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It's all luck anyway!

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October 27, 2007 – Comments (1)

Uh, I mean my rating is down 16 today. Bummer. But my real $ portfolio is up substantially. I haven't crunched any numbers yet, but it's obviously the best one-day percentage move in quite some time.

So what's up with this divergence? Simple, really. I have not short positions, puts, or anything else pessimistic in my r$p. Not that I'm not pessimistic about anything, I just don't like the danger of shorting (and I don't know how to do it), and I haven't put forth the requisite effort to research puts well enough to buy any. My CAPS picks, on the other hand, are mostly shorts, primarily housing, mortgage, and VG. The market is up today, led primarily by housing, mortgage, and VG. I don't know why VG is all of a sudden linked to housing, but it's probably just that my CAPSing is probably hexed.

At least they can't take my pencil charm away. And I'm giving up the eye-roller on my own terms. The rest will probably be stripped from me over the next 2-3 months (unless one of them is permanent).

I hope that whoever gained 16 percentiles on his player rating today on the strength of his housing (and VG) outperforms is happy.

1 Comments – Post Your Own

#1) On October 29, 2007 at 1:55 AM, FleaBagger (29.75) wrote:

It's better this way than vice-versa. Or is it?

If I were to have strong convictions about the value and potential of a company based on its management, balance sheet, and the long-term outlook of its economic opportunities, that would put it at a relatively stable long-term value $(x). If it is at $(0.5x) today, and it drops to $(0.4x) over the next few weeks, that's actually a good thing, assuming it climbs back to within one or two percent of its long-term value over the same time horizon. That's because of the opportunity to buy more shares at a lower price through further investment and dividend reinvestment. If it were to rise steadily to $(x), my overall cost basis would be higher, reducing the total value of my portfolio in the long run.

So I'll keep stocking up on HERO, and if I get some more positive feedback on BBSI before it goes back up (if it goes back up), I'll stock up on that too.

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