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portefeuille (99.44)




May 21, 2009 – Comments (5)

something on this "contrarian" issue (see this post):

One thing that I found somewhat annoying and disturbing was that my "Average Pick Rating" (apr) has always been at 4 stars, at least since I first looked at it. The annoying/disturbing aspect of that has been that I would have liked being the "caps" game outsider who is catching all those "falling knifes" and really "unpopular" stocks right when they turn (some sort of master of bottom fishing ...).

I just noticed that my apr is now at 3 stars. Yeah, baby (you see that it does not take much to "put a smile on my face") ...

Of course (OCD and curiosity going astray and all that ...) I had to check what the apr of some other players was. I started from the top of the ranking system. And I may have actually found something new and maybe not entirely uninteresting (see comment #63 here)).

The system I found breaks down somewhat beginning with trimalerus who is currently ranked #26.

But all players in the top25 (not mentioning them because they are of any importance (see comment #29 here), but because I started at the top) either have an apr of four stars or ...

or they might be in the group of "contrarians within the 'caps' game" (see comment #3 of this post).

They are (apart from my players portefeuille, hdgf2 and hansschmidt): ultralong, fransgeraedts, bullmarketn09 and tigerpack. They all have an apr of 3 stars. And you might want to have a look at the point score graphs for those players: 1,2,3,4,5,6. I think they show a certain similarity.

Well, not that exciting all that, but now that I have written it I might as well "publish" it ...

5 Comments – Post Your Own

#1) On May 21, 2009 at 7:48 AM, portefeuille (99.44) wrote:

Average pick rating is the average stock rating of a member's active picks. Underperform picks are flip-flopped, so a underperform call on a one-star stock is treated like an outperform call on a five-star stock. This rating reflects how closely your picks are aligned with CAPS ratings.

(from here)

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#2) On May 21, 2009 at 8:31 AM, portefeuille (99.44) wrote:

I think the apr of my picks is closer to 2 stars if you take the average of the "ratings the 'picks' had at the time the corresponding call was made" for all "picks" (giving you apr_new), not of the "current ratings" of "active picks" (giving you apr).

apr_new = 1/(number of all "picks") * sum_(all "picks") (r_i (t_i)),

vs.  apr = 1/(number of active "picks") * sum_(all active "picks") (r_i (t_now)),

where r_i (t) is the rating of "pick" i at time t, t_i = time, the call on "pick" i was made, t_now is the "current time".

I think apr_new is slightly more interesting than apr. Both are not very interesting ...

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#3) On May 21, 2009 at 9:35 AM, TigerPack1 (99.07) wrote:

The easiest way to get a score above 90 is to red-thumb a basket of one-star stocks in CAPS, since its inception three years ago.  I believe the even has a CAPS player of all the 1-star picks in the game listing the group's overall performance.

So far this group has been the mainstay of crumbling business models, excessively leveraged companies and sharply underperforming stock prices.

Many of the top players have done this, either knowingly or unknowingly, during a massiver bear market sell-off, and I would EXPECT the most unloved stocks to tank during a major bust in stocks generally.

[The flip side is that ultra-popular 5-star picks do much better, during a boom move, like in commodities during the first-half of 2008.  Further, if CAPS had been around in the late-1990s, I am positive it would have been littered with Technology stocks that were flying higher, year after year.]

Still, I have to give the some credit in this respect, as the one-star rated stocks have done horribly the last few years vs. the market in general.  My guess is that as groups their 5-star ranking macro system will show layers of performance similar to the successful and similar 5-tier "Value Line" system that has been around for 50 years.

Otherwise, I don't pay much attention to the star ratings of my picks or to people like Cramer on CNBC (although I would prefer he not like the stocks I am picking).

I am definitely a contrarian, as mathematically speaking, if stock market gains were easy (just picking 5-star stocks for example), EVERYONE WOULD BE RICH.  I personally don't know any person who became filthy rich as a direct result of trading stocks, although many have gotten rich by saving money and investing capital for several decades into stable, growing businesses, either privately or publicly owned.


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#4) On May 21, 2009 at 11:32 AM, anchak (99.86) wrote:

Hans.....did you see my comment on walt's blog ( # 11) ? That was a really good paper by the way. Maybe pick your brains about the options put forth over there. I have tried the VIX play - but need a mathematical construct to do it properly. ( also see #10 about being delta positive due to VIX direction).

You have done a great job of hedging here - I was tracking your movement into Healthcare as a defensive ploy - seems to be working great. I will need to look at the  Healthcare spider and see where its at.

Keep it up!


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#5) On May 21, 2009 at 12:05 PM, portefeuille (99.44) wrote:

No, I had not seen those comments. I would have to look at the paper again. You should really continue your options series. I am much better at commenting than I am at answering questions (in commenting you can choose your own questions / aspects ...).

Actually I am not quite satisfied with my hedging because I seem to have hedged myself out of business ... the times with a volatile score line where more fun! I will keep the health care stuff, but end the inverse ETF calls soon. 

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