Diary of a juicer
October 17, 2007
– Comments (2)
It's confession time, boys and girls. I'm new here, but it didn't take long for my ultra-competitive (and somewhat sinister) side to figure out how to game the system. I'm a very sincere person, though, so I'm willing to tell everyone that I am using a technique that I'm almost certain the makers of CAPS didn't have in mind when they set up the ratings system. It's like juicing. Here's how it works:
First, put an underperform rating on stocks that look headed for severe losses (as I'm sure you would anyway). Particularly stocks where the southeastward trend is most likely to be uninterrupted and the potential for recovery is most speculative - i.e. subprime lenders. Next, when you have 5+ points on your pick (enough to get credit towards your accuracy rating), end your pick. Finally, repeat the above process to the greatest possible extent. Your accuracy rating gets a huge boost, and as long as you do this with only underperform ratings on stocks headed for zero, your potential gain is essentially unchanged (99.2 vs 99.6 or whatever).
Right now, I am on my second red thumb pick for a large number of homebuilders and VG, and I plan to do the same with subprime lenders. I will continue this shameful practice until I cannot, or my accuracy rating exceeds 80%, whichever comes first.
Is that like a baseball player taking steroids? No, because my body is not at risk and there's no real money at stake. Does it dishonor the spirit of CAPS? It very well might. I am waiting for Dave G or another CAPS elder to say something about it. Until then, keep juicing your accuracy.
P.S. You can do the same with outperform picks, but I haven't for some reason. I don't know why not.
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