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srkenne264 (99.37)

Outperform vs. Underperform

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November 26, 2010 – Comments (15) | RELATED TICKERS: LVS , BGZ

In a previous post I mentioned that it seems that outperform picks have delivered higher point totals than underperform. If you look at LVS it has delivered 2900 points to several caps members. In fact if you look at the All-Time Best picks you will find that there are no underperform on the list. The real reason is that if you pick an underperform and hold it to 0 ( the most points you will make is 100 without any affect of the SP) - I checked the highest score from TMFStockSpam and its +110.02 so the SP does allow better than 100 .

You could make a 1000+ points (in theory) on an underperform by ending every time it hit 50% of its value and re-picked. Or in the case of a cyclic pick (BGZ - Which our current leader TMFBabo has picked underperform 16 times and has accumulate well over 100 points) if you get in and out correctly you can make 100+. I have not found any series of underperform picks that have delivered over 250 points. It would be very difficult to make that many correct decisions in a row so TMFBabo performance may show an upper bound.

I also think that the outperform picks allow a much more passive pick (again for LVS) - Vader1088 has 4 picks from 3/9/09 one of which is LVS and has accumulated over 2812 points. If it had been a underperform it would have not have been able to score so well.

In the short term it appears that outperform also scores slightly better - if you take a quick look at the leaders Vanamodes has 4 underperform out of 174 active picks, chk999 has 62 out of 186, BravoBevo has 19 out of 193, TMFUltralong has 83 out of 119, and TMFBabo has 83 out of 171. Or 251 underperforms out of a total of 843 active picks. So the best players have (at least in the current market) a tendency to pick outperforms more often that underperforms.

Although TMFBabo has 8 underperforms out of his top 10 picks of all time...

So maybe it’s the small wins that make a leader, just my current thoughts.

15 Comments – Post Your Own

#1) On November 26, 2010 at 1:04 PM, TMFBabo (100.00) wrote:

How could I not comment here? 

I think you're not looking at all my picks.  If you sort by "all" instead of by "ended", you'll see that I have 3 of my top 10 picks are green thumbs.  You seem to have failed to account for my best pick so far, KV-A (an active pick), which finally got me my 200 charm.

For an underperform with over 250 points, go to LNCM.PK.  I knew TSIF or Bravo would come through for me with a 250+ underperformer - TSIF is +292.85 as of right now.  Those 2 are the first names to mind when you posed that thought, while LNCM.PK is the first ticker to come to mind.

I'd say around 19 or 20 of my active red thumbs are inverse ETFs, so I'm more "net long" than it would seem by looking simply at green vs. red.  

Very early in the process, I made a pretty big decision to go for accuracy instead of tons of points.  I closed several future 300 point green thumbs and decided to bank accuracy.  I thought to myself at the time that it was like selling my soul to the CAPS devil.  I don't think any of my picks would've reached even 600 points, but many of them would've gone high enough to make me a LOT of points.

Since my portfolio is net long, I expect to earn points and be able to bank score/accuracy when the market goes up.  When the market goes down, I hurt, but not as badly as those who are 100% long.   

I enjoy my #1 spot, but I will be taken over by a bull when one of them crushes me in score while also maintaining very high accuracy.  100ozRound currently leads the list of bulls that I think will overtake me whenever the market decides to go a good deal higher than it is right now (however long it takes - it could be weeks, months, or years).   

I also face competition from those who've picked more ETFs than I have, but they too will be beaten by a 90%, ridiculous score bull in the future. 

I now wish I'd left a few of my extremely low cost basis picks open (I didn't have to go all-in with the accuracy strategy), but what's done is done.  I can't argue with the results, since it got me here, but I will absolutely be taken over in the long haul and I will only hope to maintain top 10 at that time.

I don't know about others, but I put a lot of thought into CAPS strategy.  It helps to be a good stock-picker, but it helps even more to use some strategy.  There are green thumbs that act differently from other green thumbs (dividend payers) and a whole slew of other things I refuse to divulge publicly.   

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#2) On November 26, 2010 at 2:50 PM, srkenne264 (99.37) wrote:

TMFBabo

 Sorry - your correct I looked at ended.  Thanks for your comments and I appreciate you insight and your blogs.

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#3) On November 26, 2010 at 2:51 PM, 100ozRound (99.78) wrote:

Thanks for the nod Babo.  To be honest, it will take a lot for me to overcome what you have done.  See that spike in my score?  That was a 12,000 point jump because of a 100 to 1 reverse split.  That 12,000 point spike put me in second place behind you for the day I was there.  That's double my current score if I retain my accuracy. 

A couple of things to think about: whether it is better to bank accuracy for long term picksor not. I started banking accuracy on picks that were up between 10 and 20 points.  I'd close them and repick them;  but the points are based on percentage gained against S&P (I'm talking only about outperforms here - I don't have experience with how the underperforms actually work).  So after a while I realized I would have done better to just leave the pick open (because of the spread in percentage gain due to what I call Caps slippage - both your pick and the S&P reset at 0 when you close and then reopen a pick) instead of banking the accuracy points because the total percentage gain would be much higher and the difference in accuracy over the long term would be negligible. Sorry if that came across as too stream-of-conscious.  That's exactly what it was.

In other words, had I not banked the accuracy, I think my score would be much higher and the accuracy would be probably be about the same if not better.

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#4) On November 26, 2010 at 2:52 PM, 100ozRound (99.78) wrote:

picksor = picks or

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#5) On November 26, 2010 at 3:42 PM, portefeuille2 (99.72) wrote:

"net long"

One could call that "high net alpha". The score line comparisons show this quite nicely (my player portefeuille2 has made almost no "underperform" calls) ...












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#6) On November 26, 2010 at 3:47 PM, portefeuille (99.74) wrote:

comparison of 2 of my 12 players.

Looks like just another one of the figures above ...

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#7) On November 26, 2010 at 4:01 PM, portefeuille (99.74) wrote:

The "point scores" of the "high net alpha" players with a currently highest point scores are "usually highly correlated". Towards the end of a trading day you can usually get a decent estimate of the relative change of the S&P index vs. the "prior close" just by a casual glance at this list.

first page of that list.



enlarge

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#8) On November 26, 2010 at 4:08 PM, portefeuille (99.74) wrote:

by a

by having a

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#9) On November 26, 2010 at 5:21 PM, TMFBabo (100.00) wrote:

@srkenne264: No problem! Glad to see I've made a positive impact on your CAPS experience. CAPS strategy isn't often talked about, but I argue that many top players consider advanced strategies in order to remain top players - strategies more complicated than "make awesome picks."

@100ozRound: I assumed your accuracy would eventually climb to 90% or higher when saying you or a different "bull" (yes man type) would take me over.

I'm glad to see you taking strategy heavily into account. I'd argue that many of the top players actually consider a great deal of strategy before making their decisions.

@portefeuille: I can see why you see I meant net alpha.  I meant to say that I'm sort of long/short based on my picks that will benefit when the market goes up vs. the picks that will benefit when the market goes down.  I sort of assumed that they would all outperform (which they won't), which is where you picked up that I was talking about outperformance and not the status of my hedging.

I don't know when it happened, but I finally passed LanternTrades in points - that guy used to be top 3 for a really long time.  Bravo, translator999, AndreyLikesMTL, and other new faces continue to eat my lunch in points (and pull away from me), however. 

When the Dow goes 2000 or 3000 points higher (again, timeline unknown), I predict I have a 50-50 shot of appearing on the first page of point scorers.  One of them will likely have a very high accuracy (by very high, I mean 88-92) and take me over for good.  Unless my score is top 50 and accuracy is 93 or 94 at that time (which I don't think I can attain), I won't be able to stop the several people who will pass me for good. 

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#10) On November 26, 2010 at 7:15 PM, hall9999 (99.64) wrote:

BravoBevo managed to rack up about 360pts going 18/20 on underperform picks in PALG.OB.  He also got about 400pts hitting 8/10 on outperforms.

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#11) On November 26, 2010 at 7:18 PM, portefeuille (99.74) wrote:

I can see why you see I meant net alpha.

I meant beta.

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#12) On November 26, 2010 at 8:17 PM, scruffy4life (82.54) wrote:

I predict I have a 50-50 shot of appearing on the first page of point scorers.  One of them will likely have a very high accuracy (by very high, I mean 88-92) and take me over for good.  

Scruffys takin' that bet,

mmm-hhmmm!

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#13) On November 26, 2010 at 8:40 PM, TMFBabo (100.00) wrote:

@hall9999: I can't believe I forgot PALG.OB.  I was one of the unlucky few who red thumbed it at $2.65 and never got my points back.  I was -700 most of the time, but finally ended it at around -250 not long before it was discontinued in CAPS.

@portefeuille: That makes much more sense.  I guess how much they go up vs. how much they go down is based on how much of their calls are outperform vs. underperform and also what the market did that day.  I'm guessing you're saying that the points-per-pick profile of players with similar betas will be similar on most days, if I read you correctly.

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#14) On November 27, 2010 at 1:54 AM, TMFUltraLong (99.98) wrote:

I'm learning recently just how important accuracy is if I didn't know that already... if I'm at 85.96% I'm in 7th, if I jump to 86.19% I'm in 2nd.... that system is quite fickle. Luckily I'm making a run at Babo's accuracy. The gap has closed from 7% to about 3.5-4% in less than a month.

TMFUltraLong

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#15) On November 30, 2010 at 5:00 PM, lemoneater (84.45) wrote:

portefeuille-great visual aids.

 

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