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AllStarPortfolio (50.88)

Should there be a minimum timeframe? and what about VXX?

Recs

7

May 19, 2009 – Comments (10) | RELATED TICKERS: FAX , TC

#24) On May 19, 2009 at 3:13 PM, SuperPicks (99.78) wrote:

The VXX time frame is 6-9months.  If VXX is rejected, then I would ask will FAZ pick be ended the moment the 7 day holding period is up?  If not, then when?

5 year pick today I would make is FAX.  It's a closed end currency fund by Aberdeen that will preserve capital through the turbulent markets.  It holds its funds within Asian currencies.  There will inevitably a shift of capital in the markets pouring into the emerging Asian countries which should generally bode well for the local currencies.  The price levels of world equities & developed currencies today are questionable given current debt levels.  This holding should address this concern.  More information on the fund can be found here: http://www.aberdeen-asset.us/aamus.nsf/usmutualfunds/closedfax

I would rather pick VXX today than FAX.  But if VXX can't be made, then I would defnitely like to pick FAX.

Report this comment #25) On May 19, 2009 at 3:22 PM, SolarisKing (22.67) wrote:

FAX, now that's thinkin'! there's a five year pick i like.

But the real question was, is a 6 month pick allowed or discouraged on this portfolio? VXX is not a leveraged ETF, right? and the investment should return rather well (as the great bear runs wild for "sell in May")?

What think you fools?

***********************

Currently sitting at 50 Groupies, and 71 recs. 19+ picks, and counting. I tried to add VXX to the three tickers, but it wouldn't let me for some reason.

10 Comments – Post Your Own

#1) On May 19, 2009 at 4:52 PM, Schmacko (97.08) wrote:

I don't think setting time limits makes much sense.  There's always the possibility that unforseen circumstances will arise that would make getting out of a position smarter than staying in it. 

Ex: you set the time limit to 6 months

Someone picks stock xyz with every intention of holding it long term.  After 4 months XYZ has had an amazing run but suddenly disasterous news comes out, XYZ takes a pretty big dip, your pick is still up overall, but the stock looks to be heading nowhere but down for the immediate and indefinite future.  Are you really going to make them ride it out for two+ more months of pain, and potentially turn what is still a winner into a loser based on a pre set time limit?  Or are you going to let them do the common sense thing and close that pick, possibly to revisit it again at a later date?

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#2) On May 19, 2009 at 5:05 PM, portefeuille (99.75) wrote:

I don't think setting time limits makes much sense.  There's always the possibility that unforseen circumstances will arise that would make getting out of a position smarter than staying in it.

I agree with that.

The detail-rich example is nice but does not necessarily make the claim stronger ...

 

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#3) On May 19, 2009 at 6:14 PM, AllStarPortfolio (50.88) wrote:

No, that's not what i asked. I have been clear that the pick can be closed at any time, for all the above reasons, or just if the picker finds a new favorite,

The question is about choosing. When making a choice, should the players be asked not to pick quick turnarounds, as the general agreement has been for Investing in safe and easy stocks.

So far i am leaning towards 6months+, but if enough fools answer the (right) question, then i will look for a consensus.

-solaris

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#4) On May 19, 2009 at 6:35 PM, GoodVibe4Ever wrote:

Okay! Solaris, you proved to be persistent that you will take care of this daunting job of 200 different people in one portfolio. First, I want to congratulate you for overcoming a rough start and thank you for taking the time to see this through. You can let someone else help you with the maintenance in case you need to take sometime off. 

I see that I am the last one who didn't pitch but also I read a previous post that want to take Ultra out I and understand your point of view . I don't know what all of you will end up doing but I hope you consider the following as my thought on the matter and a pitch.

BTW - You can just put the info for the one who choose a stock as a pitch and then they can do their pitch later as a respond to the first pitch. Here's mine anyway (3Months)

............ 

This is a swing trading position (unlike who correctly also believe Ultra ETFs should be used only for day trading). I wanted to choose the most "volatility decay" Ultra ETF suspect to trade in this portfolio not only because this is what I trade in real life but also as a chance for all of us to see how it can perform against investors' best picks. It's a different way to look into things even if you don't trade them yourselves.

Unlike common stock shorting that expose you to unlimited risk or options that expose you to timing factor, Ultra ETFs can give you both the best of two worlds. Maximum 100% limited risk (hard to believe as long as the issuer is solvant) with unlimited leaveraged reward. Read more on that from this post... 

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=190406&t=01009449456398254945

That said this is not an advice to trade these ETF, so take my thoughts with a large amount of salt. The mentioned post above is an extreme WRONG trade to show you how Ultra ETF can be managed even over long time period of time.

Good Fellas, we are not putting our hard earned money on the line to be right. We put our coins on the front lines to make money. Whatever makes us money should be considered. At least this is what I believe.

Ultra ETF are not only big part of the money flow in the market, it's one of the largest part. If investors will keep looking down on them in favor of an imaginary superiority towards picking individual stocks, you're missing the point of trading/investing. If someone will discount 1 billion dollars+ of daily trading value such as FAZ, then you are not representing the real market with this portfolio. Follow the money and Ultra ETF is where some of that big money

For why I am bearish on the financial market, then simply put.. if you want to buy pie in the sky, then Banks, Brokers, insurance, REIT, etc. are the way to go. The model is broke, the earning power is gone for years to come, the leverage is unsustainable, the consumer is over stretched, the available credit is shrinking, the debt destruction is still underway, and the leadership is absent. A lot of Ponzi schemes in the financial system will unravel the system soon and the outcome will not only be devastating but crushing to the system itself. Risk is extremely high and financial are on the top of that risk.

Disclosure: I trade all 3X and 2X ETF and I am in and out without notice.

Dear Fools - Be happy, do good, and the rest will be taken care of.

...........

Take Care Solaris and thanks again for taking the time to see this portfolio grows as a collective contribution from Caps' members. I will be happy to promote it and do my best for it to get improved along the way.

GoodVibe 

 

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#5) On May 19, 2009 at 6:49 PM, Schmacko (97.08) wrote:

Actually your question isn't clear at all then.  Your blog title taken at face value seems to be asking whether or not picks should be left open for a minimum amount of time, which is what I answered.  

What you seem to be wanting though, is people to say they have the intent to make picks and leave them open for more than six months... but that they can still close them at any time.  The very fact that a stock can be closed at any time (after the 7 day min) though would seem to eliminate the need to even discuss this. 

If the goal is to see if a portfolio made up of individual green thumb picks from various top players will do well, let em use their one pick to pick whatever they want for however long they want.  A lot of the top guys do what's basically the cap version of swing trading picking things for a few weeks or months with no desire to keep them open longer than that.  Saying you want someone to contribute to a portfolio and then saying they can't use the methods that (probably) helped get them there seems... silly.

If however the goal is too see if a group of top players can put together a strong portfolio based on one and only one (green) pick for a long period of time, set a time frame, have em fire and forget and take away the "can be closed whenever you want" clause.  Put the portfolio together and then come back a year later (or however long) and evaluate it then.

Also, I don't know if you addressed short position ETF green thumbs already, this is kind of going back to FAZ, but it doesn't make sense to basically say you can't bet against the market, stock, sector one way but you can this other more roundabout way.  I'm pretty sure DOG is 1x short Dow 30 as opposed to 2x DXD.  Should someone be allowed to green thumb that?             

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#6) On May 19, 2009 at 8:49 PM, AllStarPortfolio (50.88) wrote:

Thanks for your words Schmako.

   This blog may have been less clear, because i may have assumed wrongly that folks were clear on the previous discussions. I'll try to be more accurate about that in the future.

   One of the general agreements about this portfolio is that it should make life easy for everybody involved. And by easy, i mean safe.  So i'm not sure how i feel about DOG, and such. It's a good question.
   A majority of players have asked for stocks in companies only, and the ETF thing has barely slid under the wire.

   See, this portfolio will very possibly become a "real life investment vehicle. The current thought runs like this:

   We pick stock, and then set up a vehicle of some kind to invest in the entire portfolio. So changing once in a while is good, if it makes money, but the portfolio is designed to do more than give individual stock advice to individuals.
   What we want is to make a basket, and a set of guides, that allows folks who want to put their money down to do so without wondering if tomorrow someone is going to sneak a big risk in on them.
   So DOG may very well fit in those guidlines.

What do you other fools think about green thumbing 1x bear ETFS like DOG?

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#7) On May 19, 2009 at 9:28 PM, GoodVibe4Ever wrote:

What do you other fools think about green thumbing 1x bear ETFS like DOG?

....

It will not be a wise idea because Chances anyone who will do this will not outperform the S&P or at best just match it or make little gain. So it's a lost pick. Before anyone choose a pick, they must know there is a benchmark involved. It seems simple but many commit this mistake including the top players. Your pick not only must be a correct pick but also must outperform the return of the S&P 500 (for the same period you chose your pick).

If you think it's an easy feat, then know that most stocks fail to outperform the S&P 500 (can't recall the link) as well as the people who choose them. score card, and why fund managers under perform.

GoodVibe

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#8) On May 19, 2009 at 10:34 PM, AllStarPortfolio (50.88) wrote:

That is a valid argument GV especially for caps. To use DOG as a caps pick it would have to outperform the benchmark. And to do that you would have to time it, and timing the market is not a the biggest priority in the conversation thus far.
   Beating the market safely has been a priority.

   But i know very little, and so am interested in what other fools have to say, also.

-solaris

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#9) On May 20, 2009 at 4:26 AM, RonChapmanJr (99.72) wrote:

"What do you other fools think about green thumbing 1x bear ETFS like DOG?"

Not allowed.

 

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#10) On May 20, 2009 at 12:05 PM, EggplantWizard (99.79) wrote:

I agree that we shouldn't allow any effectively short bets here -- if people want to hedge for short bets, it can be done elsewhere.

 

DOG would be a bad choice.

 

 

Also, as I mentioned to you privately, in the case of the real life investment vehicle, we really need to have some sort of means of dealing with low-liquidity .OB and .PK stocks to prevent people from abusing this to front-run at the expense of the real life fund, if it ever materializes.

 

It's also not always realistic to be able to trade such stocks. A minimum average daily volume requirement might be a strong idea. If it were implemented, there would probably be nostrict need to ban .PK and .OB stocks.

 

I will copy the latter part of this post to the more recent blog post on the matter, as well.

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