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March 30, 2009 – Comments (41)

Did someone already write this post? Hopefully not. I’m still a little young to be the guy who tells you the story that you just told him yesterday. This is an attempt to coalesce in a thread some thoughts that highly contributing members have had about improvements we would like to see on CAPS. TMFJake, I’m aware you are on the case and I appreciate your efforts. But after the last “upgrade” I think it would be best for our preferences to be on the record before any changes are made. For those of like mind, please keep comments on point so that we can maintain this thread and eventually arrive at a mutually satisfactory slate of prospective improvements to present to TMF. As attention spans are short, I’m going to make the suggestions first and then rant afterwards.

 

I. A screening tool to identify players that outperform according to individualized standards. Leave the rating system as is, just allow us to search within it for our own purposes. Stock and member screeners are already in place, unfortunately the data inputs are generally useless (risk tolerance??). My personal preference would be to look at score only, isolating outperform pitches on non-OTC stocks and eliminating the S&P comparator. I could go either way on leveraged ETF’s, but I’d definitely like the option to eliminate red thumbs on unshortable ETF’s

a. Option to isolate green thumbs or red thumbs

b. Option to eliminate .OB and .PK

c. Option to eliminate accuracy

d. Option to eliminate S&P comparator

e. Option to eliminate leveraged ETF’s

 

II. Make CAPS more friendly to those of us who like to write about stocks of actual companies, and easier for us to find each other and read each other’s work. Many of us follow sectors or a small collection of stocks and they are like our naughty, misbehaving, unpredictable children.

a. Emphasize comments, or provide preferences to see more comments on the stock page. Raising the comments and moving the news down to the bottom would be an improvement. I come to CAPS for collective intelligence, not comprehensive company data.

b. Put rec boxes back in the top bull/bear spots.

 

III. We want to be score leader on our pet stocks. Our ratings will inevitably plateau if we don’t resort to playing games with the scoring, so we want to be able to compete for something.

a. Change the leaderboard to reflect the players with the top cumulative scores across all their picks, the way that the score leader is chosen. We don’t care so much about that guy who randomly picked it at the low point two years ago because he liked the ticker symbol and racked up a double. I want to know the guy who got positive scores on it up and down nine times in a year.

b. Add a score leader ranking. Who are the score leader leaders? 

 

IV. Clean the game up just a little.

a. Why can we cancel picks during the 20 minute delay? I understand the delay, but not the cancel. You’re encouraging people to sit in front of their computers all day picking and canceling as they feel for a high or a low. My brokerage won’t let me do that, and I don’t really want to do it on CAPS either.

b. It’s irritating and misleading to see stocks that blew up maintaining 5-star ratings while they trade in pennies, because they’re under the threshold and there’s no incentive for anyone to close their outperform picks (if they’re still even around).

c. What’s the point of having a player score graph that only goes back a few months? If you can’t take it back to inception you might as well put that space to better use.

d. There are not 66000 people playing CAPS. People who were here for a week in 2006 shouldn’t be in the ratings. If they haven’t picked or blogged in three months, they’re most likely gone, let go. Send them an e-mail, if they don’t answer cut them out of the ratings. I don’t want to be an “AllStar” in a game where the journeymen all retired last year.

e. People who only registered to pump or flame and don’t even have picks shouldn’t be among that number either. They also shouldn’t be allowed to post anything if they’re too lazy or insecure to rate the stocks they’re yapping about. Let them stay on Yahoo.

f. Is there any way to fix the lags and errors that plague the scoring? If you’ve tried and you can’t, that’s OK. But it’s annoying to finally close a pick after a year with a 7.8 score and see it show up in the Ended column as a 4.9. I know, I’m the guy who doesn’t think Accuracy matters. But still …

 

And now the rant …

 

I come to CAPS to practice virtual investing in actual companies, and to read pitches and blogs by those who do that much more skillfully and profitably than I do. In return, I’ve contributed everything I could as I have learned, and I’ve been as honest as I can about my limitations and errors.

 

What could be better than being a top 10 ratings leader on CAPS? Actually, just about anything. Not the least of which would be if CAPS helped me make actual money in the market.Unfortunately, the current system fails to identify players who can be followed into outperform picks with real money with any expectation of not losing one’s shirt. High ratings themselves are particularly unhelpful as predictors of success, although the low ones are fairly useful as predictors of failure. When I first joined CAPS I took the word of anyone with a rating over 99 as gospel. Once I hit 99 myself and climbed as high as the 99.7’s, I continuously had to raise that bar as I was painfully aware of my own inability to grow rather than vaporize my own brokerage account. Eventually I realized that CAPS rewards longevity and obsessive-compulsive disorder far more than it does the ability to make money in the market.

 

Can CAPS identify true outperforming investors for those of us that want to follow them into long investments in real companies, where we can actually buy shares at their CAPS start price? It is very possible that it cannot. After all, those investors are a small minority, and why would they waste time on CAPS or any other stock site when they could be quietly enriching themselves? Then again, maybe they are out there, maybe they’re very proud of themselves and want everyone to see what they can do, or maybe they just want to share. But if they are in CAPS, most likely scattered around the top 200, I want to find them. 

 

Apparently, there are some who believe that CAPS was not designed for this purpose and we are somehow misusing the system by seeking such a benefit from collective intelligence. If so, please carry on as you were. Our requests should not affect your CAPS experience in any meaningful way. If you feel compelled to write a “Love it or leave it” type response, I would encourage you to conserve energy and move on to another blog post instead. To the highest-rated, I don’t intend to denigrate your efforts. Some of you would certainly be among the highest-rated on my individualized list as well. But it’s been a rough couple of years and I’m ready to make a little money. Past performance may not guarantee future results, but I’m willing to weigh that risk. CAPS, are you ready to help?

41 Comments – Post Your Own

#1) On March 30, 2009 at 10:57 AM, portefeuille (99.61) wrote:

perfect!

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#2) On March 30, 2009 at 11:18 AM, Gemini846 (46.67) wrote:

There really does need to be a system to reward or at least remove the penalty for closing negative picks. I really hate the lag, the PK issues et too.

I'd love to see the accuracy be an agrogate of all your picks on the stock like score leader. You're either + or your - not getting 10x the accuracy because you re-shorted after a week knowing it was going to tank again.

I disagree a little bit with penalizing score leaders because they picked it low. Sure some of them got lucky, but you could say the same thing about Warren Buffet.

This disconnect is one of the issues with this site. TMF generally promotes a longer term investment strategy in its articles but here many of us swing trade or day trade and our picks reflect that with the exception of the "long Term" charm and usually the bomb.

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#3) On March 30, 2009 at 11:26 AM, CBombay (28.63) wrote:

Awesome.  I've often thought about most of these and agree.  I'll add one.  Then comment on a few of yours. 

 

(1)  I would like to see a statistic for each player that shows, or somehow relates to, average hold time.    This accomplishes two things:  (a)  It helps me better analyze annualized returns for players.  (b) It helps me find and follow players with specific trading strategies and avoid those who may have different goals.  (i.e., long-term investors versus short-term traders).

I could go on about this, but I think, you get the idea.

 

Regarding some of your points:

1.  Players who haven't traded that fiscal quarter don't get compared in teh rating system.  Please keep their profiles, but change their rating to N/A and eliminate them from comparisons.

2. Player screener.  Add mkt cap.  I don't need numbers, but grouped into micro, small, mid, and large cap would suffice.

 

3.  I actually like the player score graph and time frame.  What happened nine months ago doesn't really matter to me.  But, again, that is probably because, I am a short term trader.  I can see how investors with different time horizons would all select a graph with a different x axis.

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#4) On March 30, 2009 at 11:34 AM, CBombay (28.63) wrote:

One last thing.  Green/Red Thumbs don't mean much.  Can we get some sort of Average Pick Beta for active picks.  I'll explain this.

A green thumb on SKF would be about -2

A red thumb pick on SKF would be about +2

Green bgu +3, red bgu -3. 

Reasoning.  I can't really tell much by counting a player's green and red thumbs since their are so many negative beta trading vehicles.  By computing the average active pick beta for a player, I can tell the player's current market sentiment right away, and if it changes from month-to-month.

 Thanks!!!

ZZ, love your picks.

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#5) On March 30, 2009 at 11:41 AM, StatsGeek (29.37) wrote:

Good comments.  My opinion on the stock picking threshold is that it should be based on average trading volume, not market cap or which exchange a stock trades on.  Let us pick .pk and .ob stocks but only if they trade 20k or 30k shares per day.  That would eliminate most of them right off the bat.

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#6) On March 30, 2009 at 11:53 AM, EverydayInvestor (< 20) wrote:

If TMF wants to stop counting lowly OTC and PK stocks for CAPS scores, that is fine ... but we should still be able to pick them, because our pans of those crappy companies can help to warn investors. For example, CAPS ratings of MXFD.ob show up as the third link on a Google search of "Maxlife Fund Corp".

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#7) On March 30, 2009 at 11:57 AM, Alex1963 (28.57) wrote:

Hey ZZ

Good post as always!

Why do you discount accuracy? That is one of my top criteria for selecting favorite players, altho I admittedly still don't get all the intracies of the scoring.

I wish you could simply input "unratable" stocks. Not being able to do so forces me to maintain watchlists elsewhere which is a pain. Today I had wanted to rate Taseco Mining-TGB which was a MF rec last week for pete's sake, and JJC a copper ETN. No luck.   

Thanks! 

Alex 

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#8) On March 30, 2009 at 11:59 AM, gonelong (36.90) wrote:

CAPS draws in those people that are driven to succeed, and most of those people want you to know about their successes.  Therefore, we get high quality blogs here.  I come mostly for that reason.

At best, CAPS score itself is completely worthless to the average Joe.  It doesn't tell me anything about which investor/players are succeeding given similar parameters to mine such that I can focus my attention on their theories/practices and hope to learn something useful to apply to my situation.

At worst, the CAPS score is highly misleading to new users who have yet to figure out the rules of "the game'. 

I appreciate what TMF did to get this off the ground, but it is badly in need of a makeover.  The obvious issue is that you will pretty much have to reset everyone's score if you do so (to be fair to new players) and in that process we will certainly lose some of the top players.

GL 

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#9) On March 30, 2009 at 12:15 PM, FleaBagger (28.28) wrote:

Are you still bullish on LGND and VPHM?

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#10) On March 30, 2009 at 1:40 PM, portefeuille (99.61) wrote:

The ability to "cancel picks during 20 minute delay" can be misused quite easily.
Consider the following:

create a new player.

use the following "script":

n = 200
WHILE n>0 DO
BEGIN
give "outperform" ratings to the n stocks/ETFs ratable in "caps" that display the highest short term volatility at that particular moment.
get real-time quotes for these n stocks/ETFs and the s&p.
wait for 19 minutes (just to make sure ...).
get real-time quotes again.
calculate o_i := outperformance of stock/ETF i.
FOR i = 1 to n DO
BEGIN
  IF o_i < THRESHOLD1 DO
  BEGIN
    cancel the pick for stock/ETF i.
    counter := counter + 1
  END
END
n := counter
counter := 0
END

For a THRESHOLD1 of say 5% it should not take more than a couple of hours for the portfolio to fill with 200 picks giving the new player a score in the area of 1000-2000 points and an "accuracy" in the 90s (depending on the volatility and the "noise")
After 7 days start closing the picks the "opposite" way, now using a THRESHOLD2 of say 3% (the player's picks are no longer "highest in volatility", so THRESHOLD2 should be chosen somewhat smaller than THRESHOLD1).
For every closed pick select a new one (do the abovementioned trick for n=1).
The actual performance of the stocks/ETFs is of no importance (it is the background "noise", the score comes from buying at a discount  greater than THRESHOLD1 and selling at a discount greater than THRESHOLD2.

The new player should rise to the #1 spot in the "caps" game within 5-10 weeks depending on the market volatility (the higher the better).
Creating more than one new player and some optimisation of the "script" would certainly speed things up.

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#11) On March 30, 2009 at 1:50 PM, portefeuille (99.61) wrote:

make that "selling at a premium" (just in case anyone got that far!) ...

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#12) On March 30, 2009 at 1:58 PM, angusthermopylae (39.92) wrote:

How's this?

New Charms:

--"Butterfly" charm for anyone whose average pick time (time between pick and close) is lower than X  (I'll let you decide X...two weeks? two months?  maybe in the bottom third of pick times?)

--"Anchor"  charm for anyone whose average pick time is above Y  (longer than 6 months?  6 years?  maybe a statistical selection, such as 2 standard deviations above the average time?)

 

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#13) On March 30, 2009 at 2:16 PM, SideShowMel0329 (51.01) wrote:

I like a lot of your ideas, nice writeup, hopefully MF will listen!

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#14) On March 30, 2009 at 2:43 PM, dwot (40.93) wrote:

Maybe you need to look outside the box a little.  If you had followed me as a player you would have left the market at the peak month when I did.

When I exited the market I went entirely red thumb and I made repeated warnings that smart money was selling on strength.

Patience needs to be added to your box.  It is a market that people are far more likely to lose money then to make it.

I made about 4% last year because I had money in boring safe bank deposits and not in the market.  Interest rates went down this year so I am looking at more like 3% this, and probably less next year.  But I am also buying a house that will generate me about $450/month income and what I pay in rent is about $400 more then the interest I get on the money in the bank and extra expenses are $200/month, so I am net an extra $650 tax-free dollars per month from buying the place.  I guess it works out to about 7% return on my investment compared to 2% in the bank.

This is outside the box investing.

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#15) On March 30, 2009 at 3:04 PM, SuperPicks (29.08) wrote:

I agree with just about everything you say!! YES YES YES

(strongly agree on 13 of 15 of your points)

*********************

Ia, Ib, Ic, Id, Ie

YES YES YES YES & YES

IIa & IIb

YES YES

IIIa & IIIb 

YES YES - i was so confused when i saw the new ticker leaderboard page, as i thought what you said here was the way it was supposed to be, there's still NO transparency on a person's cumulative score on a ticker (unless if you have lots of time to waste)

IVa YES - read portefuille's comments just above!

IVb Um, i agree with the irritation factor of such a stong still having a CAPs rating, thats just twisted, but I believe the players holding the ticker should be allowed to do so & in the rare case of the stock actually turning around, it should benefit those players' score.  shouldn't punish those players moreso than they've already been punished. 

IVc YES

IVd CAREFUL!! we are trying to find the best, maybe SOME of the 'best' make picks market moving calls only 1-3 times/year.  Just like banking, there should be an escheatment or expiration process, but anything LESS than a year would be barbaric & promoting an extreme SHORT TERM outlook.  NOW for finding players this is a great FILTER (find people who have picked recently).  But for those who log in to CAPs once a year to make calls, well those count too!! But I agree with what you say for any players who haven't made picks in over 18 months - their weighting should dissappear & go to N/A!

IVe YES

IVf dont mind either way

 

Further on StatsGeek 's Ipoint above, it should be on dollar volume (because a stock trading at $2,000/share or $400/share is going to have a lot less volume & still be very liquid day to day)

These changes above would make the CAPs subsystem of The Motley Fool UNTOUCHABLE to any competition. From Abitare's post on the weekend (through the comments following), I discovered marketguru which seems like its on its way to being nice as CAPs.  I may startup an account this week. 

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#16) On March 30, 2009 at 3:06 PM, SuperPicks (29.08) wrote:

dwot's comment above reinforces my hesitations on what I said on IVd just above.

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#17) On March 30, 2009 at 3:53 PM, kfisherprotege (30.96) wrote:

My strategy as a rookie swing trader is to align my CAPS account with my RLP and updown account.  So that when you look at my CAPS picks there's a good chance my other accounts reflect those as well.  I try to change my picks within minutes of each other, starting with my RLP, so that the purchase or "start" price is roughly equivalent.  Not sure if others employ a similar approach.

That said, I do have a bunch of indiv. stocks I''ve rated in CAPS that have been "hanging around", just waiting to rise above the +5.0 score so I get an accuracy credit.  Conversely, I have a bunch of decent companies in my watchlist trading just below the $1.50 range that I'm ready to green thumb once they hit that threshold.

For all its warts and quirks, CAPS is still has a pretty good rating system, I'd say.  But I do agree with many of your suggestions.

-kfp

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#18) On March 30, 2009 at 5:29 PM, nottheSEC (79.97) wrote:

zzlangerhans

Agee with most of it and some of it has been said. This however is the most cogent proposal made.My own personal pet peeve is the 5 star rating on penny stocks because people have not closed their position. I.e Heska , HSKA ... Perhaps a good speculative comapny It is a money-making pet pharma company at 24 cents share price but not a five star. Anway great topic all best ....J

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#19) On March 30, 2009 at 5:39 PM, outoffocus (23.24) wrote:

I agree with the 5 star unratable stocks point.  Theres should be some type of NASDAQ system that "de-stars" a 5 star stock that isnt ratable. If the ticker has been unratable for more than 30 days it should show up as "no rating".  Same with inactive players.

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#20) On March 30, 2009 at 5:47 PM, RonChapmanJr (39.12) wrote:

Something that must be considered is whether MF wants all of us to know who the best individual investors are on CAPS.  If we are able to easily identify great investors on CAPS who are not MF employees, why would anyone buy a MF newsletter?

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#21) On March 30, 2009 at 6:14 PM, TigerPack1 (88.76) wrote:

Excellent ideas floating around here.

I have metioned in other message threads that Motley Fool is more interested in creating page views with the CAPS game, than finding the best stock market mind in America.  They earn money from the banner ads, with more page views and clicks from users.

If the CAPS "scoring" system did not unfairly reward thumbs down picks on their "relative" performance scale vs. real world profit results, and they added the third criteria of average gain per pick (which is already being calculated, but not ranked against other CAPS players), we would get a more clear picture of who is actually making money in the real world with their picks.

I would much rather know who is making 5-10 picks I can replicate without a margin account, at say +30% per pick, vs. following someone who mindlessly picks 200 stocks that "outperform" by 4% or 5% based on random luck!

On the thumbs down picks, a 20% upmove in the market MAY combine with a 20% downmove in a certain sector to create a +40 point gain in CAPS.  But any knucklehead throwing darts would have replicated the 20% gain in the short sale example of the down sector, by throwing darts on the long side.  How is that "outperformance" when you are making the exact same return in the real world????  A 20% gain vs. a 20% gain is NOT a 40% outperformance number under any rational logic.

We have just endured one of the more rapid and dramatic bear market declines in history, and the CAPS game is full of bears that have mastered the thumbs-down miscalculation by Motley Fool score keepers.  Many of the bears in the top 100-200 of CAPS will crumble in score as they are forced to pick thumbs up in the unfolding multi-year bull market in stocks.

I personally have fashioned my CAPS picking to "fit" the way the game is scored.  My real world accounts look much different and involve 10-20 stocks on the long side at any moment in time.

Perhaps a new CAPS experiement that equally weighted (1) total cumulative outperformance [with the thumbs down miscalculation fixed], (2) score per pick, and (3) overall accuracy for the three categories with a limit of say 50 stock picks, would give us a more clear picture of who can really produce real world returns.

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#22) On March 30, 2009 at 6:32 PM, nuf2bdangrus (< 20) wrote:

Get rid of the junk stocks that have no meaningful investment purpose (trading volume would accomplish that)

 

How about ratings that reward pcikers WHO PICK STOCKS THAT GO UP??????  That's what I'm looking for.  I could give 2 craps about "relative outperformance".  You can relative outperform me to zero with real money if my stocks go down.

 

I just want to find players who pick stocks that go up.

 

Ph, and get rid of the 7 day hold.  I know, we're inestors here...right?  But don't lock me into a position when something changes.  Too many wild swing sin this market to be stuck holding SKF etc. for a week.

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#23) On March 31, 2009 at 12:37 AM, tonylogan1 (28.22) wrote:

keep the 7 day hold so I can get work done and not be trading my caps account all day.

I didnt even realize how many people cancelled their picks using the 20 minute window. I think if there is going to be a 20 minute delay (the point is supposed to be to negate the effect of real time trade access) being able to cancel the picks using real time quotes is no different than using real time to start the pick, just more laborious.

dont do anything to push the top players out, like resetting scores. In time, anyone can overtake even top players

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#24) On March 31, 2009 at 2:23 AM, Pharaohflex (< 20) wrote:

Supposedly MF has found a way to leverage the collective intelligence on CAPS for real money investors, yielding another market-thumping newsletter service. The even have a NASA scientist involved, and use algorithms and other cool stuff like that, so it must work...

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#25) On March 31, 2009 at 4:10 AM, Xciteddon (69.05) wrote:

I liked your suggestions but here is another one. Have the ability to chose what type of a trader you are....long term...swing...day...ect and have there scores only relate to each other. You could then have one cap for long term and one for day trades...so you could relatively try it before you actually put your money in it. I for one don't pick red thumbs. I want to be in it for the long haul and I want stocks that go up. All of mine are green and my score reflects that. My graph really reflect that but thats what I want to learn. :) I don't think its smart to just follow one trader. I like looking at the picks of others good or not so good and finding stock ideas. Ones I haven't heard of or seen and reseaching them and then deciding to put them wither on a watchlist or on my caps.

I think you all have some really great suggestions though.

Have a great day!

D

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#26) On March 31, 2009 at 4:35 AM, LawfordCap (99.76) wrote:

 Great post!!!!!!!!!

1. Sharpe measure identify volatile stock and leveraged ETF pickers

2. liquidity measure identify short and micro cap pickers.

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#27) On March 31, 2009 at 7:53 AM, portefeuille (99.61) wrote:

(warning: this is a result of a one-brain-storm!)

How about "unlocking the hidden value" of the huge amount of data the caps game should have generated by now) by giving access to more player/stock/sector specific information like:

A) STOCK/PLAYER specific:

there appears to be some general agreement on this:

III. We want to be score leader on our pet stocks. Our ratings will inevitably plateau if we don’t resort to playing games with the scoring, so we want to be able to compete for something.

a. Change the leaderboard to reflect the players with the top cumulative scores across all their picks, the way that the score leader is chosen. We don’t care so much about that guy who randomly picked it at the low point two years ago because he liked the ticker symbol and racked up a double. I want to know the guy who got positive scores on it up and down nine times in a year.


Now how about this feature:

add a new column (say between "Ticker" and "CAPS Rating") called something like "player specific". click on the link in that column and you have access to everything one could possibly want to know (and some more …) about that particular player/stock combination.

his cumulative (!) score ("for that stock"),

his pitches (keep adding "for that stock"!), his comments on other players pitches,

the number of picks,

the average "holding period", annualized return (for all picks combined, every single pick, best/worst ...), in absolute terms or relative to some benchmark, ...

AND

(now to something slightly more "exciting")

flash based customisable charts.

The standard ("basic") chart would look something like this:

2 year chart of the stock with the periods in which the player had "outperform" ratings on the stock coloured in green and the "underperform" rating periods coloured in red (or whatever pair of colours more pleases the eye).

As "indicator" maybe a line showing the cumulative score (as always "for that stock" ...).

Now some "customisation" features for the chart:

click on "how do I compare" and now you have some line segments added:

YOUR "outperform"/"underperform rating periods as green/red line segments ("slightly vertically offset", you get the picture, don't you).

And - of course - YOUR cumulative score ("for that stock") as a second line in the "indicator" area below the stock price chart.

Now you have your little pet stock race scores at a glance.

You can "add the top 5 players" (for that stock) to the chart, select different time periods and have all these "flashy" gadgets you find here.

B) SECTOR specific

(make the obvious changes like "stock" -> "sector" where that makes sense)

Stuff like a chart of YOUR cumulative score ("for that sector") with the number of picks "from that sector" as"indicator" might be nice ("do you plateau", turn into a "sector guru", "regress"?).

C) a chart showing how the player's score has developed "sector-wise" (looking something like this)

AND there should be a RADIO BUTTON on just about every "caps" page to implement this:

a. Option to isolate green thumbs or red thumbs

b. Option to eliminate .OB and .PK

c. Option to eliminate accuracy

d. Option to eliminate S&P comparator

e. Option to eliminate leveraged ETF’s


looking something like this:

* * * * * * * * * * * * * * * * *

green () red () both ()

.OB .PK: yes () no ()

accuracy:  yes () no ()

benchmark: none () sector() s&p ()

leveraged ETF’s: yes() no()

* * * * * * * * * * * * * * * * *

The preferred (default) state of that radio button should be saved in the player's profile/preferences section.

One (last!) thing about "inverse" ETFs and "foreign "stocks:

"underperform " ratings on "inverse" ("short","bear", whatever they are called) ETFs should yield "green" scores, NOT "red" ones (for obvious reasons) and do add more stock exchanges (London and Frankfurt/Xetra should suffice for the beginning because many ADRs are highly illiquid in New York and would be dumped as .OB .PK!

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#28) On March 31, 2009 at 9:11 AM, CBombay (28.63) wrote:

What about a charm for people where at least x% of their picks are marginable securities?  (Say common equity over $5/share).  Same for liquid securities (as mentioned above, dollar volume).  You could also do a penny stock charm for people who pick x% of their portfolio from that stuff? 

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#29) On March 31, 2009 at 1:09 PM, Melaschasm (57.74) wrote:

I would like to see a separate system for people to play a slightly different game.

The new game I would like to see is one that more closely reflects real world investing.  In this game a person would receive a certain amount of 'money' to invest in stocks ($1million sounds like a nice number).  The ratings would be  against the average of other players as well as against the S&P.

We could then look at a players success over various time frames (day, month, year, 3 years, 6 years, and 10 years.  This would show us who is doing well right now, and  who has been doing well over a long period of time.  I would also like to see the ability to rate each player within a sector.  That way i could see who is doing well picking energy stocks, or retailers, or whatever other sector has my interest.  This rating would allow comparisons of an individual player against all others as well as a sector ETF within the specific sector in question. 

 

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#30) On March 31, 2009 at 3:28 PM, SuperPicks (29.08) wrote:

portefeuille YES! Especially like the sector specific idea, that is invaluable information!

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#31) On March 31, 2009 at 4:19 PM, portefeuille (99.61) wrote:

There is a certain urgency to eliminating the "cancel picks during the 20 minute delay" feature because misusing it even in a rather casual way (say "squeeze out" an extra 1% on every pick's start and end) could have a dramatic effect for a player with a low average pick score.

Some "All Stars" have "average pick scores" in the area of 2%. They could DOUBLE their score with very little effort - no need for any scripting/bots. You need only sacrifice a minute or two for each pick. I certainly use more than that on "research" before making a call.

And even if hardly anyone has used this trick or starts using it now the greater problem is that it is virtually impossible to prove that you are NOT using it.

And what is the use of that feature anyhow?

Does an analyst ever send a "never mind" note as follow-up to his research report  "within the first 20 minutes"? I thought the caps players are to some extent supposed to be analysts ...

 

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#32) On March 31, 2009 at 4:31 PM, tonylogan1 (28.22) wrote:

actually it is pretty easy to tell who is using it... I see some of my favorite players that start and end picks every day on stocks... It seems obvious they are only letting picks go through that will give them good starting prices.

I don't blame them, but it would cause me to waste a lot of time on my picks that I could dedicate to real world money making. So I suggest either allow for real time picks (better idea) or get rid of 20 minute cancel.

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#33) On March 31, 2009 at 5:38 PM, SuperPicks (29.08) wrote:

tony, you cannot see canceled picks of other players because those picks were never started!  Those picks you see are picks that are not canceled, and those picks that are ended, are actually ended and again, not canceled.

hope that helps. 

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#34) On March 31, 2009 at 5:46 PM, tonylogan1 (28.22) wrote:

Superpicks -

My bad... I guess I wasn't paying close enough attention... looks like what is happening is people going for accuracy points by ending a pick and then restarting it, but since it is listed in the opposite order on my screen I was reading it wrong.

Now that I read your message, I suspect that you are a pick canceller, but again, I would not hold it against you. The rules allow it, it is not morally ambiguous, I just want the rules changed to suit me better. I'm kind of like a Bank CEO that way.

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#35) On April 02, 2009 at 12:57 AM, SuperPicks (29.08) wrote:

No, never thought of pick canceling until it was brought up here on this post.

I'm trying to severely limit the time I'm dedicating to the markets & CAPs & drastically cut it down.  If I wasn't doing this, don't put it past me to not try the pick canceling game, but really, its just too much work without automation. 

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#36) On April 02, 2009 at 3:48 PM, winojohn (47.02) wrote:

ZZ,

Nice post, but what about those of us who use CAPS to track, not to play a game?  All of my 'picks' are companies I either own or am considering a position in.  AAPL for instance:  I have a small position that changes as the stock goes up and down and my belief in upside vs downside changes.  I never short and never sell completely out, but my holding changes.  I don't really care what my 'score' is, it's just a convenient way to see a list of 'my' stocks.

I like having a comparison benchmark. It doesn't have to be the S&P (maybe a total market index?) but I want something to compare against, and since some of my retirement funds are in an S&P index fund, using that one is fine. 

I agree, as you stated VERY clearly, that any changes should not reduce functionality for those of us who are happy with how we use CAPS.

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#37) On April 02, 2009 at 3:59 PM, ViolentCapital (97.44) wrote:

the biggest problem about caps is kind of the system itself. it sort of rewards picking more companies.

You're accuracy can then be in the 80's percentile, but because you've made 1000 picks, your score reachest heights of 1000+. Chances are a real portfolio won't consider this an option because:

1) Transaction costs

2) It's difficult for an individual to follow so many companies

CAPS is basically for the obsessive compulsive as someone pointed out above - and I sort of wonder what 1/2 these guys do during the day.

Anyways, no system is perfect - a possible way to correct this thought is to have all of the positions equally weighted in a portfolio (20 positions will be weighted 5% each, close 10 positions and the positions get redistributed and weighted 10% each)

I'm guessing this is to much work for Fool programmers...

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#38) On April 09, 2009 at 1:30 PM, SNHamilton (99.97) wrote:

This is a great post.  Thanks to portefeuille for sending me here.  I reached the 99's with mostly just a few stock picks, but when I fell out, I found myself gaming the system a bit.  I liked to be able to say I was a top 1%er and the temptation proved too much.  This should not be rewarded, and many of the options you mentioned would help this.  People who get high ratings by shorting short ETFs for example, does that really tell me their stock picks are good?  Some people may be good at predicting short term market moves, others good at actually analyzing and picking stocks.  We need a way to separate these groups, so that folks that are here to analyze stocks can actually find (and be found) by others with the same intent.

 I will throw in a couple of thoughts I have had on CAPS changes:

 

1.  Combine stock results on single stocks (pumping accuracy by jumping in and out makes things messy and confusing.  I understand the benefit, but it is not worth it).  

 

2.  Allow for "triggered" actions.  If I think a company is a bargain at 8, but it is now at 9, I don't want to have to check in all the time to see if it is at my number, or worry about the effect of the delay, or whatever.  Let me specify a price for my adding or removing stock picks from CAPS, thereby removing the incentive to be constantly and annoyingly checking stock prices all the time.

 

3.  Allow a certain % of your picks to be "overweighted" or "double downed".  Some picks you believe more than others.  You can't allow all of them to be that way, or the system can be gamed to double returns by doubling down everything.  But you could allow ... say ... one in ten picks (of actual stocks not ETFs or something) to be double weighted.  In other words, make that darn $ mean something. 

-Sam 

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#39) On May 20, 2009 at 10:42 PM, vmh104 (< 20) wrote:

Thank you zz!

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#40) On May 08, 2012 at 3:08 AM, bitters (< 20) wrote:

ZZ -- Your post was insightful and funny, and it helped me better understand the CAPS charts and why they mostly confused and frustrated me.   I need to know what the top leaders are buying NOW -- not what I should have been investing in back in 2008.    I'm a long-term investor who rode AOL all the way up, and all the way down, and I now trade too often for fear of letting this happen again.  And, I'm also one of those who has bought a stock (small amount) in-part due to jazzy/hip ticker -- though I know this is a stupid gamble.   Some SKUL anyone?   

 Melaschasm -- I really liked your idea of new game with actual start-up dollar amount for all players so that gains/losses and portfolio percentages can be clearly viewed. 

I love the comments/blogs/boards -- valuable info, and fun.  Huge thanks to all posters for taking the time to help those of us with less financial/investment background.   Fool on!

 

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#41) On May 08, 2012 at 3:38 AM, GregoryJaime (< 20) wrote:

just as Willie implied I am in shock that a stay at home mom able to make $9009 in a few weeks on the internet. have you seen this site (Click on menu Home more information)  http://goo.gl/57Vy7

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