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portefeuille (99.56)

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May 13, 2010 – Comments (17)

I just re-read this post by zzlangerhans, written March 30,2009.

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Finding the true gurus in CAPS

Did someone already write this post? Hopefully not. I’m still a little young to be the guy who tells you the story that you just told him yesterday. This is an attempt to coalesce in a thread some thoughts that highly contributing members have had about improvements we would like to see on CAPS. TMFJake, I’m aware you are on the case and I appreciate your efforts. But after the last “upgrade” I think it would be best for our preferences to be on the record before any changes are made. For those of like mind, please keep comments on point so that we can maintain this thread and eventually arrive at a mutually satisfactory slate of prospective improvements to present to TMF. As attention spans are short, I’m going to make the suggestions first and then rant afterwards.

 

I. A screening tool to identify players that outperform according to individualized standards. Leave the rating system as is, just allow us to search within it for our own purposes. Stock and member screeners are already in place, unfortunately the data inputs are generally useless (risk tolerance??). My personal preference would be to look at score only, isolating outperform pitches on non-OTC stocks and eliminating the S&P comparator. I could go either way on leveraged ETF’s, but I’d definitely like the option to eliminate red thumbs on unshortable ETF’s

a. Option to isolate green thumbs or red thumbs

b. Option to eliminate .OB and .PK

c. Option to eliminate accuracy

d. Option to eliminate S&P comparator

e. Option to eliminate leveraged ETF’s

 

II. Make CAPS more friendly to those of us who like to write about stocks of actual companies, and easier for us to find each other and read each other’s work. Many of us follow sectors or a small collection of stocks and they are like our naughty, misbehaving, unpredictable children.

a. Emphasize comments, or provide preferences to see more comments on the stock page. Raising the comments and moving the news down to the bottom would be an improvement. I come to CAPS for collective intelligence, not comprehensive company data.

b. Put rec boxes back in the top bull/bear spots.

 

III. We want to be score leader on our pet stocks. Our ratings will inevitably plateau if we don’t resort to playing games with the scoring, so we want to be able to compete for something.

a. Change the leaderboard to reflect the players with the top cumulative scores across all their picks, the way that the score leader is chosen. We don’t care so much about that guy who randomly picked it at the low point two years ago because he liked the ticker symbol and racked up a double. I want to know the guy who got positive scores on it up and down nine times in a year.

b. Add a score leader ranking. Who are the score leader leaders? 

 

IV. Clean the game up just a little.

a. Why can we cancel picks during the 20 minute delay? I understand the delay, but not the cancel. You’re encouraging people to sit in front of their computers all day picking and canceling as they feel for a high or a low. My brokerage won’t let me do that, and I don’t really want to do it on CAPS either.

b. It’s irritating and misleading to see stocks that blew up maintaining 5-star ratings while they trade in pennies, because they’re under the threshold and there’s no incentive for anyone to close their outperform picks (if they’re still even around).

c. What’s the point of having a player score graph that only goes back a few months? If you can’t take it back to inception you might as well put that space to better use.

d. There are not 66000 people playing CAPS. People who were here for a week in 2006 shouldn’t be in the ratings. If they haven’t picked or blogged in three months, they’re most likely gone, let go. Send them an e-mail, if they don’t answer cut them out of the ratings. I don’t want to be an “AllStar” in a game where the journeymen all retired last year.

e. People who only registered to pump or flame and don’t even have picks shouldn’t be among that number either. They also shouldn’t be allowed to post anything if they’re too lazy or insecure to rate the stocks they’re yapping about. Let them stay on Yahoo.

f. Is there any way to fix the lags and errors that plague the scoring? If you’ve tried and you can’t, that’s OK. But it’s annoying to finally close a pick after a year with a 7.8 score and see it show up in the Ended column as a 4.9. I know, I’m the guy who doesn’t think Accuracy matters. But still …

 

And now the rant …

 

I come to CAPS to practice virtual investing in actual companies, and to read pitches and blogs by those who do that much more skillfully and profitably than I do. In return, I’ve contributed everything I could as I have learned, and I’ve been as honest as I can about my limitations and errors.

 

What could be better than being a top 10 ratings leader on CAPS? Actually, just about anything. Not the least of which would be if CAPS helped me make actual money in the market.Unfortunately, the current system fails to identify players who can be followed into outperform picks with real money with any expectation of not losing one’s shirt. High ratings themselves are particularly unhelpful as predictors of success, although the low ones are fairly useful as predictors of failure. When I first joined CAPS I took the word of anyone with a rating over 99 as gospel. Once I hit 99 myself and climbed as high as the 99.7’s, I continuously had to raise that bar as I was painfully aware of my own inability to grow rather than vaporize my own brokerage account. Eventually I realized that CAPS rewards longevity and obsessive-compulsive disorder far more than it does the ability to make money in the market.

 

Can CAPS identify true outperforming investors for those of us that want to follow them into long investments in real companies, where we can actually buy shares at their CAPS start price? It is very possible that it cannot. After all, those investors are a small minority, and why would they waste time on CAPS or any other stock site when they could be quietly enriching themselves? Then again, maybe they are out there, maybe they’re very proud of themselves and want everyone to see what they can do, or maybe they just want to share. But if they are in CAPS, most likely scattered around the top 200, I want to find them. 

 

Apparently, there are some who believe that CAPS was not designed for this purpose and we are somehow misusing the system by seeking such a benefit from collective intelligence. If so, please carry on as you were. Our requests should not affect your CAPS experience in any meaningful way. If you feel compelled to write a “Love it or leave it” type response, I would encourage you to conserve energy and move on to another blog post instead. To the highest-rated, I don’t intend to denigrate your efforts. Some of you would certainly be among the highest-rated on my individualized list as well. But it’s been a rough couple of years and I’m ready to make a little money. Past performance may not guarantee future results, but I’m willing to weigh that risk. CAPS, are you ready to help?

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It is just unbelievable how stubborn "the staff" has been. At around the time zzlangerhans wrote that post the "constructive criticism" peaked. What followed was a phase of stubborn resistance  (the staff) and apathy (the reform suggesting players).

And now this post.

New Ratings Idea for CAPS

that just has to be a bad joke ...

 

17 Comments – Post Your Own

#1) On May 13, 2010 at 1:02 PM, portefeuille (99.56) wrote:

I agree with every single point zzlangerhans was making in that post by the way.

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#2) On May 13, 2010 at 1:07 PM, portefeuille (99.56) wrote:

What could be better than being a top 10 ratings leader on CAPS? Actually, just about anything.

my favourite part, hehe ...

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#3) On May 13, 2010 at 1:16 PM, YodaBuffett (< 20) wrote:

I would love to see a system like the one Zzlangerhans suggested.

  

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#4) On May 13, 2010 at 1:57 PM, russiangambit (29.49) wrote:

> Can CAPS identify true outperforming investors for those of us that want to follow them into long investments in real companies, where we can actually buy shares at their CAPS start price?

There is a site coverstor.com, where you can do just that. It cant track both real and imaginary accounts.

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#5) On May 13, 2010 at 2:57 PM, leohaas (35.73) wrote:

Sigh...

It would indeed be nice to see most of zzlangerhans' suggestions become reality. Unfortunately, CAPS has devolved into a subsidiary of the Cato Institute. Maybe that is great for those who are a fan of the Institute and for newbies who know nothing about Libertarianism, but for those of us who come to the Fool for investment ideas, it becomes harder every day to find what we are looking for.

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#6) On May 13, 2010 at 3:10 PM, portefeuille (99.56) wrote:

#5 an option to eliminate the posts on "politics" would be nice ...

Make CAPS more friendly to those of us who like to write about stocks of actual companies, and easier for us to find each other and read each other’s work. Many of us follow sectors or a small collection of stocks and they are like our naughty, misbehaving, unpredictable children.

 

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#7) On May 13, 2010 at 3:49 PM, dragonLZ (99.69) wrote:

It is just unbelievable how stubborn "the staff" has been. At around the time zzlangerhans wrote that post the "constructive criticism" peaked. What followed was a phase of stubborn resistance  (the staff) and apathy (the reform suggesting players).

And now this post.

New Ratings Idea for CAPS

that just has to be a bad joke ...

Exactly my opinion, porte.

I saw Jake's post yesterday and thought right away: What a waste of time. Stupid...

I said/wrote nothing as I didn't won't to hurt Jake's feelings as I know he is a nice guy.

Can't believe that's CAPS Staff's best idea and best use of time...

Also, agree completely that 95% of CAPS is timing and system manipulation, not real stock picking. 99 rating doesn't really mean much (other than that one with 99 rating has a lot of time on his/her hands to "play" the system). 

I like the site and the CAPS game, but it can be so much better and so much more useful...

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#8) On May 13, 2010 at 7:11 PM, portefeuille (99.56) wrote:

another post suggesting changes.

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Opening up a new continent in Caps; finally some justice for the stockpickers and a new challenge for the rest of us; innovating caps (7)

August 28, 2009

1. I believe in Caps. I think that a Caps will become the preferred web-environment for (all) investors. I think that actual buying and selling will be possible within them. I think that analists, economists, financial journalists, stockletters and advisers will tie their work to it. I think that the Caps will become global and cover all markets. I think that they will become the prime originators of trends, hypes, fads on the markets. I think that they will have millions of members. (I think that Caps could become a generic name like google or coke.)

2. I think that Caps could become much bigger then the Motley Fool. I think that if the Motley Fool realises that, both Caps and TMF would benefit from it.

3. Caps is in many ways like a MMORPG -only better. It is a pleasure to play, it creates a community, it makes individual learning possible, it produces infosight, it can be used to make better investment decisions and make individuals and the world richer.

4. Participants will use Caps in unexpected ways. That was clear from the beginning. Intended as an extension of the buy and hold stockpicking philosophy and strategy of TMF it morphed quickly into many other directions. Caps should embrace that, welcome it, make it the core of its philosophy: we do not yet know what directions a caps will take, what strategies there will develope within it, but we are curious, we want to see, we will accomodate those strategies over time and mine the data for the benefit of the whole community.

5. That means that the baseline version of a Caps, should be as wide as possible, should be as open as possible, should have as little limits as possible, should cover as much as possible, should maximize, in other words, the possibility of the emergence of the unexpected. The TMFCaps has done this reasonably well. It could have forced us into a stockpickers mode, for example, but it did not. It is, however, certainly possible, to open up the baseline even further. For example, by dropping the lower limits that exclude certain stocks. For example, by adding stockmarkets from which stocks can be picked. For example, by going real time. This ever more widening of the baseline should be one important direction of the development of Caps.

6. A second direction of the development of Caps should of course be the gradual type of enhancement we have been witnessing. A better screening function, an easier way to "sell" positions, better visibilty of posts and easier following ..etc.  A third direction should be to actually promote the tie in of others. The existing "wall street" feature is a great beginning but could be much better implemented.

7. However, the most important direction of development for the next years, i believe, should be the accomodation of certain distinct strategies that have emerged within Caps. If we do that in the right way that would have an effect that is comparable to a MMORPG-extension -the addition of a new "continent" with new adventures that make a different kind of play possible and promote a new kind of skillset. It should be used to generate publicity, to attract new participants, to seduce existing participants to accept a new challenge. Of course the most important goal should always be to generate more and better infosight about the financial markets.

8. The key to adding a new "continent" to a Caps will (allways)be to add a new ranking. Nothing below that level will have a comparable effect. (I of course realise that the addition of a new ranking is a major undertaking. We should not fear this, however, but use it. Done right it will mobilize the entire existing community . It will also attract a slew of new players, because they see a better "entry point", but more importantly, because they are interested in the underlying strategy.) Only a new ranking will do because it is the idea of a competition where we pit ourselves against all comers over a (theoretically) infinite period of time that is the main attraction and the core of a Caps.(Of course we should only add rankings in a very slow rythm. Just like MMORPG adds "continents". One every two years? for example?)

9. I have suggested three new "continents", three new rankings for Caps, all three based on existing player styles. The stockpicker, the macroplayer, the specialist. (See my earlier posts, for an explanation)

10. I will in the rest of this post explain how such an addition of a ranking should be undertaken. I will use the stockpicker's universe as the example to illustrate the main points. That choice is not a coincidence. A stockpickers rating should in my opinion be added first.

11. People who are very good in picking individual "winners" in the stockmarket, stocks that outperform an index for a long time, cannot win the baseline rating in Caps. That is discouraging. The infosight value of their stockpicks is very high. We should therefore entice them to stay and attract as much of them as we can. We also do not datamine the decisions of stockpickers good enough. (See earlier posts.)

12. There is an additional reason to finally accomodate them. Because of the TMF philosophy Caps in its rethoric promises to be an ideal environment for stockpickers...but it isnt. This is a broken promise. It is high time we made good on it. (I admire the loyalty of all those players that still are active on caps with a stockpickers strategy.)

13. The basic formula for the SP-ranking should be this. Everybody has to pick between 10 and 25 stocks. Only greenthumbing is allowed. Only stocks are allowed. The score is the same as in baseline Caps. (accuracy, points ..points are not absolute but relative to S&P.) Stocks need to be held for at least six months. If at any time the amount of stocks held longer then six months falls below 10 the score goes to zero.

14. Lets first outline what kind of investor-behaviour this kind of ranking will promote. To have a chance of succes i will have to think very hard about individual stocks. Something like a list of my best 25 ideas will probably work best. While i can do it in the form of sectorbets (all 25 within one sector) if i do that my risks are very great. If my bet on the sector is wrong my losses could be great and difficult to overcome without breaching the 10-at-all-times-rule. So diversification would be a wise choice. The combination of the six-months-rule and the 10-at-all-times rule would make for a slow turnover. The mean holding period of a stock will probably be much longer then six months. I believe that the SP-ranking will therefore indeed generate the best individual stock idea's in a buy and hold kind of context. The infosight value will be high and it should make the star-rating of individual stocks much more valid.

15. Very important is that this should be a real ranking, that is, a universal one. Every participant should get an SP-ranking -even if he does not want to play in that fashion. Only when we do that the SP-ranking will become important enough, will get enough "weight", will become (almost) as important as the baseline-ranking. (There needs to be a way to designate SP-picks.Players who have not (at least)10 designated green 6monthsheld SP stocks will be ranked zero on the S&P score and ranking)The SP ranking should be prominently displayed on the MY-Caps page. And then, of course, in the usual way visible all over the community.)

16. It should be possible to play this from within an existing page and portfolio. So out of my 200 picks i should be able to designate a maximum of 25 green picks as SP picks. It should of course also be possible to create a page just for SP-picks. (But that page will then also be rated against the baseline!!!)

17. If we add a ranking in this way i believe that several things will happen at once. The existing stockpickers will play with much more gusto. Their efforts will finally be recognized. By word of mouth that will also attract newcomers, first of all from the disgruntled TMF community, but then also from outside.

18. However maybe even more important this new ranking will act as a gauntlet for the existing player base. So you are among the best overall players...a couple of thousand points...ranking 98.. but are you also a good stockpicker? the good stockpickers in the community have always maintained that you are not... will you take on the challenge?? (If you score 0 because you dont designate enough stocks...you are a coward..if you do participate....you could lose...grin). I think that many of the existing high ranking players would make room for 25 SP picks within their existing list. It will be difficult not to do it! That also means that we channel their collective intelligence in the direction of a specific and very high infosight value.

19. Most importantly we could use the new SP-ranking to generate publicity and attract a massive amount of new players.The Caps community hereby challenges the best stockpickers of the world to come and compete. The Caps community hereby offers everybody the chance to become one of the world leading stockpickers.(Etc.Etc.)

20.In a similar fashion, slowly over time, a handfull of rankings could and should be added.

fransgeraedts

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#9) On May 13, 2010 at 7:34 PM, BlackshearCaptL (< 20) wrote:

I recently signed up for Covester because I thought it was pretty neat.

Although I'm not saying caps should go to THAT extent, I think a mock portfolio, portfoilo tracker (I think you guys use to have one of these) or a more pragmatic system would greatly benefit many of  the users.

I really like ZZ's suggestions.  Down with accuracy - it just makes the caps game into a huge time sink.

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#10) On May 13, 2010 at 7:35 PM, portefeuille (99.56) wrote:

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Accomodating the specialist; innovating caps

August 23, 2009

1. I see Caps (as many others, including its founding fathers do) as an experiment in collective intelligence, as a way to produce information and insight.

2. I am therefore not bothered by a lack of "realism" of certain aspects of the game, certain styles of play, certain strategies and tactics used. The question to ask is what kind of infosight is produced by them.

3. When thinking about innovating CAPS i am therefore not thinking about making it more realistic or more "fair", i am primarily concerned with way's to produce more and better infosight  -and of course with the pleasure of playing.

4. In earlier blogposts i have made suggestions about the way both "stockpickers" and "macroplayers" could be better accomodated and datamined. In this post i will concentrate on the accomodation and datamining of the "specialists."

To recapitulate.

5."Stockpickers", that is people who are very good in picking long term winners on the level of individual stocks-companies, cannot win in Caps. (They will always lose against "redthumbers" and "macroplayers") However the infosight value of their picks is very high. It is certain that we do not mine effectively for that value at the moment. Even more damaging would be to lose those players completely because they leave Caps out of frustration. That risk is real.

6.As a solution I suggested to create an extra competition-ranking.In that extra competition/ranking people should at all times have at least 10 and no more then 25 greenthumbs. Redthumbs are not allowed. You will only be ranked from the moment 10 or more of those stocks have been held for 6 months or longer. If the amount of stocks held longer then six months at any time drops under 10 you drop from the rating. The scoring should be the same as in the existing competition/ranking.

6a. Participants should be able to enter into the stockpickers competition in two way's. They could create a specific "pickers" list, or they could within their existing list designate the greenthumbs they want to enter in the "pickers" competition. All lists could then be simply entered in both competitions-rankings and their scores displayed on the same page.

6b. I think that the choice of a certain stock by the best players within the stockpickers competition should of course get a greater weight in determinating the star-rating of individual stocks.

 7. My suggestions for the macroplayers have followed the same lines. Macroplayers in effect make sectorplays, based on macro-ecomic reasoning and/or technical analysis. While they can win in Caps, the way Caps works (try red- or greenthumbing 50 stocks late at night) can be very frustrating for them. (That is getting better, by the way) More importantly we do not mine the infosight of their strategic choices at all. I suggested as a solution a competition/ranking based on etf's. At all times between 10 and 25 etf's should be held. Only "single" etf's are allowed. Both red- and greenthumbing is allowed. The scoring is the same as in the existing competition/ranking.Again it should be possible to enter into the competition with a specific "etf" list, or by designating etf's within the existing overall list. And again all lists could be entered in all competitions-rankings at once. On the basis of all etf picks in Caps a star rating of sectors should be aggregated. The choices of the best players in the etf competition of course should weigh more heavily.

A new suggestion.

8. There is a third group of players, a third style that could be better accomodated. I call them the specialists. The archetype of course is floridabuilder. But other good examples are for example ZZlangerhans, or BuyingRetail. Those participants bring a deep knowledge about a certain industry to the table and are willing to translate that knowledge into redthumbing/and or greenthumbing the stocks of companies within that industry. The infosight value of their picks is extremely high. However Caps frustrates their style the most. Floridabuilder's early succes masked that fact. His industry was leading the stockmarket down. Therefore his redthumbing of builders could be translated in a high Caps score. Usually that is not possible. And of course we dont mine the value of their choices at all. In their case the solution would be of course to measure their picks not against the S&P, but to measure them against a specific index. ZZlangerhans should be measured against a biotech index, BuyingRetail against a retail index, floridabuilder against a housing index.. Again it should be possible to enter with a specific list or by designating stocks within the overall list. Minimum of ten at all times, no limit on the amount of stocks. Red and greenthumbing allowed. The competition/rating should pitch all specialist against each other. To prohibit a proliferation of indexes to measure against, and the "gaming" that would make possible, we should build this feature out slowly. It should be possible for all Caps participants to vote on the indexes specialist could measure themselves against. That would make it possible to gauge the desire for certain specialist info. Of course specialist could plead their case in their blogs. If however after a certain amount of time not enough people would compete against that index, the possibility of doing so would end. In that way i think we would create a handfull (maybe more) of specialist area's where industry-specific info would make all the difference. (Of course the stockpicking of the best specialist should once again weigh more in the rating of individual stocks.)

fransgeraedts

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October 19, 2007, Innovating Caps; a reflection in answer to a post of hall9999

October 20, 2007, Innovating Caps (2); a continuation of a reflection in response to comments by TMFBreakerDave

August 18, 2008, Innovating caps (3); macroeconomics and sector bets; accomodating the style.

September 06, 2008, innovating caps (4); making better use of blogs; accomodating macroeconomics & sector bets

September 08, 2008, Innovating caps (5); playertags and an ETF based ranking; harvesting information on macroeconomics and sector bets; i

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#11) On May 13, 2010 at 7:52 PM, portefeuille (99.56) wrote:

5."Stockpickers", that is people who are very good in picking long term winners on the level of individual stocks-companies, cannot win in Caps. (They will always lose against "redthumbers" and "macroplayers") However the infosight value of their picks is very high. It is certain that we do not mine effectively for that value at the moment. Even more damaging would be to lose those players completely because they leave Caps out of frustration. That risk is real.

very true.

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#12) On May 13, 2010 at 8:20 PM, portefeuille (99.56) wrote:

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October 19, 2007, Mission Statement - Fewer clients. Less money.

...

  Is someone with 5000 points a better stock picker than someone with 500 points?  If they do it over the same time frame and with the same number of picks then yes.  However people start at different times and have different numbers of picks.  Not only do new players need to pick a lot of stocks to catch up but they also need to take more risks.  A good player can achieve high accuracy pretty quickly but points take time.  Without a fair way to compare players that overall score benchmark will just get farther away from new players as time goes on.  Anyway, I'm not trying to say you shouldn't try to get lots of points.  You should just do it with a number of stocks that you can reasonable keep track of.  And there's nothing wrong with taking risk.  Since this isn't a real life portfolio that is tied to your level of assets and when you plan to retire then the consideration of risk only applies to your goals for CAPS and to what stocks move you to provide some input.  But as time passes and overall scores get higher, picking risky stocks to hit big winners becomes a necessity for new players to catch up.

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and, again, nothing has been done to fix this issue. is it so hard to calculate a reasonable "annualised average return" (or "average annualised return") ...  

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#13) On May 13, 2010 at 8:41 PM, portefeuille (99.56) wrote:

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Pitch by: ntmf 3/03/10 1:23 AM

This is my 8th outperform pick for PALG. I have also made 9 underperform picks. Just harvesting accuracy credits and about 385 points so far by playing the bouncing stock price. Even if this is my last pick and is wrong, I will have a 94% accuracy for PALG. I hope my final pick is a thumb-down, because it will probably be at zero then!

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is that really what the staff wants ...

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#14) On May 13, 2010 at 8:46 PM, portefeuille (99.56) wrote:



enlarge

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#15) On May 17, 2010 at 9:27 AM, LawfordCap (99.89) wrote:

I would love to see SECTOR RANKINGS.

I am sure many people would love to specialize and focus on being the best in a particular sector.

Sector rankings may also encourage people to form collaborative groups.

Some form of beta rating on a score would be great as well (Sharpe ratio). 

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#16) On May 19, 2010 at 3:45 PM, miteycasey (35.10) wrote:

You can click 'top ten' under the CAPS community tab to find most of the information you are looking for.

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#17) On May 26, 2010 at 12:38 PM, biotechmgr (36.50) wrote:

"Don't you people have homes?

-- Judge Smaels

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