mack316 (< 20)

mack316's CAPS Blog

Dad's RL Portfolio Performance - My RL Portfolio Performance - Crazy $$$ Gambling

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March 02, 2010 – Comments (9) | RELATED TICKERS: G , AM , BLE

Like father, like son. Right?

Ken's 4 Year Old Portfolio

My father started investing in April 2006. He had one main tool in his arsenal - Motley Fool's Stock Advisor. Stock Advisor promotes investments into long term buy and hold companies. My father is 50 years old, and it makes sense why he would follow this path. Check his real money results (exported in .CSV Format from Scottrade and imported into Google Finance):

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As you can see, his investments have all been based around Stock Advisor picks. $42,000 has become $60,000 with an average return of 42.92% in 4 years. Not too shabby. Kudos to David and Tom for the help.

My Short Career

I heard about Motley Fool through my father in the beginning of this year, 2010. It just so happens that I have a hefty amount of cash on hand to work with and wanted to take the opprotunity in 2010 to make more out of it. I followed suit, and on Jan 19, 2010, I made my first investment, into a Stock Advisor pick, Netflix. See my real life long-term portfolio.

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As you can see, my long term portfolio consists all of Stock Advisor picks(sans Under Armour) with a starting investment of $5,000 each. I will continue to open new positions for $5,000, and slowly add more $5,000 positions in stocks I already hold.

I'm up $2,500, 3.83% in 40 days from $60,000. This doesn't mean much, but I'm happy to be in the green.

The Crazy Gambler

I'm 22 years old,and like to gamble - It's a good thing I run good at life.The Stock Advisor strategy is not condusive to gambling. The picks I will choose here are solely from what I read from others on CAPS. My simple strategy so far has been to only pick stocks that were recommended by atleast a couple of the best players on CAPS. Questions I ask myself when finding these picks:

What are BravoBrevo's favorite stock picks?

Did bullishbabo pick this stock?

What did UltraLong say about this pick in his 'Ask a Blunt Man' blog?

What has tenmiles, chk999, gtrinvestor and TSIF had to say about this stock in their pitch?

Are there any intriguing pitches from other CAPS members?

What do the CAPS players who dislike this stock have to say?

Anyone say anything worthwhile on SeekingAlpha?

I should improve on this tehcnique as I become more familiar with other valuable CAPS players. For the time being, so far so good.

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If you pay close attention you will see I have $67,000 invested in one of my short term picks. I've maxed out my margin account on the 'golden pick' I find from learning from the other CAPS players. Talk about risky?

So far I have a received a return of 4.32%, then 9.13%, and now in the middle of another short term pick currently on a return of 1.93%. In 40 days, I have made roughly $7,000. Again, doesn't mean much with such a short career, but I'm happy to be in the green - optimistic and confident :)

Risk and Reward

I'm 22 years old.

I have $65,000 in long term investments through ideas from Stock Advisor.

I have $65,000 on margin, in short term investments, through ideas from the best CAPS members.

I started with $60,000 on Apr 19, 2010

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Now the only question is, how long will it take for me to crash and burn?

9 Comments – Post Your Own

#1) On March 02, 2010 at 3:05 AM, mack316 (< 20) wrote:

Correction, I started on Jan 19, 2010.

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#2) On March 02, 2010 at 3:22 AM, SUPERMANSTOCKS (50.52) wrote:

Stay away from JOEZ!

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#3) On March 02, 2010 at 9:37 AM, BuffetsMentor (20.82) wrote:

why the hell would he stay away from joez?

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#4) On March 02, 2010 at 9:47 AM, SUPERMANSTOCKS (50.52) wrote:

JOEZ has been dead money for a long time. I will make a good suggection for you. TLAB or NPD. Inexpensive and both make $$. Don't get me wrong JOEZ makes money. But jeans are like Brittany Spears, they wear out the welcome mat and FAsT!

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#5) On March 02, 2010 at 9:55 AM, mack316 (< 20) wrote:

With JOEZ, I played the news of them opening stores. If I were to gamble with them again, there'd have to be something significant going on.

I'll add TLAB and NPD to CAPS for further DD. Thanks!

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#6) On March 02, 2010 at 10:00 AM, SUPERMANSTOCKS (50.52) wrote:

Chipotle is opening stores...Check them out

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#7) On March 02, 2010 at 5:08 PM, TSIF (99.95) wrote:

RE: JOEZ Past performance is no guarantee of future returns. One should always ask of any equity one has been holding or intends to buy...what have you done lately. Stagnation does not make for good investment returns. Joez is a tiny with no history of being innovative. The new stores show a change in vision. Whether they can carry it out or not remains to be seen. Don't under estimate teens and their jeans.

Disclosure: I went LOONNNGGG Joez last week.

Mack: Thanks for the callout. Careful with too much in one basket! You're young, you're mixing your investments up and you understand risk (the market is a gamble), so a little stretching in one area might not be a bad thing, but half sounds like a little much in one basket!

Sounds like you do well, just be careful who you use for advice... :)

I believe you understand that many of us, especially Bravo, will play some low volume equities on a quick snap. They are not Real Life investor grade. You can't keep up with Bravobevo, or some of us on short term calls made as a CAPs play. Some of his calls are great RL examples, some are quick CAPs calls. By the time you see he made the call, it's too late to follow or you may not time out at the right time on the exit.

All in all though, a half dozen to a dozen Fools for friends who churn up things that are similar to your own values is the best thing about CAPS. No one can be everywhere, and besides the newsletters your DAD followed religiously, ideas from like minded Fools are what CAPS is all about.

Good luck!

TSIF (The Sky is/isn't Falling, at least Today.......)

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#8) On March 03, 2010 at 11:47 AM, mack316 (< 20) wrote:

TSIF,

So glad you commented on my blog! Lots of respect for what you've done for the community. I will definitely make note of your advice. I understand now that ideally i'd have my short term investments spread amongst 3-4 different stocks instead of just one.

Then I also think, what does diversifying really do in the short term? It reduces variance. Mathmetically speaking, if variance is not an issue, if I am comfortable with the possibility of taking a 5-10k hit with one of these investments, and I have more money to play with incase this does happen, then would it not be optimal to pick the stock with the highest risk vs. reward?

In regards to 'play[ing] some low volume equities on a quick snap' - I do understand this concept - and came to understand it just recently with a blog post fransgeraedts wrote titled 'On BravoBevo; deep admiration and deep puzzlement'

What I have been doing, for what it's worth, is tracking BravoBrevo's 'favorite picks' which he marks with the dollar sign. I appreciate any top CAPS players who make use of this feature as it saves time in research. Him marking a fav pick tells me 'something is really up here.' This may be a wrong interpretation, but so far so good.

Right now is a good time to be gambling - as my portfolio has appreciated another $3,000 since the start of this blog post.

I can't wait to report some losses as to add some valuable reality to this gambling scheme.

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#9) On March 03, 2010 at 12:01 PM, TSIF (99.95) wrote:

Good comments mack316. "what does diversifying really do in the short term?"

Yes, one equity that goes "big" is worth several that are mediocre, but the inverse of your example is true as well.

Only having one means a large loss and little ammo to fight again another day, although I do see that you feel you can reload outside the the "game" returns if you are dealt a bad hand.

Having several means that your chance of success is that much higher overall. I would rather have one out of five go up 20% than have only one that did nothing or lost.....

In Poker or Blackjack, you will get bad hands. You need at least 10x the big blind in Poker to ride through the bad hands and 20x in blackjack to get a rhythm going. The market is much like gambling. Sometimes you can ride out a bad hand, but your funds are then tied up doing little for you.

I agree the $$ is a huge part of CAPS that's underutilized. The moderators are working on programs to give more incentive to using the $$. Another clue that I'm either playing one or doing more research on one is a lack of a pitch. If I don't get one in 2-3 days after I pick it then it means I'm still studying it, or I found more data that makes it a bad call. I'll ususally then pitch that I goofed! :)

Gambling, patience, diversification, good stuff at your age, but tricky to find the mix. I'm certainly lacking in patience, but getting a little better. The problem is that as in your example about your Dad, the current market is so volitile that it makes investors lose focus. Boring would be a good thing! :)

Good luck!

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