My Best Picks! (They may not be what you think)
A few times I've run into Fools who look at a pick list the size of mine, or Seth's (TMFBent), or Bill Mann's (TMFOtter), and ask themselves, "With so many picks, how am I supposed to know which ones they think are their BEST picks?"
That's a good question - and I thought I'd take a moment to try to answer it. My best picks, though, might not be the ones you think.
My highest scoring picks to date, CHSD and PGWC, aren't my best picks. Frankly, I stole those from better dumpster divers than I can ever hope to be. Sure, I recognized them for the junk they were once I heard of them, but picking those to underperform was like shooting fish in a barrel. Hardly what I'd consider my best work.
Of course there's my own foray into dumpster diving. I was the first to call underperform on AFVS.OB - and I have to admit, finding that company, making that pick, and mocking it mercilessly in my pitch was certainly a whole lot of fun. My best pick in CAPS to date, though? Hardly. Again, that pick seemed, and still seems, to be like shooting fish in a barrel. The only hard part was finding it in the first place. Once found, it took little insight or analysis on my part to determine it was worthy of an underperform call that would almost certainly be successful.
How about my foray into alternative energy - especially fuel cells and ethanol? We're getting a wee bit warmer here, but still not my best picks to date in my view. I've long been bearish on alternative energy - ever since I made the huge mistake of getting caught up in the hype myself a few years back and investing in BLDP with *real* money. I got out before I took much of a loss, thank goodness - but I didn't contribute anything new, or learn anything really new, with any of those picks.
While I don't have a singular best pick, I do have a few that I think are among my best.
The first (temporally speaking, not necessarily the best) may have been my underperform call on Ann Taylor (ANN). Why this pick? It certainly hasn't been my highest scorer - it netted me about 12 points. This is one of my best picks because at the time I made it, I was the only Fool to be thumbs-down on this retailer. I saw what looked to me like a bit too high a valuation, and acted on it despite the overwhelming outperform sentiment of my fellow Fools. I could have looked at the CAPS rating and said, "Zero underperform calls? There must be something I'm missing, I think I'll pass." but I didn't. I learned a great deal from having the courage to trust my instinct and make this call despite what my fellow Fools thought, and that's why I think this was one of my best picks.
Another of what I consider to be my best picks is Dell (DELL) - and for similar reasons. At the time I pointed my green thumb upward on Dell, the stock had a lowly one star CAPS rating. You can read my pitch as to my reasoning for making this pick - and while it's far too early to tell whether or not Dell will be a long-term outperformer, I'm up about 20 or so score points as of this writing. Again, I think this is one of my best picks because I learned a great deal from making it.
Other contrarian picks I've made that I think were among my best were my underperform calls on Whole Foods and Wild Oats and outperform calls on a basket of hombuilders. It's a pretty neat feeling to bet against popular sentiment, and be proven right (at least in the short-term). While time will tell if this is something I can keep up in the long-term, I'm learning to trust my instincts more and more as my experience with CAPS grows.
One more pick that I think is worth mentioning... it happens to involve two CAPS calls, but is really one 'pick' - my outperform on Intel (INTC) and my underperform on Advanced Micro. (AMD). Again, you can read my pitches for my reasoning (especially my INTC pitch) - but with these calls I applied a concept that's been floating around in my brain for years, but which I had never acted on when it came to the stock market. CAPS gave me the opportunity to put this concept into action, and again, at least in the short-term, I seem to have been proven right. And here again, I learned a great deal - which is why I think this is also one of my best CAPS picks ever.
Though I didn't intend for there to be one when I sat down to write this blog post, looking back at what I've written there seems to be a central theme, of sorts, to all of my 'best' picks. That being that these were all instances where I put thought into action that I'd never put into action before, and learned a great deal from the experience. Sure, these were all successful CAPS calls, and I've had quite a few unsuccessful ones along the way as well, but it is with these calls, and others like them, that I'm slowly beginning to come around to the idea that this thing I call 'instinct' or 'intuition' might be a more powerful investing tool than I'd ever realized before.
I still have *a lot* to learn - several lifetimes wouldn't be enough to encompass it all, and I am doing my best not to let a few short-term successes go to my head, but I'm really looking forward to learning more and more about investing, and perhaps more importantly, learning more and more about myself through the process - and CAPS, and these 'best picks', and more 'best picks' in the future (successful scorers or not) will hopefully help me accomplish that.