Rules for Pick of The Year (PoTY) 2018

[mimo_100]

Did I miss the June 2018 results?

[JohnHenry]

As of 06-01-18

[JohnHenry]

As of 06-29-18



Hi Billyjoe,

I'm sad to see two of four Sears stores and three Toys R Us stores closing in my town.

[JohnHenry]

As of 07-31-18

[JohnHenry]

As of 08-31-18

[billyjoe]

My love/hate relationship with SHLD finally paying off big time. Disclosure, I once owned SHLD at well over $100. According to finviz only .6% of outstanding stock is owned by insiders, can that be correct?

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

[JohnHenry]

As of 09-28-18

[Louetta]

I actually DO have a shot at finishing last again.

[tiedyed1]

The Shorts appear smarter than the Longs this year and I tip my hat to them. However, and as previously mentioned, the maximum short gain is 100%, and there is still time for those longs swinging for the fences with >100% gains.
Always a fun contest and thank you JohnHenry for your work!

[jiesen]

I actually DO have a shot at finishing last again.

maybe, but you've still got quite a ways to go to catch Doug!
Somehow I believe my pick going down to -74% is a better bet than yours going down to -84%!
POTY's getting exciting this time around, methinks...

[Louetta]

The Shorts appear smarter than the Longs this year and I tip my hat to them. However, and as previously mentioned, the maximum short gain is 100%, and there is still time for those longs swinging for the fences with >100% gains.
Always a fun contest and thank you JohnHenry for your work!

"Always a fun contest and thank you JohnHenry for your work!"

I second the motion.

[tiedyed1]

Frankly I think this 100% stuff is nonsense. In real life if I short 100 shares at $10 Schwab (my broker) will credit my account with 100x$10-$4.95 commission or $995.05. Let us say the shares now go to $0 (bankruptcy, delisting, etc.). Schwab will make me execute a transaction to close the position before they free up the money and charge me $4.95, just like any trade. So my profit on the trade is $995.05 - $4.95 or $990.10 at a cost (in real dollars) of $9.90 for the two trades, essentially 10,000%. In the contest we ignore commissions on all the longs so if we do so for the shorts the original credit is $1000 and the cost of the closing transaction is $0 or an infinite gain, in my book.

I see that perspective and maybe it is semantics, but I look at the 100% as yield from the initial position: (Not taking into account trade fees) a short's maximum potential is to yield 100% of their initial position; while a long has the potential to yield over 100% of their initial position.

(i.e. I am shooting for my pick, TRVN, to more than double (up >100%) by 12/31/2018.)

[BlueWolf]

So my profit on the trade is $995.05 - $4.95 or $990.10 at a cost (in real dollars) of $9.90 for the two trades, essentially 10,000%.

Don’t forget the interest the broker charges because all shorts are done on margin. With fees and interest, there is no such thing as infinite gain, but you can certainly achieve more than 100% return, in terms of your actual investment, i.e. fees + interest. Keep in mind, however, that you could use the same formula for determining your gains on a long position, i.e. amount of profit minus fees and interest. Hence buying a hundred shares of a $10 stock and selling it at $20 yields a $1000 profit minus trading costs, which would far exceed 100% of the execution costs even though the stock only doubled. The 100% number comes from the amount you can earn versus the value of the position, i.e. the amount of capital tied up by the position. For a $1000 short, the maximum you can earn is $1000, or 100% of the capital cost of the position, and for a $1000 long, the maximum you can earn is theoretically infinite. Since there must always be an amount of capital associated with every trade, short or long, the ROI is always calculated against the capital risked, not the costs of execution.

[tiedyed1]

I see that perspective and maybe it is semantics, but I look at the 100% as yield from the initial position: (Not taking into account trade fees) a short's maximum potential is to yield 100% of their initial position; while a long has the potential to yield over 100% of their initial position.

(i.e. I am shooting for my pick, TRVN, to more than double (up >100%) by 12/31/2018.)

Well, I swung for the fences and looks like I missed on this one (TRVN): https://endpts.com/trevena-crushed-a...-new-pain-med/

I may be competing for last place this year.

[riverbabe]

So now what happens with billyjoe's SHLD short?