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Caps and the highest average pick score...

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March 13, 2007 – Comments (3)

I know a lot of people had been stumping for something like this, but I'm not sure it's any more useful than most of what we've already got for Caps metrics.

 

As we all know, averages can be horribly skewed by a couple of big numbers. Maybe we need median, too. And standard deviation? And time period over which these scores were earned. Tell you what, I'd take more advice from someone who could consistently put up low single digit average scores over 1-month holding periods than I would someone with iffy accuracy who happened to get a couple of moonshots.

 

Why? Because my odds of making money with a copycat scheme are a lot lousier with the moonshot maker than they are if I follow someone with a consistent record of small gains. 

 

Sj 

3 Comments – Post Your Own

#1) On March 13, 2007 at 8:57 PM, casmar5501 (90.30) wrote:

I completely agree I try to copy everything the TMF -team does.

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#2) On March 14, 2007 at 12:33 AM, SH2F088 (90.99) wrote:

Accuracy & Score are both important, I agree.  But if a person can achieve a high score/pick with a lot of picks, I like that better than a positive score/pick with mega picks.

As a retail investor I will not ever invest in 100 stocks, maybe 10 or 20 though.   The analyst who can get me a good percentage gain for their typical pick is what I covet.

I also appreciate the CAPS player who can bring new blood into the mix.  TMF newletter picks with everyone joining the bandwagon, are not as effective in improving our collective intelligence, as new finds are. 

I am with you regarding the player who gets a couple of (Lucky?) moonshots.  If we could sort players by avg pick score and provide a min number of picks, the list would be more usable/meaningful.

-Keith 

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#3) On March 14, 2007 at 9:07 AM, ctmedic00 (96.35) wrote:

        You are absolutely right.  Someone who makes good picks with sound reasoning is significantly better than one who might make a killing on speculative picks.  CAPS is tough with this though because of the % scoring.  Buying GS is a sound investment but at $200+ is not going to reward you with much in the % area.  Same with GOOG.  However speculative biotech is where it's at when you are looking to score big because it's easy enough to find one cheap and any rumor can send it to the moon.  In my real portfolio I would never own 70 different stocks because transaction costs would break me so an ETF might work better. 

        It's going to be tricky here because getting to Top Fool requires a much different strategy than sound rational investing.  I like the ideas you put forth and would like to see if you can implement them.  You guys at the Fool are doing excellent work and it gets better all the time.  It's going to be tough to really seperate the best from the lucky (especially in the middle of the pack) but I know you'll do it.

Thanks for your hard work,

 Chris

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