Use access key #2 to skip to page content.

well I made the top 100 in CAPs... or maybe 3rd

Recs

8

August 28, 2009 – Comments (27)

Well I made the top 100 in the CAPs game today, 80-somethingth. 

And I noticed that only 2 players had as many points as I do and a higher average score per pick.  Those are Ultralong and Porte.  Ultralong is a bit of an exception as the preponderance of that players picks were made on march 9th and the profile benefits dramatically from market timing.  So maybe I'm second to Porte.  I do think that pick per score should be weighted (along with dividends, just add dividends paid out to the current PPS for calculations...) far more heavily than it is.  My score is currently maimed a little by two accidental recommendations:  CEP and TBT.  CEP should still work out in the long run and, in a twist of fate, I've bought a few shares in real life after seeing it on my CAPs portfolio.

So it would appear that Porte may be the winner.  Bulls win, even though the market is down dramatically since CAPs began???  

Caps needs to try to simulate actual returns alot better than it does, and it should penalize us by 0.1 or 0.2 or 0.5% for each transaction to boot.  Its sort of a game designed to benefit gamers rather than simulate investing.  

Its a natural gas MLP thats thoroughly in the toilet and trading for a tiny fraction of book value.  It should recover with time, pay-down of debt, and increasing natural gas prices.  

Nothing imporant in this post, just making an observation.  Here on CAPs as in real life, I'm reducing my long exposure.  Should the market tank drastically once again, I'll enter some more picks. 

Hope nobody is bitter about a thread about basically nothing.  I'll pony up a better one in a moment!

27 Comments – Post Your Own

#1) On August 28, 2009 at 7:33 PM, Tastylunch (29.54) wrote:

Caps needs to try to simulate actual returns alot better than it does, and it should penalize us by 0.1 or 0.2 or 0.5% for each transaction to boot

I firmly disagree. Caps is ratings game not an investing game. Transaction costs do not matter to stock analysts

Its sort of a game designed to benefit gamers rather than simulate investing.  

It never was intened to simulate investing.

The purpose of CAPS is to create generate star ratings for stocks not determine who is a good investor.Basically the objetcive of CAPS is to find good stocks not investors,

It's a sell side analyst game.

congrats on your well deserved success.

Report this comment
#2) On August 28, 2009 at 8:33 PM, portefeuille (99.56) wrote:

My average score per pick (aspp) is currently ca. 18.84, so not that great. I have a player though that behaves very much like you and does have an aspp close to the one you have. 

 

It is just that portefeuille9 (the player formerly known as "ahedgefund") has made more calls so far (109 vs. 68).

Report this comment
#3) On August 28, 2009 at 8:46 PM, portefeuille (99.56) wrote:

By the way, as has been demonstrated by bigpeach an algorithm can create a "caps" game player with an "accuracy" of around 85% and (using the still "wide open" backdoor known as the "20 minute delay" (see comment #10 here)) an aspp of more than 5% within a few weeks creating, on the first try (so not taking advantage of the ability of creating a high number of new players.

So if some player is ranked higher than you and has an aspp of around 5 and an "accuracy" of around 85%, maybe it is just a computer ...

Report this comment
#4) On August 28, 2009 at 8:57 PM, portefeuille (99.56) wrote:

The good thing is that a human being can quite easily distinguish "intelligent" action from unintelligent one. Just have a look at what calls the player has actually made. It can leave you shaking your head, but every once in a while you actually find someone that is clearly neither a computer algorithm nor someone obsessed with gathering "anything exceeding 5" score points for calls on stocks that the world could hardly care less about.

Report this comment
#5) On August 28, 2009 at 8:59 PM, portefeuille (99.56) wrote:

checklist34 is one of the good ones!

Report this comment
#6) On August 28, 2009 at 8:59 PM, portefeuille (99.56) wrote:

an aspp of more than 5%

an aspp of more than 5

Report this comment
#7) On August 28, 2009 at 9:23 PM, portefeuille (99.56) wrote:

... unintelligent one.

... unintelligent action.

Report this comment
#8) On August 28, 2009 at 10:48 PM, sentinelbrit (89.39) wrote:

I can't get out of a rank between 1000 and 1200. On some days I have broken 1000 but not consistently. Virtually all my picks in CAPS are stocks I own in my real portfolio. So, my caps reflects my decision making in real time. I have been thinking about running a portion of my portfolio for income but wonder if it will be detrimental to my overall score. Congrats on your scoring!

Report this comment
#9) On August 28, 2009 at 11:13 PM, checklist34 (99.73) wrote:

tastylunch:  taking all that you offered at face value, it becomes a dramatic shame that here on the CAPs blogs players with higher scores are given so much more credence than others. 

Because lets face it, alot of the very highest scoring players, if you looked at their picks in light of a portfolio, the return would not only not be the best, but in some cases it may not even be.  

The system is not well designed, and I just can't see a way around that little point.  :)

Report this comment
#10) On August 28, 2009 at 11:17 PM, checklist34 (99.73) wrote:

Brit, I for the most part have also only picked moves I've made in real life.

Alot of moves I made in real life I have basically forgotten here on CAPs.  Like going long LVS and WYNN in late february, and BYD and MGM (also in late feb, but here on CAPs I forgot to rec it until it was like 9 bucks).  And many financials like BAC, C I was long on but never rec'd.  Whatever.

Some things have also gone better here on CAPs.  Like HIG I rec'd at like 3 on CAPs with a real life average of like 7.  

Overall, CAPs has reasonably well reflected by real life performance.  Roughly when my CAPs score went positive, my real life portfolio went positive.  Etc.  

I also wonder about my recent rec's of high dividend stocks FSC, HTGC, aRCC, AINV, PNNT, PSEC, etc.  I am comfortable that over time they will handily beat the market if dividends are taken into account in some reasonable way by CAPs, but if divi's aren't, those pics could well lose.  oh well

Report this comment
#11) On August 28, 2009 at 11:32 PM, checklist34 (99.73) wrote:

oh yeah, that is porte9 that I saw.  good average score though.

ktrotter has basically identical # of points to me and a better average score, so he'd have to be considered ahead.

I too shake my head at 10,000 points with an average score of 6.49, lol

Report this comment
#12) On August 28, 2009 at 11:42 PM, Tastylunch (29.54) wrote:

checklist34

 it becomes a dramatic shame that here on the CAPs blogs players with higher scores are given so much more credence than others

I agree in that respect. Too much "respect" is given by other mmeer sof the community to top players. Big Peach pretty much shredded that one if there was any doubt. All a high rating means is that you are good at playing CAPS, nothing more.

But I do think CAPS succeeds at what actually attempts to do (create meaningful ratings for stocks). So I don't think weighting/transaction costs etc won't be useful for its true purpose.

P.s. CAPS does give you credit for dividends it deducts it from the start price

 In any event congratulations again on your success.

Report this comment
#13) On August 28, 2009 at 11:51 PM, checklist34 (99.73) wrote:

hey tasty, thanks for the input.  I think I should have 2 deductions from XL for divi's, not just 1, but I have only 1???  I got nothing.

I think its a shame the intent of the CAPs ratings aren't better disclaimed so that people don't mistake a high rating for godly advice-giving ability...

Report this comment
#14) On August 28, 2009 at 11:53 PM, checklist34 (99.73) wrote:

porte, are all your players long-only or do you to long/short?

ever tried a pairs-trade player?  thats always long/short pairs of stocks?

Report this comment
#15) On August 29, 2009 at 12:01 AM, Tastylunch (29.54) wrote:

Mmm My apologies Checklist

actually I made an error. It doesn't work How I thought it did.

Portefeuille explains in Bigpeachs post around commnet #47 how dividends are actally treated

New Start Price = Old Start Price * Reduction Factor

Where Reduction Factor = 1 / (1 + Dividend / Post-div Price) 

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=215674

That probably explains why it looks funny.

Report this comment
#16) On August 29, 2009 at 12:08 AM, portefeuille (99.56) wrote:

About 95% of the calls I have made so far are "outperform" calls. I have thought about starting something like a DAX30 long/short player. But as long as the players are not separated into "primary" and "secondary" players it might be a good idea to keep these activities confined to my blog posts.

And can someone finally allow me to correct my own blogs and comments?

-----------------

... within a few weeks creating, on the first try (so not taking advantage of the ability of creating a high number of new players.

... within a few weeks on the first try (so not taking advantage of the ability of creating a high number of new players). 

----------------- 

grrrrrrrrrrrrrrrrrrrrrrrr!!!!!!!!!!!!!!!

 

Report this comment
#17) On August 29, 2009 at 12:11 AM, portefeuille (99.56) wrote:

#15 oh yeah, good old dividend confusion. that really is done correctly in the "caps" game.

Report this comment
#18) On August 29, 2009 at 12:16 AM, portefeuille (99.56) wrote:

that really is done correctly in the "caps" game.

correction. Even that is not really done in an intelligent way as I explain in the discussion tastylunch mentioned above. I described the way it should be done using the pre-dividend price.

Report this comment
#19) On August 29, 2009 at 12:19 AM, portefeuille (99.56) wrote:

done commenting here. i simply make too many mistakes.

(replace either "explain" by "explained" or "described" by "describe" in comment #18 for reasons of symmetry, hehe ...)

Report this comment
#20) On August 29, 2009 at 12:36 AM, checklist34 (99.73) wrote:

lol porte.

tasty, thats an interesting and odd way of incorporating dividends.  the quirks of CAPs make me wonder if it was set up to favor bears intentionally... to neutralize the intrinsic advantages of "long" positions -vs- "short" positions.

Simply adding all cumulative dividends to the current PPS for the calculation is simple and would be effective.  Similarly, add dividends to PPS for short positions...  

If you bought ACAS's IPO and held through today you'd be down a huge % of your money on the PPS, but still up a multiple of your money counting dividends, handily outperforming the market.  Would CAPs reflect this as a win or a loss?

Maybe my rec's of high yielding BDCs is a bit ...  a bit of a CAPs game blunder?  We'll see

Report this comment
#21) On August 29, 2009 at 1:03 AM, TMFUltraLong (99.96) wrote:

Once again let me apologize for accidentally timing the market correctly...i promise to never let it happen again =)

UltraLong

Report this comment
#22) On August 29, 2009 at 1:24 AM, portefeuille (99.56) wrote:

okay, one last comment.

The formula should be
a -> a * (1 - d/b), where a is the old cost basis, d is the dividend and b is the price before the dividend is paid, so the "factor" is (1 - d/b).
With this x = (1 - d/b) you have
(b - a)/a = (b - d - xa)/xa.
Another way to arrive at this:
Before the dividend you have n shares with a cost basis of a/share.
You get nd/(b - d) new shares ("dividends reinvested").
So the new cost basis is na/(n + nd/(b - d)) = a * (1 - d/b) = a * 1/ (1 + d/(b - d)).

The "Post-div Price" (p) is not necessarily equal to "Pre-div Price (b) minus dividend (d)", so the formula used in the "caps" game is only correct when p = b - d.

Report this comment
#23) On August 29, 2009 at 1:36 AM, checklist34 (99.73) wrote:

ultra, thats not entirely reasonable.  Good luck with the post-march 9th era, it was nice to see you the #1 fool.  :)

Porte, subtracting divi's from initial cost is ... too favorable to divi's as you observe.  eventually we'd have zero or a negative share price.  But simply adding them to PPS for the calculation is emminently reasonable in my view.

The formula you describe above is beyond my current cognitive capacity, lol.  I am officialy vegetative for the remainder of the day, and thats final.  But I take they assume reinvestment of thedivi's?  so if XL pays 10 cents ... today I get an additional 0.005 share or whatever?  

That is still irrationally unfavorable to divi's, they should simply add the divi's paid to the pps for calculations, period.  :)

Report this comment
#24) On August 29, 2009 at 5:18 AM, portefeuille (99.56) wrote:

No, the formula I give is the one to use. What you want is that the "performance", i.e. the relative change, is not affected by the dividend payment.

The relative change before the dividend payment is

(b - a)/a,

where b is the price before the dividend is paid and a is the old cost basis.

The relative change after the dividend payment is

(b - d - x * a)/(x * a),

where d is the dividend and the new cost basis is a * x, i.e.

x = old cost basis / new cost basis.

So all you have to do is solve

(b - a)/a = (b - d - x * a)/(x * a)

for x, giving you x = (1 - d/b).

Another way to arrive at this:

Before the dividend you have n shares with a cost basis of a/share. You get n * d/(b - d) new shares ("dividends reinvested"). So the new cost basis is

n * a/(n + n * d/(b - d)) = a * (1 - d/b).

So the only problem that could arise is the case where d > b, making x = 1 - d/b negative. But cases in which the stock price right before the dividend payment b is smaller than the dividend d are "rare" and should probably be treated individually since the reason for this "strange" situation might have to be taken into account (tax laws for example).

Report this comment
#25) On August 31, 2009 at 10:55 PM, checklist34 (99.73) wrote:

sweet porte, thanks.  I'm lucid today and willing to do a little algebra.

for my record, as of 8/31/09 my prices for stocks I hold which pay dividends are:

XL:  4.29.  I think this was maybe $4.40 when i actually picked it so its been adjusted

FSC (picked basically because of the yield):  10.02

AINV (picked for yield and valuation):  5.47

ARCC (yield pick):  7.64

PNNT (yield):  6.81

PSEC (yield):  9.16

HTGC (yield):  8.42

 

we'll see if i'm adjusted over time...

Report this comment
#26) On August 31, 2009 at 10:58 PM, checklist34 (99.73) wrote:

my all time best scores in verizon sudoku (anybody able to best these?  i've googled for some kind of record board as i'm curious if i'd make it)

training:  1:22

grasshopper:  1:15

samurai:  1:13

ninja:  1:22

sensei:  1:59

master:  2:22

Report this comment
#27) On September 09, 2009 at 1:45 PM, checklist34 (99.73) wrote:

ok, my starting price for FSC dropped to $9.77, meaning that i was compensated for a dividend which apparently just got paid or something like that.

Report this comment

Featured Broker Partners


Advertisement