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DLZtheBestOf (< 20)

Explaining my Best Of portfolio...(so far so good)...



November 07, 2010 – Comments (3) | RELATED TICKERS: LVS , FOE , HL

I just want to bring to your attention that this portfolio of mine has finally come out of red.

My score today: 16 points. WOW.

As you can see it below, this is the first time ever that this portfolio got over zero since it was started back in May of this year.

I know what you are thinking. That is nothing to brag about, right? And I do agree with you. Pretty bad, actually.

However, let me tell you a little bit more about this portfolio.

As I mentioned it in my first post Is There an Investing Holy Grail, this portfolio was on purpose started during a very brutal correction that started in April of 2010.

I wanted to prove two things:

1. The correction we were experiencing at that time was just that - a correction. Not the begininning of a double dip as many were predicting. (In the above linked post you can see that I even said: Market will come back strong. Very strong).

2. A portfolio of good stocks, even if started at the beginning of a brutal correction (I was expecting DOW to go down to 9,000) will still outperform the market.

Basically, my goal was to show that you don't have to time the market (and make a correct call) in order to make money during a bull market. Dollar-cost-averaging and long-term investing still work. Of course, you need to know which stocks to pick - You don't have to be 100% correct with your picks, but you do need to have a decent accuracy.

Now, if you take a look at my portfolio by clicking on the Quick Stats tab, you will see that this portfolio still has a lot of work to do to prove my #2 thesis as correct. As I said above, my score is only 16, and my accuracy only 45% at this time.

However, you need to understand that this portfolio was at negative 1,700 points just 2.5 months ago, and at an accuracy of only 12%. And as soon as the market reached the new high for the year last Thursday, this portfolio started outperforming it (+16 points is still 16 points better than the market).

Having said that, just slightly outperforming the market is way, way, waaaay below my goal.

I started this portfolio with a goal of having a 99+ rating and 90% accuracy. It's a lofty goal, but I still believe I can achive it. It will probably take a year, maybe two, but I think I can get there. And that is without adding any new picks, and without closing any (other than closing picks of companies that get aquired - like I did with AAI, ACF, CAL, and GNA).

So far, the only dog (a stock that won't come back) in this portfolio of 200 stocks is WL, which is down 74% since it was picked for this portfolio. All the other ones are down 35% or less, which I think is no problem for "explosive" and low-priced stocks like my picks: RAS, SNV, MI, MWA, ODP, etc.


There is one more thing I'd like to tell you about this portfolio. As all picks in this portfolio are based on either my eleven twenty-one or my three-ten method, in July of this year I decided to create another portfolio that would include only stocks that fit both of my methods (something like All Star picks).

Only 38 stocks made the cut. As I believe my BestOf portfolio will have at least 90% accuracy, I thought these 38 picks should then achive an accuracy of 100% with no problem (being Creme de La Creme picks).

Here is a link to my 100prcntAccuracy portfolio.

As you will see, this portfolio already has a Real-Life accuracy of 90+%: only 3 stocks out of 38 are lower than the price at which they were picked at (just like BestOf portfolio, all stocks for 100%accuracy portfolio were picked on the same day - no new picks, no closed picks).

I'm sure you will also notice that 100%portfolio already has two doubles: LVS and FOE, and four more with returns over 50%. The only 3 picks that are losing money are down only 6, 7, and 12%. I think that's pretty good (the summer correction lasted almost two more months after 100% portfolio was created). 


So that would be it for right now.

I just wanted to somehow mark this special occasion of my BestOf portfolio getting above 0 score (and above <20 rating).

I know that there is always a possibility that the market might start taking another dive tomorrow, and I know that my portolio will most likely follow.

However, that doesn't bother me at all. I'm an investor. And I'm in it for the long haul.

Good Luck Everybody!

3 Comments – Post Your Own

#1) On November 08, 2010 at 1:13 AM, Valyooo (33.72) wrote:

+1 from me, the guy you promised to reveal your secrets to if you hit 99+ :)

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#2) On November 08, 2010 at 6:08 AM, dragonLZ (89.53) wrote:

A promise is a promise... :)

Thanks Valyooo.

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#3) On November 08, 2010 at 5:07 PM, dragonLZ (89.53) wrote:

HL jumps 13% today, and last night it was included in the 3 related tickers for this post...

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