Mr. Market's Superstar Stocks

[billyjoe]

Mr.Market has the rare qualities of being both huge and humble ! Humble? Yes , believe it or not I present to you proof of his huge humbleness. Mr.Market likes to get fresh picks after a 15% or so gain as he gets his meat and cheeses from the prime of each stock, yet few realize the crumbs of his offcasts help nourish those not so huge. I've checked on his latest string of winners to calculate the size of those crumbs. So far I've not found one that didn't increase substantially after the Huge One's sale, but I won't even mention paltry gains of a mere 10%. Going in order from the first of his current string of winners.

1. ROST sold 4/5/12 at 59.97, a nice 17% windfall, however, if you held until 7/18/12 it reached 70.04 for another 16.79%, squeeze out more, hold until 11/18/12 for 81.99, another 17.06%.

2. BIIB sold 6/14/12 for 16%, keep it 11 more months 5/28/13, 242.62 another 75.3%, not enough? keep holding until today, 12/2/13 for another 27.16% at 298.82

3. PRGO sold 6/14/12 at 111.66, 19% gain, hold until 7/26/13, 134.31 another 20.28%, be a pig but don't get slaughtered. Hold until today 12/2/13, at 157.47 another 17.24%

4. UNH sold 6/19/12 at 60.28 for 16%, be a man/woman hold on until 9/16/13 and you pocket another 25.88% at 75.88

7. LAD sold 1/2/13 at 38.79 or 15%. It's not hard to hold another 6 months for 41.79% at over $55. What the heck, keep it until 10/22/13 for another 36.25% at 74.94.

8. AIRM sold 2/11/13 15% at 44.52, don't worry, keep it 24 more days for 13.68% more at 50.61, what the heck, hold onto it until today, 12/2/13 for 13.36% more at 57.37.

This counting is getting tiresome so I'll continue later, you sees? This is not a recommendation to buy or hold Mr. Market stock selections, just the facts had you bought.

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

[Louetta]

The obvious problem with such an analysis is that using his method he frees up his money when he sells and can put it into another of his choices which might then give him another 15% gain. Whether he would thus make more money rolling over like this rather than holding would require careful analysis. Also, the examples you use have occurred during an extended bull market. Lots of stuff kept going up and up, not just his stuff. In a flat or down market one might do better grabbing the 15% as he does and getting out. Also, I have it in mind he makes few picks when the market sours. Your perturbation of his method has him holding on which might not be good.

The criticism I've always had is why, when they are available, he doesn't use options which would multiply his profits. His losses would also multiply but if his system has a positive bias he would end up ahead.

[mimo_100]

billy and Louetta,

I did a similar analysis and provided a summary here

http://www.mrmarketishuge.com/showthread.php?3466-BOFI-Sold-gt-27-winners-in-a-row&p=118501#post118501

I annualized the returns to account for turning the money over as Louetta suggested. In the majority of cases I found that it was better to sell at 15-16 percent than hold. Of course there is a 2013 market component to this story - whatif the market was flat?

[Websman]

Who dares to question Mr Market? Not I says the Vulcan.

[billyjoe]

Louetta and mimo, I really doubt that Mr.Market needs to free up money to buy his next pick unless he continuously pyramids his funds using greater amounts as his gains increase, but I can't see him really wanting for new funds to invest. As far as bull vs. bear markets, do we really know until far into the future what is happening? I see there have been many confirmed down signals in the last 20 months since the current streak started. Any one of them could have signaled an extended bear coming upon us , but it hasn't happened yet. Sure, Mr.Market often slows his picking frequency but in the last 10 years he's never quit for an extended period. I'm just saying these are all great picks we can sell whenever we want. Mr.Market does at 15% but it's not so risky to hold on longer. So far I found 17 of his first 21 picks over 20 months have gone up at least 10% and in most cases much more after he's sold.

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

[billyjoe]

Did anyone notice, Mr.Market throws away the old weights after he sets a new record. You've got to be very huge to do that. Watch his video closely. I'd hate to be his trash hauler. Except for the huge tip at Christmas.

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

[Louetta]

Did anyone notice, Mr.Market throws away the old weights after he sets a new record. You've got to be very huge to do that. Watch his video closely. I'd hate to be his trash hauler. Except for the huge tip at Christmas.

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

..... .....

[billyjoe]

Back to Mr.Markets superstar stocks:

#10 TJX sold for 15% gain 4/2 at 47.33, hold till 5/15 at 51.84 you gain another 9.53%, on 9/19 you get another 10.26% at 57.16 finally sell 11/21 at 64.09 for 12.12% more

#11 DORM sold 16% at 41.10 5/7, by 6/18 it's at 47.21 for 14.87% more and at 52.43 on 8/14 you get another 11.06%

#13 PRAA sold 17% on 5/9 145.73, 6/18 163.43 you get 12.15%, 3/1 split by 9/27 you gain another 11.68%

#14 LION sold 5/15 for 16% gain at 12.26, by 7/25 16.16 for another 31.81%, finally sell 11/29 at 17.91 and pocket 10.83%

.............................and the list goes on

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

[Louetta]

No doubt you have some fine results there. So we're saying:

TJX was at 47.33 on 4/2, and 7 1/2 months later on 11/21 was at 64.09, 35% higher. If you sell on 4/2 and invest in other Mr. Market stocks, selling after 15%% gain each time, can you also make 35% in 7 1/2 months. Maybe.

DORM was at 41.10 on 5/7 and 3 months later on 8/14 at 52.43 28% higher. Again, can you sell on 5/7. follow Ernie's method and do better than 28% in 3 months? Don't know.

PRAA was at 145.73 on 5/9 and up about 24% 4 1/2 months later (the split makes things harder). Can you do this with Ernie's method? Maybe.

Finally LION was at 12.26 on 5/15 and 17.91 6 1/2 months later for 46% gain. Again, can you do this with Ernie's method? Don't know. Could be hairy.

I think you'd need to do some testing over a period of time. Maybe his high momentum picks do continue to soar. Maybe he's catching them at just the right time. (That's what I think.) Maybe the current bull market is the key to them continuing to go up. What happens in various types of markets (bull, bear, etc)?

It's an interesting question. You have done great work studying it.

[billyjoe]

Final summary. Had you held Mr.Market picks after initial sale. After stock symbol is % Mr.Market gained followed by additional gains had you held longer. 16 of the first 21 picks in current string made further substantial gains and many are continuing these gains. Picks 22-27 not enough data yet.

1. ROST 17%------16.79%-----17.06%

2. BIIB 16%-------75.3%------27.16%

3. PRGO 19%------20.28%-----17.24%

4. UNH 16%-------25.88%

7. LAD 15%-------41.79%-----36.25%

8. AIRM 15%------13.68%-----13.36%

10. TJX 15%-------9.53%-----10.26%----12.12%

11. DORM 16%----14.87%-----11.06%

13. PRAA 17%-----12.15%-----11.68%

14. LION 16%------31.81%----10.83%

15. FLT 16%-------14.61%----22.89%

17. QCOR 18%-----23.20%

18. CSTE 16%-----23.65%----13.71%

19. MGA 15%------10.54%

20. WGO 16%------14.93%

21. NUS 16%-------25.79%

In effect, 28 more winners from the same 16 stocks. From now on I'll think twice before selling at 15%.

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

[billyjoe]

After much thought I've decided it would be nice to make $1,000,000 trading stocks in the next 3 years. How would you do that? Study Mr.Market's methods closely. I've been doing that for over 10 years. Buy 3 Mr.Market type stocks at a time. Heck, you could probably choose 3 from the top 5 of each dump or do your own research. You'll find a lot of the same stocks. Preferably only buy when the market is in an uptrend. Currently Mr.Market has an 85% success rate if you add up 30 in a row plus all open positions. I'm figuring 67% winners or a 2/1 win ratio. So for each group of 3 picks, 2 should be winners. The Huge One would laugh at such a poor performance , but I'll take it. Start with $9000 or 3 stocks/$3000 in each. After the first cycle in which you sell at 15% gain or 10% loss (more on that later) you'll end up with $9600. Next cycle, $10,241 and so on. Keep reinvesting. You eventually will have several groups of trades going simultaneously. At the above rates of gain after 219* trades or 73 groups of 3 stocks you end up with $1,003,066.

I've made millions on paper many times over the years and this time I think it will work. But, as for the 15% gains and 10% stops, Mr.Market is correct again. If you pick a stock with great fundamentals and nothing changes, don't sell at a 10% loss. This was confirmed with many of the stocks in the recent $10-$15 contest. In fact the winner went down around 20% then rose over 60% hitting the $15 mark first. In just the last week, a stock of mine, BITA was down over 10%, I checked, there was no good reason for the dip so I held. Now up 8% and looking good for 15%. As for the 15% gain, a great majority of Mr.Market's picks gain well over 20% so I'm not going to sell instantly at 15%. Another stock I bought in December, OZM, is already at +14%, it also pays a 6.3% dividend. No way I'm selling at 15%. So far I'm 8 stocks into my experiment 6 are up, 2 down, that's 75%. Maybe I'll have my million before 219 trades, stay tuned. Last year I made 157 buys and 123 sells so 219* buys and sells in 3 years is very possible.

* you will have to also sell the 219 and keep reinvesting profits to hit a million
------------------billy

[billyjoe]

An easier method to make $1,000,000. Start with $3000. Pick 42 consecutive 15% winners reinvesting all principal plus gains into each new stock. At 42 in a row you'll have $1,062,749.

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