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getrichdietrying (82.38)

How to Win like Top Fools in your RL Porfolio.

Recs

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February 10, 2013 – Comments (34) | RELATED TICKERS: BAC , AAPL , GOOGL

The overwhelming calculations done by the players here at fool to imitate the winnings of the top fools winning picks in real life are all for naught.   There is not a single fool proof way to consistently pick the winnable picks like them in our real life portfolio as bbmave clearly points out to roofman6 in his blog.  roofman6 who along with others have done insurmountable, by me, calculations in spreadsheets to equations (portefeullie)  in ideas on how to come close to predicting the winnings.  However, not one of them can come to 100% accuracy of the picks in gains for picks in real life for those huge profits.  

By keeping a eye on these top fools: While you can never duplicate the hundreds of percentages in real life gains year in and year out.  You can get to double digit gains which is better than most.

1st. In real life don't be "All In", in only one position, or a handful. Be diversified because you are human and will either suffer from panic on losses, or euphoria on gains. Too many pitfalls because unknowingly you might not be as diversified as you thought you are where one sector can bring your portfolio crashing down.

2. Use the top fools as your watchers to help you keep an eye in on a great investment opportunity.

3. Most of us can't suffer losses and are fearful when our pick is in the 100% gains that forces our human nature to lock in RL losses or gains but in caps we keep holding.  Figure out why hold or why you should lock in, ask yourself would you do the same in caps picks for points?

3.5.  We just don't have the funds to wait and hold to see which 10 picks are going to give us 100% gains on each. So we consistently buy and sell each month.  Reallocate only if you need to according to your winning picks in your caps portfolio each month so you can follow your Caps winning picks in RL profits.

4.  Listen to ideas from others, any one have any? Please tell us if you are doing this in real life portfolios with the RL gains or losses you have as well.  Why does it work for you and might not for others?

I for one am following my own above advice.  I have my ups and downs due to being human and not having the patience.  Since I just started doing this recently I do not have a long enough history of percentages to give you, I will check back at the end of year and let you know how my 10k portfolio did. So far it's up 10% which tomorrow can be -10%. 

34 Comments – Post Your Own

#1) On February 10, 2013 at 10:15 PM, portefeuille (99.61) wrote:

I think someone following the outperform calls made by my player portefeuille2 in a reasonable way would have achieved a compound annual growth rate (CAGR) of around 45%, see comments #108,110 here.

http://caps.fool.com/Blogs/caps-geniuses/792490.

Had he just followed the biopharma outperform calls he might have made a CAGR of around 50%.

This is somewhat corroborated by the performance of my "fund" initiated in March 2010, when the best part of the rally from the 2008/2009 lows was over.

http://caps.fool.com/Blogs/fund-trades/793386.

I agree that finding out how people actually "following" other players' advice have done in the past few years.

The only "formula" I used was the one posted in comment #121 here.

http://caps.fool.com/Blogs/caps-geniuses/792490.

which is simply the development of your funds if you have a constant growth rate r (i.e. "gets multiplied by the same factor 1+r every year"). That r is what one appropiately calls compound annual growth rate (CAGR) ...

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#2) On February 10, 2013 at 10:24 PM, awallejr (85.46) wrote:

Well the chance for going "all in" was clearly March of 2009.  That opportunity doesn't exist now.  Now it is about "yield."  You can try to find that "momentum" play but yield will win now since the market has rebounded and now it is a question of where to put one's money at. A lot of "nows" there heheh.

I say MLPs, BDCs and Reits until the Fed starts raising interest rates.

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#3) On February 10, 2013 at 10:28 PM, portefeuille (99.61) wrote:

Those looking for investment ideas in the biopharma sector could start here.

http://twitter.com/portefeuillefun/following.

Some of them are great "resources". 

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#4) On February 10, 2013 at 10:39 PM, portefeuille (99.61) wrote:

#2 You could still make 88% in 2012 quite easily with a low yield portfolio ;)

http://caps.fool.com/Blogs/88/785537.

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#5) On February 10, 2013 at 10:47 PM, getrichdietrying (82.38) wrote:

portefeuille 1, 2,.. Nothing personal, no one follows anyone true to recommended picks in RL positions all the time.  I also do not have the experience, knowledge, tolerance, patience, and overall "testosterone" that you do.  I like any one else would hand you our money if you personally created a mutual fund or an ETF, but would never manage it on our own on a daily basis.  I am lazy and a fearful investor (emotional), with greed thrown in to boot, which I know is what most people are with their hard earned money.  I don't follow in RL every one of the 100+ people I follow in caps.  I just watch for certain opportunity of outperform, and under-perform picks and pick one that matches my personality same as most, most likely. 

So far stock picks from any of my following fools have led me to be more wary and try to pick with accuracy.  The picks I have made in RL are generating anywhere from 1% to 30% in less than two months. This is not including selling, re-buying and selling the same damned ones. Freaking human nature being what it is and me be being an average moron that I am.  My friend whom I advised is up 30% while I hover in my diversification at 8-10% with tomorrow being maybe a -10% loss. I started this last month, of last week of last year with 10K.

Having never followed you or anyone else in RL and loosing money from those early learning curves has now made me the better investor today.  I am not sure about tomorrow. Here's to hope.

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#6) On February 10, 2013 at 11:18 PM, getrichdietrying (82.38) wrote:

awallejr.  Sorry but "Well the chance for going "all in" was clearly March of 2009" never ever existed.  If you had bought GM, Lehman, blockbuster, or many other's you would be bankrupt along with them.  No matter what environment it is,  investing still requires you to pick the best rebound with the best chance with the best track record with the best books with the best management along with their ethics.

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#7) On February 10, 2013 at 11:31 PM, portefeuille (99.61) wrote:

#2,5. I think people should try not to get too "conservative". The rally that started in 2008/2009 may have a few more years to go. Who knows.

two segments that have done great since the 2011 lows.

iShares Nasdaq Biotechnology Index Fund IBB.



enlarge

 

German midcap index MDAX.



enlarge

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#8) On February 11, 2013 at 10:29 AM, valuemoneygreen (82.50) wrote:

Making picks in the Biopharma Sector is gambling (spec) not investing. If anyone does not think so I challenge portefeuille to give me 20 biopharma names and I will hold them for 5 years in a CAPS account and lets see the returns assuming a $10000 total investment portf. he can specify how much in each of the twenty names. I will do a similar portf. and do the same. Then we can see the results. No picks will be closed for the 5 year period. I am fine with equal weighing in all 20 names also. Then we can see how many names were GOOD investments.

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#9) On February 11, 2013 at 11:16 AM, valuemoneygreen (82.50) wrote:

Good post by the way. It would be good if each player would have a separate CAPS profile that had their 10 BEST picks and the minumun holding period was a year not 7 days. That would be a better tell who the better INVESTORS are not TRADERS plus it would be easier to see ones best ideas put forward and not be able to hide behind 1000 or more picks. Just my opinion anyway. Others opinions may differ and that is fine with me.

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#10) On February 11, 2013 at 12:11 PM, awallejr (85.46) wrote:

getrichdietrying  you mention exceptions not the rule back then.  You could have thrown a dart at any chart and made money.  This whole recovery has been about Ben Bernanke, plain and simple. 

All the doom and gloomers shouting for the banks to be nationalized and Uncle Ben comes out and says no.  Instead the banks will be guaranteed and recapitalized with basically interest free money.

This rally is going to continue as long as Uncle Ben keeps QE going and keeping interest rates low.  And that could still be years to come.

And Porte I didn't say you can't still make great pct gains but it is harder now than back in March 2009.  Bio is a great place but to me that area is like a lottery.  I do a little speculating but for the most part I am more interested in building a growing income stream.

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#11) On February 11, 2013 at 4:49 PM, zzlangerhans (99.78) wrote:

I think the whole "investors" vs "traders" distinction is a canard. The goal of what I'm doing is to make money, and I put a lot of work into it. If you want to buy a stock and not look at it for five years and call yourself an investor, that's great. If you end up making a 30% profit over that five year period, all the better. Biopharma stocks are very volatile, but that doesn't mean their behavior is random or that trading them is gambling. A good biopharma investor like Portefeuille can consistently make 30% in a year and possibly much more. Restricting him to a five year horizon serves absolutely no purpose. There are market simulators on sites like Investopedia that mimic real life trading more accurately than CAPS, and I would bet you that Portefeuille can clear the 30% mark every year.

Every day I shake my head at all the articles obsessing over Apple, Facebook and gold while I trade stocks no one covers that move 5% on a slow day. It's almost like people think that the money they make on trading Apple is somehow better than money made on trading an obscure biopharma. Ridiculous. 

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#12) On February 11, 2013 at 5:41 PM, awallejr (85.46) wrote:

Well you've just given the reason ZZ.  It is work.  You have to put a ton of hours into it.  I don't have to put much time monitoring my holdings since it is a "yield" portfolio. You can hit major homeruns in Biopharma but as I said, it is a lot of work.

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#13) On February 11, 2013 at 5:53 PM, Mega (99.95) wrote:

zzlangerhans wrote: "I would bet you that Portefeuille can clear the 30% mark every year."

I'll take that bet. What terms do you want?

(No offense intended to portefeuille of course. 2009-2012 have been unusually strong for biotech - I think it's very unlikely anyone will be able to hit 30% returns each year for the next 3 years.)

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#14) On February 11, 2013 at 6:01 PM, zzlangerhans (99.78) wrote:

What do you think, Portefeuille?

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#15) On February 12, 2013 at 12:39 AM, HoldThatWinner (31.21) wrote:

I wish I had more time to play Caps (If I could only donate 1 hour each day to the Caps!). What a Great community that provides fantastic insight and ideas. I find myself with limited time but was able to catch up a little bit today on the blogs and make a few picks and pitches. It can definitely be a very bad thing if you don't follow it daily when you have red thumbs in the recent Bull Market (ha ha!). I just wanted to say that this is an Excellent post and thread. Thanks everyone for sharing your ideas and insight. HTW

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#16) On February 12, 2013 at 2:52 AM, valuemoney (99.99) wrote:

zzlangerhans the point I am trying to make is portefeuille is trying to suggest people follow his picks. I think that is a bad idea. His accuraccy is to low for that. I will give u a example. I invest 5000 in a ROTH IRA at the begining of the year and I want to follow portefeuille's trades. 1st of I have 5000 to work with. How many picks do I use for my 5000? Next lets say its 20...i don't know you pick the number. Ok I have twenty.....7 days later he ends his pick for a 10% return. So do I just pick the next stock radomly he choses the next day and what % of the new monies I just sold do I invest in it? Same goes for the next sell. Ok one I bought is down 50% ....do I wait till he ends his to end mine? Trades cost me $7 a buy and $7 a sell so one has to be mindfull of that. Do I just keep 20 picks ( or whatever number you or he suggest? Or when do I add more. This is why accuracy is so important. PLUS a very important part is the market is going UP. Look what MegaShort brings up in his comment #13. In a down market biotechs with perform much worse in the overall market. Just like they can perform much better when the market is going straight up. My return last year was 68% I didn't make more than a dozen trades. I stated you can do it by trading or speculation which is fine by me but to suggest one follow blindly is not a very good idea in my opinion. And when you buy a company that has never had earnings before it is pure speculation no if ands or buts about it.

If you disagree then this definition must be wrong

Speculation is the practice of engaging in risky financial transactions in an attempt to profit from short or medium term fluctuations in the market value of a tradable good such as a financial instrument, rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, interest, or dividends. Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. Speculation can in principle involve any tradable good or financial instrument. Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.

Speculators play one of four primary roles in financial markets, along with hedgers who engage in transactions to offset some other pre-existing risk, arbitrageurs who seek to profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument's underlying attributes. The role of speculators is to absorb excess risk that other participants do not want, and to provide liquidity in the marketplace by buying or selling when no participants from the other categories are available. Successful speculation entails collecting an adequate level of monetary compensation in return for providing immediate liquidity and assuming additional risk so that, over time, the inevitable losses are offset by larger profits.

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#17) On February 12, 2013 at 3:08 AM, valuemoney (99.99) wrote:

I invite any to look at my valuemoney page. They can get ideas from it if they like. I have made 653 green thumb calls since I started. So far only 57 of them have been wrong. (lost to the market). 43 are still active 5 of those are right which leaves 38 left. 10 of those I expect to go positive. So I would guess 47 out of 653 would be for positive points. That is 92.80% accuraccy on my green thumb calls. But at no point would I ever suggest making that many trades or blindly follow any of them. Sure compounded in some of the trades look good on paper hypothedically but I would never trade like that and as this blogs is suggesting do your own thing and don't get over you head on stuff you don't know or understand. That is all.

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#18) On February 12, 2013 at 3:20 AM, portefeuille (99.61) wrote:

#11,14 I agree with that. I try to react to news or price changes or both, so not reacting for 5 years would seriously alter my "investment style" (which is "news driven" I guess, were I to choose a hedge fund strategy). I live in one of those high tax countries and were I to make far less than 30% p.a. it would really not be worth the effort. On your gains you immediately pay around 28% (Abgeltunssteuer + Solidaritätszuschlag + Kirchensteuer) no matter how long you held a stock. And prices are pretty high over here for most things ($9 for a gallon of gasoline (includes VAT)), 19% VAT on most products, around 2$/ft^2 for monthly rent (or you can choose to buy a 1000 ft^2 apartment for around $300k), ...

So I am still far too young and too poor to aim for 7% p.a. ...

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#19) On February 12, 2013 at 3:27 AM, portefeuille (99.61) wrote:

portefeuille is trying to suggest people follow his picks

The right people in the right way I usually say. Most people should simply take them as "inspiration" or source of ideas. And the thing to be "inspired by" is my fund thing, not any of my "caps" game players. It is just that the discussion here that inspired the writing of this post started with the performance of the players.

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#20) On February 12, 2013 at 3:33 AM, portefeuille (99.61) wrote:

#19 ... and follow people on twitter. Once you follow a few of those I follow you will see that I am one of the least prone to influence anyone's trading ;)

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#21) On February 12, 2013 at 11:01 AM, Mega (99.95) wrote:

valuemoney wrote: "Look what MegaShort brings up in his comment #13. In a down market biotechs with perform much worse in the overall market."

Not necessarily. IBB did quite well in 2008.

My point was at some point biotech will cool off and biotech stock picking will become more difficult (at least for a while).

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#22) On February 12, 2013 at 5:43 PM, zzlangerhans (99.78) wrote:

As Portefeuille points out, he has never suggested anyone follow his CAPS picks. He has suggested that people follow his virtual fund buys, which is a much more practical approach. I promise you that if you go back to when he started his fund and track the performance of a $10000 initial stake, you will find you would have easily tripled it even accounting for trading costs.

Regarding your definitions, I am sure they are taken from an investing textbook I have never read (I haven't read any) and that I can't presume to argue with (so I will).

"Speculation is the practice of engaging in risky financial transactions in an attempt to profit from short or medium term fluctuations in the market value of a tradable good such as a financial instrument, rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, interest, or dividends."

I generally agree that this is what I do.

"Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements."

This is not what I do. Of course, your textbook equivocates by adding the qualifier "many", which means that the definition is no longer a definition. "Speculator" has now been morphed into "technical trader". Personally, I don't study technicals and don't particularly believe in them. Your textbook author doesn't account for the fact that there is fundamental value that cannot be measured in terms of profits, interest, or dividends. A 30% probability of an improved topline therapy for a certain type of cancer has fundamental value. Someone who speculates either long or short regarding that value weighed against the market cap of the stock is making a calculated probabilistic decision, not gambling. As in most pursuits, some are better than others at doing this. And to add another layer of complexity, it is also possible to trade based on one's judgment of how the general perception of the stock will change over time, regardless of the outcome of catalysts. So there is a strong psychological component as well as a scientific/statistical component.

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#23) On February 12, 2013 at 5:49 PM, zzlangerhans (99.78) wrote:

Most of my early failures came from attempts to pigeonhole stocks and maintain a foolish consistency, as Emerson would have it. Ergo "good" companies and "bad" companies. While it is certainly important to account for a company's track record and also to identify the numerous scams, I've found that "good" biopharmas are good until they go bad, and vice versa. Similarly, attempting to pigeonhole a trade as a speculation or an investment is likewise pointless. Decide how much work you want to put in, how much volatility you can tolerate, and how much analytic capability you have and trade accordingly.

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#24) On February 12, 2013 at 5:49 PM, zzlangerhans (99.78) wrote:

By the way, your track record is certainly very impressive. But what is the average score of your 600 winning green thumbs? I don't think the answer is consistent with an investing mentality.

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#25) On February 12, 2013 at 6:02 PM, awallejr (85.46) wrote:

Have to agree with ZZ when he references average score.  Valuemoney crushes me in total points and accuracy yet our average score is pretty close (9.28 mine v 9.35).

I do have to say for the record that my accuracy went down today as a result of listening to Porte and ZZ's pick of MYGN ;p

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#26) On February 14, 2013 at 11:29 PM, anchak (99.84) wrote:

A lot of people are challenging Hans( Porte) here -as I can see.

He's the only guy who has consistently and openly tracked his fund real time - and I have tested his performance - and irrespective of what the market does - he manages to produce statistically significant alpha!!!

Replicating him is much more challenging- I personally gave up - and since I mostly do ETFs  - picked IBB - which I only recommended to him - and looks like he has held it off and  on since.

#21 is bang on -- while weak balance sheet ie micro Bios tend ot get decimated in a market bear - the group as a whole does quite differently depending on the stage of the bear. Do some research - and it should become clearer

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#27) On February 16, 2013 at 10:50 AM, valuemoney (99.99) wrote:

zzlangerhans My valuemoney caps page is BS for the most part.... one should follow NO picks on there. If you read my last blog I one wants INVESTING ideas they should go to my valuemoneygreen page..... there is investing talk there....no TIMING the market or CAPS points driven.....

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#28) On February 16, 2013 at 11:14 AM, valuemoney (99.99) wrote:

The main point is that valuemoney and bio pharma picks have BIG losers in them my valuemoney page is just out to collect caps points.....My accuraccy is awesome because MOST of the green thumbs I make will outperform the market long term I will end them on TIMING. The real return is what matters. NOT the CAPS points. Sure it may outperform the market but maybe i think the market is going to go down and pick a good company because it will go down LESS than the market. Bad one to buy in real life in my opinion. Any one who has a BUNCH of picks with NEGATIVE 25% or more when they end their picks as a percentage of overall picks is a bad one to just blindly follow the picks. Law of averages will come and bite you if you don't make 100's of picks. A lot of people could cover up their mistakes with MANY picks. It just shows more than not you are right.....and the more you are right the more points you garner.

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#29) On February 16, 2013 at 11:37 AM, valuemoney (99.99) wrote:

Again I will say it and I said it before. Port. is AWESOME at what he does!!!!!!! I would be very leary to follow his picks....MOSTLY his biopharma ideas which are the ones he suggest to follow........

I think someone following the outperform calls made by my player portefeuille2 in a reasonable way would have achieved a compound annual growth rate (CAGR) of around 45%, see comments #108,110 here.

http://caps.fool.com/Blogs/caps-geniuses/792490.

Had he just followed the biopharma outperform calls he might have made a CAGR of around 50%

And I know he says in a reasonable way..... BUT WHAT DOES THAT MEAN? HOW DO YOU DO THAT?......I asked but got no response..... @ zzlangerhans .......see what I am getting at? Maybe u2 can do this but 99.9% of the people can't and can't just follow.....that is my point.........now read comments on my valuemoneygreen ....I think most would agree that is a little easier to follow and understand the thinking....( the awesome part you can ask on each pick and I will explain it if you like)........and over time keep looking at the returns.....TOTAL GAIN..... how many picks are you going to see with negative 25% to negative 99%? I will bet not many.....and for out performing the S&P.....time will tell but I like my chances....A LOT...over time gains are made by NOT lossing money....that means HIGH accuracy on total return with no negative returns....I can explain further on the importance of that and how probablity works 

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#30) On February 16, 2013 at 12:16 PM, valuemoney (99.99) wrote:

example 16.95% of the time if you would have followed port-2's picks your return would have been 25% NEGATIVE or more return on your money roughly. 142 picks out of 838 green thumbs with a negative 25% return or more. 149 time out of 838 you would have lost 20% or more on your investment roughly 17.78% of the time. And roughly 1 time out of 5 you would lose 15% or MORE of your money on his picks...... Now I don't like those odds and returns.....because if I lose 25% of my money I need a 33% return just to BREAK even.

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#31) On February 16, 2013 at 12:29 PM, valuemoney (99.99) wrote:

Now his right picks MORE than make up for his wrong ones. But again how does one go about following them. If one only has 20 picks on a 10k account odds are following the model could be VERY good or VERY bad. I can give examples if you would like but I bet you are very good with numbers so one should get the point. Numbers could be more varied if one had a 5k account and could only have 10 stocks or say they have 20. Trading cost would cut into profits grately. 14 dollars on a buy and sell when you are dealing with $250 is a lot. i would even say 14 bucks on a $500 trade is crushing in the 20 picks on a 10k account. If anyone diagrees with the numbers let me know i am just trying to understand

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#32) On February 16, 2013 at 12:56 PM, valuemoney (99.99) wrote:

#25) On February 12, 2013 at 6:02 PM, awallejr (83.83) wrote:

Have to agree with ZZ when he references average score. Valuemoney crushes me in total points and accuracy yet our average score is pretty close (9.28 mine v 9.35).

I do have to say for the record that my accuracy went down today as a result of listening to Porte and ZZ's pick of MYGN ;p

agreed but that isnt the point of my valuemoney caps page as stated above most of my green thumb picks were good companies why do you think accuarcy is so high? u dont get high accuarcy with gambles.....you will get some major points though along with some MAJOR LOSSERS.....i dont like major losers......EVER......those r the picks that keep your returns low! you can have 10 good picks but it only takes 1 bad one to wreck your total return

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#33) On February 16, 2013 at 2:06 PM, awallejr (85.46) wrote:

Actually from what I was told you can get high accuracy more from redthumbing than greenthumbing.  It has been said that timing can be everything.  My account is a perfect example.

I opened this account in the begining of May of 2008.  Double hit there, right before the "sell in May and go away" event and right before the greatest crash in my lifetime.  Operating under a false idea how accuracy worked (I thought you only take a hit or get credit if there was a 5% swing either way) so I kept closing a declining pick and reopening it.  Basically I turned 1 loser into 10. ;/

Ah well I was determined to turn things around while my points were nasty red.  I got a lot of grief from Alstry about my score during our many arguments.  However I did predict to him that by end summer 2010 my points would be positivie and his negative.  It happened before then, he capitulated and closed nearly all his picks and forever argued that points are unimportant heheh.

I did peak in 2011 pointwise and just hit 50 % accuracy and was briefly in the 90s but then came Congress and their debt ceiling debacle.

Not sure what my point is by the above except to say over time a heavy dividend portfolio can grow nicely which many of my picks are. Ultimate profit trumps all I guess.

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#34) On February 17, 2013 at 9:47 PM, getrichdietrying (82.38) wrote:

valuemoneygreen great job. Will follow closely and I do appreciate your input that you give freely. 

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