Proposal to TMF: Alternative CAPS Rating System
Over the past few years, we've heard a lot of grumbling from several different CAPS players over the nature of the rating system here at CAPS. The accuracy component skews the ratings in unrealistic ways and the leveraged short-biased funds have distorted the ratings to a nearly absurd level. In fact, I could point out to you prominent people here in CAPS whose scores would go from +2500 to -2500 in a heartbeat without using the leveraged short-biased funds as a crutch.
While I do have a lot of respect for many of the CAPS players at the top, almost all of their scores are vastly inflated by these leveraged short-biased funds. And in fact, I think the ones at the top only pick these funds, because they feel as if they have no choice to under the current system. Many of them are good stock pickers, regardless, but we don't really see their picks any more, because their entire profiles consist of nothing other than red thumbs of short-biased funds.
My proposal isn't to do away with the current system, however. Implementing such a dramatic change (and changing the rules mid-game) could be problematic. Rather, it's to create an "Alternative CAPS Rating system" that goes alongside the current system. This way, people will be able to see how the top CAPS players have performed both with and without the distortive leveraged short-bias funds.
The Alternative System
The new system is simple. All that would be needed is to eliminate all picks from "Dedicated Short-Bias Funds" from the CAPS score and rating. That's it. So if a player has 200 picks, 100 from short-biased funds with a score of +5000 and accuracy of 95%, and another 100 from actual stocks with a score of +2000 and an accuracy rating of 60%; then their score under the alternatve system would be +2000 with 60% accuracy. Under the current system, they would have a score of +7000 with an accuracy of 77.5%, so you can see how it would have a significant impact on the ratings and scores.
The alternative system could be implemented in the same way that the "Top Outperform Players" has been implemented. We merely add it to the "Top Tens" section of CAPS. So, there would now be two more categories, "Top Alternative-Rated Players" and "Top Alternative-Rated Scoring Players" or something like this. That way, we could all see how the dedicated short bias funds distort the ratings and scores.
While I'd be very happy with this, I'd like to go even a step further, and for TMF to include the "Alternative Ratings", "Alternative Score", and "Alternative Accuracy %" on the "Quick Stats" page for each CAPS player. The box would need to be enlarged to do this, but it would not be an overly dramatic change.
Why TMF Should Do This
The simple reason why TMF should do this is because it's been well-known that the rating system has been mostly ineffective for a long-time. This is the easiest way to respond to that criticism without radically overhauling the system.
If I had my druthers, the entire ratings system would get a much more dramatic overhaul, but I believe that giving players the option of seeing the ratings and scores without the "Dedicated Short Bias Funds" would be a very good compromise. Yeah, OK ... the rating system doesn't make sense, but at least we can see how things would be different with a more sensible alternative.
One Final Idea
One common counter-response to the ineffectiveness of the CAPS rating system is that it was never meant to select the best stock pickers. Rather, the entire system was designed to rate stocks. However, I'd argue the flaw with that reasoning is that the 'system to rate stocks' is depedendent on the CAPS rating system. All-Star members pull more weight in the star-ratings. If these all-star members are obtaining their status merely by red thumbing short-biased funds, you're not getting very accurate stock ratings, either. Even when you are getting accurate ratings, all-star members are being encouraged to ignore actual stock picks in favor of gaming the system via dedicated short biased funds.
Therefore, while I think the CAPS rating system should stay in tact, the alternative rating system should be used for rating the stocks. Honestly, I don't expect TMF to implement this suggestion and I'd be more than delighted if we even had the option to view (within the top ten lists) the top rated players and top scoring players once you eliminate the distortive impact of the "Dedicated Short-Bias Funds".
So that's it. That's my idea. It would radically improve transparency and accountability here at CAPS, while being relatively simple to implement.