Sell Rule for 'Underperform' Picks?
Fellow CAPS competitors,
Nearly half of my 194 active CAPS picks are 'shorts' (or 'underperform', technically). Given that all my picks were selected systematically through a screen, I don't have any particular insight on the average pick; i.e. I have not developed an in-depth fundamental understanding of the company, its prospects and its valuation.
In that context, I think it may be useful to institute a systematic rule for closing out 'underperform' picks that move substantially against me.
My question is: What are your thoughts on an appropriate level to systematically close an 'underperform' pick? A score of -50? -100?
Please give some reasoning for your choices.
Alex Dumortier (XMFMarathonMan)