On May 18, 2009 at 1:29 PM, Bays (30.21) wrote:

Exclude ETFs.

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#19) On May 18, 2009 at 2:01 PM, SolarisKing (22.17) wrote:

But i really like that PHO call.  !  It fills every concern, in my opinion, except that it's an ETF. 
   Is there anything usafe, or unprofitable, or not easy, about PHO?

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#20) On May 18, 2009 at 2:05 PM, edwjm (99.87) wrote:

Do I qualify to make a pick?  I get lost reading all the AND's and OR's.  If so, my pick is IR. 

Pitch: 

IR is a company that has suffered not only from the recession, but also from the high prices paid for recent acquisitions as well as the woes of the domestic auto industry.  This is no one trick pony, but is diversified into several different industries.

Looking forward, recent restructuring and bond offerings have improved its balance sheet.  It should see good growth from its strong position in the climate control industry.  The recent renewed interest in infrastructure should also benefit sales.  It has a strong collection of brand names. Estimates for EPS for 2010 average about 1.67, which makes for a forward P/E of 12.85.  At the current price of $21.46 the dividend is a respectable 3.7%. 

Many critics complain that IR overpaid for some of its recent acquisitions, but I believe that is already reflected in the current price.  I believe this could easily be a $50 stock before 2012.

I suggest a 5 yr timeline for this outperform (green thumb) pick.

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#21) On May 19, 2009 at 7:19 AM, TMFBabo (100.00) wrote:

Whatever you decide, I think what's done is done and the practical thing to do is exclude them from now on.  That's if you decide to exclude them, of course.

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#22) On May 19, 2009 at 2:07 PM, SuperPicks (29.01) wrote:

I think unlevered ETFs are an amazing tool for just about any portfolio.  (how else can one go long on volatility index? VXX. or diverse group of commodities? GCC. or broad based emerging market bonds? PCY. or preferred stock of companies? PFF)

ETFs are very practical and especially useful for a portfolio pick.  And looking at the "All Star Portfolio" today with over 15 picks, it is very likely many ETF plays would beat at least 25% of All Star Portfolio's picks. 

I can't submit a pick yet, unless if you can pick VXX (in which case, I would say with the current macroeconomic environment, matched with recent market gains & optimism levels, the volatility index is likely to spike from todays levels which is currently below 30 today.)  There's more material on discussion of this in my last blog post, you can clip & piece together my sentences at your discretion for the pitch if you do use it. 

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#23) On May 19, 2009 at 2:31 PM, AllStarPortfolio (23.59) wrote:

I understand what you mean, and think that your right about the usefullness of ETFs, but i encourage long term picks that are safe. I am willing to post long term ETFs, but the general agreement we have so far is. . . .

Safe, easy, sleep at night, money.

What do fools think about a pick on VXX?  And what time frame are we talking?

SuperPicks, what is your favorite 5 year pick? giving us a hint doesn't mean you have to pick it now. How about an industry, or sector, and an entry point?

- solaris

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#24) On May 19, 2009 at 3:13 PM, SuperPicks (29.01) wrote:

The VXX time frame is 6-9months.  If VXX is rejected, then I would ask will FAZ pick be ended the moment the 7 day holding period is up?  If not, then when?

5 year pick today I would make is FAX.  It's a closed end currency fund by Aberdeen that will preserve capital through the turbulent markets.  It holds its funds within Asian currencies.  There will inevitably a shift of capital in the markets pouring into the emerging Asian countries which should generally bode well for the local currencies.  The price levels of world equities & developed currencies today are questionable given current debt levels.  This holding should address this concern.  More information on the fund can be found here: http://www.aberdeen-asset.us/aamus.nsf/usmutualfunds/closedfax

I would rather pick VXX today than FAX.  But if VXX can't be made, then I would defnitely like to pick FAX.

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#25) On May 19, 2009 at 3:22 PM, SolarisKing (22.17) wrote:

FAX, now that's thinkin'! there's a five year pick i like.

But the real question was, is a 6 month pick allowed or discouraged on this portfolio? VXX is not a leveraged ETF, right? and the investment should return rather well (as the great bear runs wild for "sell in May")?

What think you fools?

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#26) On May 19, 2009 at 3:23 PM, SuperPicks (29.01) wrote:

btw, some ETFs are much more "Safe, easy, sleep at night, money" than many of the existing All Star Portfolio picks.

The main concern around ETFs is the dilution effect of adding say an ETF that holds a broad collection of stocks that really provide no real added value to existing collection of stocks in the portfolio.  The last concern of ETFs is questioning its safeness/soundness unless if you are talking about a levered or exotic ETF which are a minority in the ETF universe.

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#27) On May 19, 2009 at 3:26 PM, SuperPicks (29.01) wrote:

VXX is not a leveraged ETF, but in order to track the volatility index itself, it requires investment in futures contracts.

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#28) On May 19, 2009 at 3:31 PM, portefeuille (99.59) wrote:

... and the investment should return rather well (as the great bear runs wild for "sell in May")?

I think you are doing "a good job" with this allstarportfolio but now you are getting slightly too involved (or overemphasise the "democratic" feature), I think. 

If someone is allowed to pick something then he should pick whatever is "allowed" whether it is may or not. The "wisdom of the crowd" should simply come from putting together the picks, not from discussing them or "voting" on them ...

Apart from that, as I said, you are doing just fine!

 

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#29) On May 19, 2009 at 3:41 PM, AllStarPortfolio (23.59) wrote:

Thanks, Portefeuille. What i was really trying to ask, minus my own investment advice question, is .. . . .

Do we want to put a minimum timeframe? of 6 months or a year? Or do we just encourage long picks but allow players to pick even 3 week timeframes?

I myself, vote for 6 months, as a compromise between buy and hold, and make some turns.

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#30) On May 19, 2009 at 3:41 PM, AllStarPortfolio (23.59) wrote:

Thanks, Portefeuille. What i was really trying to ask, minus my own investment advice question, is .. . . .

Do we want to put a minimum timeframe? of 6 months or a year? Or do we just encourage long picks but allow players to pick even 3 week timeframes?

I myself, vote for 6 months, as a compromise between buy and hold, and make some turns.

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