gameguru's Blog

Capital One: Two-Faced or a Single Coin?

gameguru — Fri, 20 Jul 2007 11:22:55 GMT

The market doesn't know what to make of Capital One. Is it a high-growth, high-risk, low-yield lender, or a low-growth, low-risk branch bank that should be offering a high yield? The answer is simultaneously both and neither, yet it's hybrid identity has the market pricing it as the worst of all possible financial institutions - expecting low-growth, high-risk, and low-yield. While it is certainly a low-yield stock, that's because Capital One has consistently been able to get h...

CAPS5StarIndex and CAPS1StarIndex: The meaning of their anti-correlated relationship?

gameguru — Fri, 01 Jun 2007 15:19:18 GMT

The CAPS5StarIndex and CAPS1StarIndex have been "live" for the last 7 months, since November 1, 2006. Although this is certainly too brief a time to definitively judge their performance, both indices are doing quite well so far. The CAPS5StarIndex had, as of market close on May 31, a cumulative score of +1491.01 and an average score per pick of +2.63. In the same vein, the CAPS1StarIndex had a cumulative score of +1616.56 and an average score...

No More Mister Nice Guy: My First Red Thumb

gameguru — Mon, 09 Apr 2007 17:33:45 GMT

I just gave up my "Yes-Man" charm by calling underperform on my first stock since joining CAPS. Personally, I wish that charm wasn't quite so strict, perhaps indicating individuals who "primarily" (by some measure that we could debate) call outperform. So why a red thumb from me now? Have I discovered some insanely over-valued stock or a scam of a company that is sure to plummet toward bankrupcy? Have I uncovered the next great short oppor...

Always Cut Your Losses!?

gameguru — Thu, 25 Jan 2007 14:20:51 GMT

I came across this article today:
http://biz.yahoo.com/ibd/070124/corner.html
Based on the CANSLIM method, it advocates ALWAYS cutting your losses when they reach 7-8% of the position. No exceptions.
I've known about CANSLIM for many years, and I've corresponded with people who swear by it, but it has never really appealed to me as an investm...

My Favorite CAPS Picks

gameguru — Fri, 15 Dec 2006 00:00:14 GMT

I don't have nearly as many CAPS picks as some other players - I've only made 18 picks since I started back at the end of August 2006. That's only about 5 picks/month. With so few picks, each one is a call I've thought about, committed to, and ultimately believe in. Yet, I can look back and easily pick out a few calls as being my favorites of them all. The three picks I would name as my favorites (COF, LUK, and FUN) share many common traits. They were all made on the same ...

How To Create and Maintain an Index Portfolio in CAPS

gameguru — Mon, 11 Dec 2006 13:21:30 GMT

I’ve been asked how difficult it is to select and maintain stocks in the CAPS5StarIndex and CAPS1StarIndex. Currently, I consider it to be quite a hassle, somewhat time consuming, and occasionally frustrating. Hopefully, the CAPS team will be implementing some changes in the near future that will make it easier to actively use the data from CAPS searches and to maintain portfolios with many picks. Suggested changes include: eliminating the pop-up boxes associated with ticker...

Gauging the Usefulness of Star Ratings

gameguru — Wed, 06 Dec 2006 17:15:21 GMT

I was looking over the performance of the CAPS1StarIndex and CAPS5StarIndex today and I noticed that both of them are substantially outperforming the market. That is, if you had made outperform picks on all 200 of the stocks in either index, you would have a positive score in the CAPS system. (Note that CAPS1StarIndex currently has a negative score, as it makes underperform calls.)
The following then occurred to me:
The “market” benc...