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goldminingXpert (29.47)

In Honor of Tigerpack, our next new Top Fool Club Member

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July 01, 2010 – Comments (10)

It's been awhile since we had a firsttime #1. With the market slumping and most of the top 10 badly missing the trend change, we have upcoming upheavel in the ranks of the CAPS leaderboard. It appears that Tigerpack will be our next #1 if he can manage to overttake previous top fool club member and fellow bear (though he formerly called those shorting stocks "unpatriotic" Tickertapeking). In light of that, I quote Tigerpack from more than a year ago in comments on the CAPS scoring system and his ideas on how to improve it. Seeing as how he is now a top 10 player and will use (game?) that system to achieve the #1 spot, I'm guessing, I'm curious to see if his, and the community at large's, views have changed. Here's Tigerpack from March 30, 2009.

"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."

10 Comments – Post Your Own

#1) On July 01, 2010 at 10:50 PM, goldminingXpert (29.47) wrote:

We have just endured one of the more rapid and dramatic bear market declines in history, and the CAPS game is full of bears thathave 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.

This in particular happened. I briefly fell out of the top 2000 here at Caps in the ravages of the great bull delusion earlier this year. I wonder if the perceived benefit of red thumbs is more than counterweighed by the fact that when crappy stocks go to the moon, our years of hard work (bears that is) can be destroyed in a few weeks. A green thumb can only go to zero.

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#2) On July 02, 2010 at 12:29 AM, BigFatBEAR (29.23) wrote:

Tenmiles recently joined the "New Top Fool" club.

I think the market's gradually headed back up...   so my bets are on seeing a lot more vanamonde and bullishbabo than Tiger.

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#3) On July 02, 2010 at 12:32 AM, goldminingXpert (29.47) wrote:

What kind of a bear are you? The market is going straight down. Trust me, I've been right for the last year, and I'm not going to quit being right now. ;)

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#4) On July 02, 2010 at 1:14 AM, ChrisGraley (29.73) wrote:

Scoring system explained totally. Someone bookmark this page for future refernce.

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#5) On July 02, 2010 at 1:27 AM, JakilaTheHun (99.93) wrote:

Even though 90% of my picks are green thumbs, I think the market is going down.  We are clearly heading towards deflationary territory.  This process is being driven by currency distortions and East Asian mercantilism.  Until money supply in the US is allowed to meet its equilibrium levels, we'll stay in a recession/depression.

I have hedged the portfolios I manage in real life considerably.  Stocks are still "cheap", but the macro events could push the market further down for some time.  I'll probably get more bullish if I see the S&P drop below 875 - 900.  Or alternatively, if I see evidence that the Chinese are serious about Yuan appreciation --- thus far, they've allowd the Yuan to appreciate by about 0.8% against the Dollar.  If 3 months from now, the Yuan has appreciated 5% vs. the Dollar, I'll start considering the idea that China is serious.  

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#6) On July 02, 2010 at 1:36 AM, TMFBabo (100.00) wrote:

All it might take is a few very bad down days in a row, which is completely possible. 

I agree on learning the rules and playing by them.  I also play CAPS differently from real life, because my goal is to score points at a high rate of accuracy.  I'm not willing to take small losses in CAPS to free up pick slots while I might take small losses in real life to free up cash. 

If TMF decides to change the rules, I'll change my game to fit the rules.  While it doesn't necessarily translate into money making skills in real life, I believe the ability to score points consistently is not totally worthless. 

I also believe there's a good chance the market continues downward rather than upward.  However, I refuse to green thumb bear ETFs because I'm not positive I can close those out for points later.   

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#7) On July 02, 2010 at 5:58 AM, outoffocus (23.03) wrote:

Tenmiles recently joined the "New Top Fool" club.

Actually Tenmiles was in the Top Ten for a while. He may have fell out for a little bit but he's by no means a rookie.  I added him as a favorite early in 2009 because he was the only top ten member that had a pitch on ALL of his picks. 

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#8) On July 02, 2010 at 2:55 PM, TigerPack1 (97.04) wrote:

goldminingXpert-  Are trying to jinx me?

To paraphrase Doris Day's most memorable song... Whatever will be, will be... the future's not mine to see (you know the rest)!

It depends on the gold price.  I have been a little "early" on that call the past year.  If you look at the bottom of my current performance list, it is riddled with worthless gold miners that have doubled and tripled in price while I have had them red thumbed.  If we get a big $150US-$200 per ounce breakdown in gold, then I can still rack up 1500-2000 in CAPS points quickly as the gold stocks tank.  90%+ accuracy and 13,000 total points in 2-3 months is not impossible if gold cooperates.

The overall stock market situation still makes me sick to think about.  It is definitely a scary time for the economy the next 6 months.  The markets may "require" a Treasury debt downgrade, before our leaders decide to quit tampering with the free-market. The private economy is not sustainable in the current setup, and will require ever greater rates of tampering by deficit spending and money printing to keep things going each 12-18 months now.  Even the WSJ is today advocating continued stimulus spending, all but guaranteeing a debt downgrade... The NYTimes has printed such rubbish EACH day this week.

-TigerPack

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#9) On July 07, 2010 at 3:07 PM, FreeMortal (29.33) wrote:

bullishbabo (100.00) wrote:

I'm not willing to take small losses in CAPS to free up pick slots while I might take small losses in real life to free up cash. 

Would you elaborate on this a bit?   Are you that confident in your active picks?  Or is it all about accuracy?  For example, I often find mistakes in my active picks and I must reevaluate them again.  Sometimes I will dump a bad pick or even a mediocre pick in order to make room for a better one.

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#10) On July 07, 2010 at 4:33 PM, TMFBabo (100.00) wrote:

It's all about the accuracy. 

I dump bad picks from time to time, but only occasionally.  If a pick has a decent chance of coming back, I won't close it.  This gets me into situations like the one I face right now, where I'm nearing the 200 pick limit and I have enough desired picks to put me at 220 or 230. 

Much of what keeps me coming back to CAPS is my desire to be #1.  In real life, score is obviously all that matters.  However, I keep the accuracy component in mind at CAPS.  Does being #1 make you smarter or mean that you're better at making money? Absolutely not.  However, I find it's more fun to try to get to the top and stay there.  Without the ranking system, I'd get bored with CAPS a lot faster.

Regarding my open picks, I'm more fond of my recently opened picks than I am with my past picks, especially the ones still open from 2009.  I've often picked stocks on a whim (3 minute look at the financials) and some of them have tanked horribly since my start dates.  I'm still struggling to close picks from some days when I went nuts opening picks (June 09 and September 09 especially). 

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