Karel's Marketocracy Fund

[Karel]

Karel,
Could you tell us a little about the buying and selling of U.S. stocks from your location ? Our stock market opens at 9:30 A.M. and closes at 4 P.M. at least by my clock. Do you purchase through a discount broker? Do you get real time quotes. Do you have to pay a premium , being outside the U.S.?
I'm sure it is more difficult for you to buy and sell. Do you have to pay a special tax on profits made outside of your country? I'm just curious. Keep up the good work.

------------billyjoe

There are two main differences: the time and the taxes. Where I live, it is generally 6 hours later than when you are, so "my" market hours are from 3:30 PM - 10:00 PM. (DST starts and ends on different dates, so sometimes the difference is 5 or 7 hours.) My routine is to do all my transactions at around 4:30 PM. My strategy does not call for constant attention, so limit orders will take care of the rest.

My official status is NRA: Non-Resident Alien, and I need to reaffirm my identity every x years, because of the Patriot Act, or something. The Netherlands has a tax treaty with the U.S.A., so I pay just a 15% withholding on dividends. No capital gains tax for me, just a 1.2% tax on capital, whoopee!

I use a discount broker, www.lowtrades.com, because they were the cheapest I could find who would accept "non-resident aliens", because my account was very, very small (and still is smallish). They are good enough, and have real time quotes. I pay their normal commisions and fees, except that wiring funds costs me more, and a wire out costs more too.

Regards,

Karel

[billyjoe]

Karel,
Could you tell us a little about the buying and selling of U.S. stocks from your location ? Our stock market opens at 9:30 A.M. and closes at 4 P.M. at least by my clock. Do you purchase through a discount broker? Do you get real time quotes. Do you have to pay a premium , being outside the U.S.?
I'm sure it is more difficult for you to buy and sell. Do you have to pay a special tax on profits made outside of your country? I'm just curious. Keep up the good work.

------------billyjoe

[Karel]

New Top 3: CPA, OMRI, CHAP

The market was rather OK this, but QHF lost. Stuff happens. For a change, the baseline fund had a good week, only losing to SPY. The numbers:

IWM: 28.94 (+0.5%)
SPY: 28.37 (+0.9%)
QHF: 27.12 (-0.4%)
QQQQ: 26.66 (+0.1%)
QHF-: 25.58 (+0.9%)

This week's hall of fame: GNK +6.4%, DECK (the oldest holding) +5.5%, and CHAP (my running POTW pick) +3.7%
Hall of shame: DRQ -12.2% (for confirming guidance for Q2), GRMN -5.4%, and WCG -5.1%

The new Top 3 Picks are CPA, OMRI and CHAP. Do we need a new stock for QHF? Yes, we do. Currently there is 1 stock due for replacement (as last week we were to chicken to pick a replacement), and that is PBR (not TS, as I mentioned last week; TS got sold the week before). QHF already carries CHAP, so I exchange CHAP for GMRK, and of the three, I like GMRK best.

The baseline fund gained an amazing 12.0% on the sale of WCG, GEO and RKT. This week we take our leave of TATTF, UCTT, and SPAR, and the top 3 not held are CPA (re-entering the fray), GMRK, and ... SPAR.

QHF Closed Trades:
Winners: 35, avg +76.5%
Losers: 15, avg -25.2%
Total: 50, avg +46.0%

Regards,

Karel

[Karel]

These replacements look great, Karel. Congrats on the excellent performance. The portfolio is really working well.

AZZ reduced guidance for the year in January. Is that a concern for you?

For my real fund, yes, probably, but the baseline fund is a "dumb" fund, and just grabs the top 3 not held.

Regards,

Karel

[peanuts]

The baseline fund gained 4.8% on the sale of CHAP, CPA, and XING. This week we take our leave of WCG, GEO and RKT and get our new Top 3 Picks, but since we need to dig down to avoid stocks already held, the replacement stocks become: QMAR, BAP and AZZ.

These replacements look great, Karel. Congrats on the excellent performance. The portfolio is really working well.

AZZ reduced guidance for the year in January. Is that a concern for you?

[Karel]

New Top 3: GNK, QMAR, OMRI

Another brilliant week for the fund, and as a consequeence I am not feeling lucky, but brilliant too. Or rather: H U G E:

IWM: 28.81 (+0.2%)
SPY: 28.11 (+0.6%)
QHF: 27.23 (+2.6%)
QQQQ: 26.63 (+2.6%)
QHF-: 25.36 (+0.4%)

This week's hall of fame: TSO +9.5%, RKT +8.6%, and VOLV +8.5%
Hall of shame: WCG -5.6%, AEO -3.1%, and GGB -1.6%

The new Top 3 Picks are GNK, QMAR, OMRI. Do we need a new stock for QHF? Yes, we do. Currently there is 1 stock due for replacement (we are getting on top of things!), and the one that has been waiting longest is TS. But I have a problem. Reviewing the top 3 and a bit deeper I saw nothing I really liked, so it is a pass this week.

TS went for 47.61, a very acceptable +29.8% gain in almost 13 months. AKH entered the fund at 51.21.

The baseline fund gained 4.8% on the sale of CHAP, CPA, and XING. This week we take our leave of WCG, GEO and RKT and get our new Top 3 Picks, but since we need to dig down to avoid stocks already held, the replacement stocks become: QMAR, BAP and AZZ.

QHF Closed Trades:
Winners: 35, avg +76.5%
Losers: 15, avg -25.2%
Total: 50, avg +46.0%

Regards,

Karel

[Karel]

Karel,
AZZ is also on my list so we agree on 5 of 10 , but I never used P/E.

1. At least 100% price appreciation this year.

2. Minimum 80 RS in last 3,6, and 12 months

3. Within 2% of high for last 10 years

4. At least 80% EPS gain in last 12 months.

-------------billyjoe

Well, perhaps the similarities come from the momentum-with-a-check idea, and the differences from the different check. Who knows.

Regards,

Karel

[billyjoe]

Karel,
AZZ is also on my list so we agree on 5 of 10 , but I never used P/E.

1. At least 100% price appreciation this year.

2. Minimum 80 RS in last 3,6, and 12 months

3. Within 2% of high for last 10 years

4. At least 80% EPS gain in last 12 months.

-------------billyjoe

[Karel]

Karel,
We must have some similarities in our screens. Just ran some (see Pete's thread) Final 32 stocks included AKH BW GEO SPAR UCTT, and WCG.
In fact, BW GEO SPAR UCTT and WCG were all in the final 9.

------------billyjoe

Hi Billyjoe,

interesting! I run an approximation of $$$Mr.Market$$$'s method, which means (roughly) momentum for starters, and P/E as a control. My top 10, with two extra's (in italics) in case I need to go deeper:

WCG
AKH
RKT
OMRI
EMS
ORH
MEH
UCTT
CHAP
BW
CLMT
AZZ

Regards,

Karel

[billyjoe]

Karel,
We must have some similarities in our screens. Just ran some (see Pete's thread) Final 32 stocks included AKH BW GEO SPAR UCTT, and WCG.
In fact, BW GEO SPAR UCTT and WCG were all in the final 9.

------------billyjoe

[Karel]

New Top 3: WCG, RKT, OMRI

The market is rolling, and the fund is rolling too. QHF, my marketocracy fund, performed quite well:

IWM: 28.75 (+1.3%)
SPY: 27.94 (+2.3%)
QHF: 26.53 (+2.0%)
QQQQ: 25.96 (+1.7%)
QHF-: 25.25 (+1.8%)

This week's hall of fame: GNK +13.5%, GGB +5.5%, and RKT +3.7%
Hall of shame: TSO -2.6%, PBR -1.7%, and TS -1.3%

The new Top 3 Picks are WCG, RKT and OMRI. Do we need a new stock for QHF? Yes, we do. Currently there are 2 stocks due for replacement (we are getting on top of things!), and the one that has been waiting longest is TS. Because 2 of the new top 3 are already owned, I chose between AKH, OMRI and EMS, and I picked AKH.

GI went for 29.29, a lackluster +7.7% gain in over 14 months. VOLV entered the fund at 87.78.

The baseline port sheds CHAP, CPA, and XING from februari 7th, and would get our new Top 3 Picks, but since we need to dig down to avoid stocks already held, the replacement stocks become: AKH, OMRI, and EMS

QHF Closed Trades:
Winners: 34, avg +77.9%
Losers: 15, avg -25.3%
Total: 49, avg +46.3%

Regards,

Karel

[Karel]

Well, the ride was a bit wilder than that:


Orange is my fund
Green is SP500
Blue is Nasdaq
Olive is DJIA
Purple is the Marketocracy M100 fund.

Regards,

Karel

[spikefader]

Karel, well done!

Folks, in case you haven't noticed, Karel's method produces great results. Here is his equity curve based on those numbers:

[Karel]

Top 3: VOLV, VSEA and CHAP

Finally some time to work again at the fund, QHF. The week was rather good, and QHF again jumps over QQQQ. Warning! The numbers for the ETF's are off, as I added in over a year of dividends. So no pretty colors this time:

IWM: 28.38 (+2.2%)
SPY: 27.31 (+2.4%)
QHF: 26.01 (+2.2%)
QQQQ: 25.53 (+0.6%)
QHF-: 24.81 (+2.2%)

QHF- is the new baseline port, ... well, I guess you will know that by now.

This week's hall of fame: DRQ +7.5%, GEO +6.8%, and TSO +5.6%
Hall of shame: GNK (my latest pick, ticker changed from GSTL) -3.8%, WCG -1.1%, and GRMN -0.9%

The new Top 3 Picks are VOLV, VSEA and (again) CHAP. Do we need a new stock for QHF? Yes, we do. Currently there are 3 stocks due for replacement and the one that has been waiting longest is GI. It will be replaced by VOLV.

IBCA was sold (some weeks ago) for 29.29, a disappointing -35% loss in almost 9 months. GNK, then GSTL, was bought for 33.32.

The baseline port loses 3 ancient stocks and gets our new Top 3 Picks, that is, because CHAP already is in the port, we grab ORH in its place.

QHF Closed Trades:
Winners: 33, avg +80.0%
Losers: 15, avg -25.3%
Total: 48, avg +47.1%

Regards,

Karel

[Karel]

I am still rather busy, so the portfolio has to wait another week for maintenance.

The week was a lot better, but my Marketocracy fund, QHF, dropped back behind QQQQ. That isn't really a downer, with a nice gain for the week. The numbers:

IWM: 27.77 (+1.2%)
SPY: 26.68 (+1.6%)
QQQQ: 25.39 (+2.3%)
QHF: 25.38 (+2.2%)
QHF-: 24.28 (+2.5%)

QHF- is the new baseline port, holding my weekly top 3 $$$Mr.Market$$$ picks for 6 weeks. We expect it to underperform relative to QHF (to show our stock picking and holding strategy works), and to outperform relative to the market.

To console myself for the loss of 3rd place, I checked with the numbers on 2/25, when I reactivated my portfolio:

Ticker: Current - 2/25 = Gain/Loss
IWM: 27.77 - 28.29 = -0.52 (-1.9%)
SPY: 26.68 - 26.88 = -0.20 (-0.7%)
QQQQ: 25.39 - 25.79 = -0.40 (-1.6%)
QHF: 25.38 - 24.85 = +0.53 (+2.1%)
(QSHF: 24.28 - 24.85 = -0.57 (-2.3%))

The consolation is a bit mixed, as my baseline port is a loser, but my QHF fund certainly is on a roll! It isn't saying a lot, but it is encouraging!

Regards,

Karel