Ellipsis
April 04, 2009
– Comments (10) |
RELATED TICKERS: SU
, MTRN
here are two pieces of advice you may not want to follow:
i) "never catch a falling knife"
ii) "never throw good money after bad"
I have given "outperform" ratings almost exclusively to stocks that would be considered "falling knifes" at the time and ... it worked! (I think I am in the top 10 considering only points scored via "outperformance calls" (maybe #1, but that is hard to tell (see here ("the "caps" staff is working on it we are told (see here (comment #1 by tmfjake))))))
In 18 cases I have ended an "outperform" call that was "in the minus" and "reinstalled" that "outperform" call the same day or the next day. I consider this the "caps" way of "throwing good money after bad" or "doubling down". You increase your risk because now you can incur losses of more than 100%, a pleasure that is otherwise a privilege of "underperform" calls in the "caps" game (if you ignore the benchmark thing ...). Your upside is in "lowering the basis". This has worked out in 17/18 cases (make that 18/18 if EK has risen to more than $4.51 by the time you read this - it closed at $4.37 yesterday).
I guess the more important point is the first: DO CATCH FALLING KNIFES!
Some more knife catching is done by my "portefeuille unleashed" player (see here).
My somewhat more "conservative" (and pleasantly quiet) player is mantil (#3 "yes man" (no short-ETFs !)).
portefeuille would be #1/28950 in the "yes man" category overall and by score points (without using short-ETFs, so it IS possible to win that category playing "purely outperform" ...) had I not made 1/588 "underperform" call.
(BUT YOU JUST HAVE TO RATE VW UNDERPERFORM!!!)
My "still higher beta" players are hdgf1 and hdgf2 (currently #5 of the "new players" and #77 overall, only stock-outperform and leveraged-short-ETF-underperform ratings).
What I am trying to say is, I guess, that my players have done Alright listening to neither i) nor ii).
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