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My CAPS Shipwreck

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May 18, 2007 – Comments (8)

So my CAPS portfolio has gotten extremely sick lately, thanks in significant part to just a handful of really poor underperform calls. The most recent? Odyssey Marine (OMR).

This is a treasure hunting company -- they find shipwrecks and they hope that there is sunken treasure on board. Well, today they announced that they had, in fact, found sunken treasure. Not only did they find treasure, but early reports indicate that they found a record amount of treasure. The stock is up almost 60% today. 

So now, with my CAPS score badly beaten and bruised, it may be time for me to see what I can do to salvage my own shipwreck (maybe I'll find some sunken treasure?). For now, I guess all I can really say is "well done" to the enterprising (and maybe just a bit lucky?) folks over at Odyssey Marine.

Oh yeah, and all glory to the Hypno Toad...

Kopp 

8 Comments – Post Your Own

#1) On May 18, 2007 at 2:36 PM, chk999 (99.97) wrote:

I would suggest that you stop ending losing positions. All that does is lock in inaccuracy and that really hurts your standings.

On OMR, all I can say is "ouchie!".  

 

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#2) On May 18, 2007 at 3:55 PM, FoolishChemist (97.13) wrote:

I was wondering if the Fool punishes bad employee Caps players and rewards the good players.  Not they could really blame you regarding OMR.  Sometimes companies get lucky.

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#3) On May 18, 2007 at 6:08 PM, hhasia (66.68) wrote:

Kopp 

I know the feeling. Mine came as a result of a glitch, I did not know what to do. The feed input wrong numbers, and I closed a winner..........

I just don't understand CAPS.

Good thing the real $ are here in Hong Kong.   Pick China . Going to be a HOT summer.

A) new investment from China domestic banks ( changed from Beijing last week)

B) Appreciation of RMB

C) Continued strong growth for the solid businesses ( not spec)

HH 

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#4) On May 19, 2007 at 5:36 AM, TMFKopp (97.84) wrote:

Thanks for the recommendations all. 

Fortunately it does not look like I am going to be taken out back of Fool HQ and tarred and feathered for my lackluster CAPS performance... Though I'm keeping a low profile just in case.

I'm actually reading the manuscript of Prof Damodaran's book Investment Philosophies (it's online!) and the first chapter talks about how difficult it is to put together any sort of decent investing performance if you're not grounded in some philosophy (any philosophy) that guides your picks.

Thus far my CAPS picks have been all over the place and I've been using a number of different strategies (timing, value, growth, etc). The results have not been inspiring. When investing for my personal portfolio ("real money") I pretty much stick to a value orientation and the results are thankfully very different.

It looks like it may be time to bring some more discipline to my CAPS portfolio... though I may not be able to help continuing to put in some fun picks as well. I think I've learned my lesson on treasure hunting companies though. 

Kopp 

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#5) On May 19, 2007 at 2:12 PM, camistocks (< 20) wrote:

Today treasure hunting has very little to do with luck. It is a highly professional business and they are using the latest technology and diving robots.

They could almost be compared to gold miners. First they explore (and lose money for years), and then it's harvest time...

As the Guardian reports: New technology is making the situation acute, Dr Marsden said: many sites that were protected because they were inaccessible for divers, can now be located, searched and salvaged using remote equipment. Odyssey, using such expensive equipment that the company recorded losses in years without a major find, is on the trail of several other wrecks, including HMS Sussex, an English ship which sank in a storm of Gibraltar in 1694, said to be carrying nine tonnes of gold coins.

And:

Another salvage firm, SubSea Research, again using remote equipment, believes it has located the 18th-century French Notre Dame de Deliverance, which also sank in a hurricane shortly after leaving Cuba, with a cargo said to include 17 chests of gold bullion, 15,000 gold doubloons, six chests of gems and more than a million pieces of silver - estimated at over $2bn. 

I hope they don't find too many shipwrecks, as this will increase the supply of gold and silver, and thus may weaken the bull market... ;-)

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#6) On May 21, 2007 at 3:11 AM, TMFKopp (97.84) wrote:

Mind you treasure hunting firms are probably never going to be a part of my real portfolio, but I could buy into the argument that it's not about luck. At least as far as finding the wrecks goes -- what's on the wrecks is another matter. They may use technology to find and explore the wrecks, but if what they thought was on it isn't there, then they've still wasted time and money.

In any case, I'd probably liken them to the biotech firms from the perspective that a lot of investment goes in up front and valuation would be based on probabilities of finds of certain sizes.

Maybe there's someone out there that's done some treasure hunting company valuations?

Kopp 

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#7) On May 21, 2007 at 6:20 PM, camistocks (< 20) wrote:

I don't know how they call it but every country or port must have some logs of every ship that left and what their freight was. So you know if a ship that quit a port, but never arrived at their destination, because it sunk in a storm or by a warship, was loaded with gold and silver (=good) or simply with food or slaves (=uninteresting...).

There are of course some problems, like sharks (pun intended):

We do believe that most shipwrecks that we recover, including the "Black Swan", will likely result in claims by other parties. Many will be spurious claims, but we anticipate that there might be some legitimate ones as well. In the case of the "Black Swan", it is the opinion of our legal counsel that even if a claim is deemed to be legitimate by the courts, Odyssey should still receive title to a significant majority of the recovered goods.

But it looks as if they have found a second potential source of revenue:

We can confirm that Odyssey and the Disney organization have recently entered into a relationship on a number of projects, and that the two companies are in discussions relative to some new partnership opportunities.

We have immense respect for Disney and believe that a combination of Odyssey's authentic deep-ocean adventures coupled with Disney's story-telling, film-making, television and marketing capabilities will reap benefits for both companies, while providing the public with an unprecedented opportunity to enjoy the thrill of deep-ocean exploration.

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#8) On May 22, 2007 at 1:56 PM, TMFKopp (97.84) wrote:

I was interested enough in OMR that I went ahead and highlighted it in an article that went up today.

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