My batting average

[billyjoe]

Deaddog,
Do you work for the IRS or what? Maybe Mr. Market doesn't care as long as his account grows. I think he knows how to figure the % allocated to each stock. He's too busy enjoying his meats and cheeses.

-------------billy

[Deaddog]

My only reasonable answer is, "I don't know". I never go back and check. I do know that the total market value of my account goes up and up.

What is it that you don’t know?
Do you have a cash reserve? Check your account balance. Divide the cash by the total account value and you will have the percentage of cash on hand.

Where does the cash come from when an opportunity presents itself? It has to come from somewhere unless you rely on the Cash Fairy the way I rely on the Laundry Fairy.

What percentage of your portfolio is allocated to each stock? Again take the value of each stock and divide it by the total account value to give the percentage of each position.

As far as overall portfolio returns. Take the account value at the beginning of the year. Divide it into the account value at the end of the year, subtract 1 from the answer and you have your percentage return for the year.

You would think an MBA from Wharton would be able to figure that out.

And really none of the above really matters; I don’t care what the numbers are. I’m looking for a method to model my portfolio management after.

Looking at the MR Market trades since I joined the this forum,
Assuming a cash reserve so that 14 stocks could be purchased in equal amounts;
There are currently 9 positions open. Cash reserve would be 36%
Overall return since Dec 1 2010 is 3.82%
If you invested in 65% of your account in SPY your return would have been 6.38%

So here the dog begging for a bone. With your future picks, how about letting us know what percentage of your account you are committing to that position.

[billyjoe]

Someone did research a couple years ago showing that a 30% success rate in stock picking like a 300 batting average can be very rewarding. Mr. Market would laugh at 30%.

---------billy

[smaskell]

ay' there's the rub...

A more valuable piece of information would be the overall return of your portfolio.

I'm with ya Dog. In the end that's the only information that matters and the only information that can be used when comparing various systems or methods over time. How else can you compare?
I guess though, my mindset here is to learn and contribute what I can and not worry about what's missing. What MrM did give me is another tool to evaluate stocks (thanks MrM). What I don't find is a lot of discussion about position sizing. That's OK. I will have to work that out on my own and from other sources.
Scott

[mrmarket]

I’m not asking how much money you have in each stock. That is none of my business. What I’d like to know is what percentage of your account you allocate to each stock.

I posed the same question when I joined the Forum and was told to watch and see. Well I’ve been watching but I’m no wiser.

“I buy how much I feel like, if I really like a stock I buy a lot” and “I have up to 14 positions.. I add more when I feel like it.” Are the standard answers when asked about how you manage your portfolio.

Stock picking, although very important, is only one part of being a successful investor. I am trying to determine the best way to manage an account and I have disclosed how I plan to manage mine.

The number of winning trades in a row and the annualized return of each trade is interesting information. A more valuable piece of information would be the overall return of your portfolio.

Cash available to purchase stocks has almost no return.
Does a potential 14 stock portfolio that holds only 9 stocks have cash in reserve to purchase the last 5 stocks?
If not where do the funds come from when an opportunity presents itself?
If cash is held in reserve, how does that affect the overall return on the portfolio?

These shouldn’t be unreasonable questions to ask.

My only reasonable answer is, "I don't know". I never go back and check. I do know that the total market value of my account goes up and up.

[Deaddog]

The easy answer is to watch and see. Tell a friend. Why do you want me to tell you how much I invest in each stock? I don't ask you how much you invest.

I’m not asking how much money you have in each stock. That is none of my business. What I’d like to know is what percentage of your account you allocate to each stock.

I posed the same question when I joined the Forum and was told to watch and see. Well I’ve been watching but I’m no wiser.

“I buy how much I feel like, if I really like a stock I buy a lot” and “I have up to 14 positions.. I add more when I feel like it.” Are the standard answers when asked about how you manage your portfolio.

Stock picking, although very important, is only one part of being a successful investor. I am trying to determine the best way to manage an account and I have disclosed how I plan to manage mine.

The number of winning trades in a row and the annualized return of each trade is interesting information. A more valuable piece of information would be the overall return of your portfolio.

Cash available to purchase stocks has almost no return.
Does a potential 14 stock portfolio that holds only 9 stocks have cash in reserve to purchase the last 5 stocks?
If not where do the funds come from when an opportunity presents itself?
If cash is held in reserve, how does that affect the overall return on the portfolio?

These shouldn’t be unreasonable questions to ask.

[mrmarket]

When you sell at a loss do you only sell one stock or do you get rid of a bunch at a time?

I'm trying to determine how the system works in a bear market. If you have to hold for a year or more might there be a better return if you cull the portfolio every so often.

Shouldn't the focus being on getting the best possible return rather than having a record winning streak?

For what it's worth I'm keeping track of your results since I joined the forum. I know the results won't be accurate as you are very secretive about how much of your portfolio you commit to each position, But I will have the results if one were to commit 1/14th of their account to each position.

The easy answer is to watch and see. Tell a friend. Why do you want me to tell you how much I invest in each stock? I don't ask you how much you invest.

[mrmarket]

Mr. Market,
I know you've sold many stocks after they initially tanked then made a recovery. I think stocks have spoilage date like milk even though you've figured out how to make fine cheese , cream cheese, and yogurt from curds.

----------------billy

I have held stocks for almost 2 years that not only added to my streak, but outperformed the market in doing so.

[Deaddog]

If I sell a stock for a loss, that means my streak is over. I start my streak again. I have done that a few times. I didn't know that was confusing to people.

When you sell at a loss do you only sell one stock or do you get rid of a bunch at a time?

I'm trying to determine how the system works in a bear market. If you have to hold for a year or more might there be a better return if you cull the portfolio every so often.

Shouldn't the focus being on getting the best possible return rather than having a record winning streak?

For what it's worth I'm keeping track of your results since I joined the forum. I know the results won't be accurate as you are very secretive about how much of your portfolio you commit to each position, But I will have the results if one were to commit 1/14th of their account to each position.

[billyjoe]

If I sell a stock for a loss, that means my streak is over. I start my streak again. I have done that a few times. I didn't know that was confusing to people.

Mr. Market,
I know you've sold many stocks after they initially tanked then made a recovery. I think stocks have spoilage date like milk even though you've figured out how to make fine cheese , cream cheese, and yogurt from curds.

----------------billy

[mrmarket]

I took a quick look and decided that my time would be better spent looking for new picks than trying to find how you dealt with your losers. It can continue to be your secret.

I have to assume that from time to time you clean house and start your count over again. I see where you went from 80 some winners then started again. I found several picks that didn’t hit the target and have either been sold or taken off the list.

I still like the system, but will stick to my strategy of cutting losers although I may not be so quick to do so in the future.

Possibly some of the members who were here during the downturn will enlighten me.

If I sell a stock for a loss, that means my streak is over. I start my streak again. I have done that a few times. I didn't know that was confusing to people.

[Deaddog]

Good questions...all of my trades since 2003 are on this forum

I took a quick look and decided that my time would be better spent looking for new picks than trying to find how you dealt with your losers. It can continue to be your secret.

I have to assume that from time to time you clean house and start your count over again. I see where you went from 80 some winners then started again. I found several picks that didn’t hit the target and have either been sold or taken off the list.

I still like the system, but will stick to my strategy of cutting losers although I may not be so quick to do so in the future.

Possibly some of the members who were here during the downturn will enlighten me.

[mrmarket]

What is the "x factor"?

How many stocks were held during that period?

How long was his capital tied up while he waited for the market to recover?

Is this why the record starts Aug 2009?

Good questions...all of my trades since 2003 are on this forum

[Deaddog]

What is the "x factor"?

How many stocks were held during that period?

How long was his capital tied up while he waited for the market to recover?

Is this why the record starts Aug 2009?

[hags]

The thread ended in 2004. Have you run the numbers recently? How did things go during the meltdown in 2008?

If I recall correctly.....Mr M. used the "x-factor" in his investing criteria and stayed away from the market during most of 2008....

hags