Karel's Marketocracy Fund

[Karel]

New Top 3: MTL, HIL, APWR

Things are still going very well. What can I say? And the small caps (IWM=Russell 2000) are still going strong; almost at break even for the year:

QHF: 37.35 (+2.4%; +10.5%) ***New ATH***
QHF-: 31.54 (+2.9%; +4.3%)
IWM: 26.08 (+3.4%; -1.7%)
QQQQ: 28.59 (+3.7%; -2.4%)
SPY: 26.38 (+2.0%; -4.0%)

This weeks halls of fame and shame:
Hall of Fame: MTL +17.1%, CLF +13.8%, LNN +7.2%
Hall of Shame: DNR -5.6%, APA -3.8%, RIO -3.0%

The new Top 3 are MTL, HIL and APWR. Do we need a new pick for our fund? No, we don't. Everything is just fine. Even LNN is recovering a bit.

Last week the baseline fund, QHF-, sold DNR, ATW and RIG for an average gain of 6.3%, for a total average of +4.8% over the 119 reported sells. No stocks gained 15% or more (DNR came close with 14.2%), so we stay with 32 stocks which reached 15% or more. This week CF, DAR and MA will be replaced by HIL, APWR and WDC.

QHF Closed Trades (no change)
Winners: 48, avg +71.1%
Losers: 27, avg -23.1%
Total: 75, avg +37.2%

[Karel]

New Top 3: POT, PBR and DNR

Lots of things to do, so in a bit of a hurry:

QHF: 37.29 (-0.2%; +10.3%)
QHF-: 31.71 (+0.6%; +4.9%)
IWM: 25.82 (-1.0%; -2.6%)
QQQQ: 28.03 (-2.0%; -4.3%)
SPY: 25.62 (-2.9%; -6.8%)

This weeks halls of fame and shame:
Hall of Fame: LNN +11.2%, POT +8.9%, BUCY +6.5%
Hall of Shame: MTL -7.6%, RIO -5.9%, RIG -4.5%

The new Top 3 are POT, PBR and DNR. Do we need a new pick for our fund? No, we don't. Everything is just fine. Boring? I like boring.

Last week the baseline fund, QHF-, sold CF, DAR and MA for an average gain of 17.7%, for a total average of +5.1% over the 122 reported sells. DAR and MA gained 15% or more, now we have 34 stocks which reached 15% or more. This week PBR, APA and FST will be replaced by PBR(!), APA(!) and DAR(!). DAR returns after 1 week of absence, in which it went from 16.11 to 16.65. Nobody is perfect.

QHF Closed Trades (no change)
Winners: 48, avg +71.1%
Losers: 27, avg -23.1%
Total: 75, avg +37.2%

[Karel]

New Top 3: POT, CF, HIL

Again lots of things to do, so again in a bit of a hurry:

QHF: 36.26 (-2.5%; +7.5%)
QHF-: 31.55 (-0.5%; +4.3%)
IWM: 25.61 (-0.8%; -3.4%)
QQQQ: 27.65 (-1.4%; -5.6%)
SPY: 25.59 (-0.1%; -6.9%)

This weeks halls of fame and shame:
Hall of Fame: LNN +7.8%, POT +4.3%, LNN +3.4%
Hall of Shame: EXM -23.2%, RIO -7.7%, AAPL -7.1%

The new Top 3 are POT, CF and HIL. Do we need a new pick for our fund? No, we don't. Of course EXM dropped an awful lot, but it is a rather green pick in the portfolio and still up over 30%.

Last week the baseline fund, QHF-, sold PBR, APA and FST for an average gain of 7.9%, for a total average of +5.2% over the 125 reported sells. FST gained 15% or more, now we have 35 stocks that reached 15% or more. This week OFG, CLF and RIMM will be replaced by CF, AGU and CMP.

QHF Closed Trades (no change)
Winners: 48, avg +71.1%
Losers: 27, avg -23.1%
Total: 75, avg +37.2%

Regards,

Karel

[MotherLoad]

Karel maybe the qqqq's can break 50 this next time.

[Karel]

Karel maybe the qqqq's can break 50 this next time.

Good for them! I think it would not be very good for my funds (and real money portfolio) short term, as they do not seem to be very well correlated to the markets at this time. Not a bad thing actually, right now. But when the markets turn bullish, my portfolios will eventually adjust and bull markets are really fun with $$$Mr. Market$$$'s strategy.

Regards,

Karel

[Karel]

New Top 3: POT, PBR and APA

It is just this report that is a bit late; the "orders" were in before the market opened. The small caps seem to be in favor for some weeks now. And my funds, of course:

QHF: 36.01 (-1.0%; +6.5%)
QHF-: 32.21 (+2.0%; +6.5%)
IWM: 25.35 (-1.0%; -4.4%)
QQQQ: 27.11 (-2.0%; -5.6%)
SPY: 24.74 (-3.3%; -10.0%)

This weeks halls of fame and shame:
Hall of Fame: DNR +12.2%, EXM +6.6%, MTL +2.5%
Hall of Shame: LNN -23.2%, SID -5.2%, PBR -3.9%
EXM and LNN "switched halls" compared to last week

The new Top 3 are POT, PBR and APA. Do we need a new pick for our fund? No, we don't. EXM recovered, but now LNN is in the dumps. It is still early days however, and the drop was on a respectable gain, but LNN missed analyst expectations and its margin seems to be under pressure. I'll stop here before I put my foot in my mouth. We'll keep it a bit longer.

Last week the baseline fund, QHF-, sold OFG, CLF and RIMM for an average gain of 9.4%, for a total average of +5.3% over the 128 reported sells. CLF gained 24%, so now we have 36 stocks that reached 15% or more. This week POT, FLS and ARD will be replaced by POT(!), STLD and ATVI.

QHF Closed Trades (no change)
Winners: 48, avg +71.1%
Losers: 27, avg -23.1%
Total: 75, avg +37.2%

Regards,

Karel

[Karel]

New Top 3: HIL, DAR, DNR

I am going to proclaim a bear market. My indicator is the number of active threads last week: exactly ten. How long the spell will last? I don't know. Anyway, $$$Mr. Market$$$'s way of stock picking still proves itself, as is shown by the numbers. My fund eked out a positive gain, despite LNN crashing even further down the ravine, and my baseline fund is still positive for the year:

QHF: 36.17 (+0.4%; +7.0%)
QHF-: 31.17 (-3.2%; +3.1%)
IWM: 24.34 (-4.0%; -8.2%)
QQQQ: 26.10 (-3.7%; -10.9%)
SPY: 23.97 (-3.1%; -12.8%)

This weeks halls of fame and shame:
Hall of Fame: ATW +13.9%, CLF +10.9%, PBR +6.1%
Hall of Shame: LNN - 11.4%, DNR -6.2%, GGB -4.5%
DNR and PBR "switched halls" compared to last week; LNN continues a rather disastrous slide.

The new Top 3 are HIL, DAR and DNR. Do we need a new pick for our fund? No, we don't. My decision to keep LNN a bit longer isn't proving a very lucky one, but we'll wait it out a bit more.

Last week the baseline fund, QHF-, sold POT, FLS and ARD for an average gain of 14.8%, for a total average of +5.5% over the 131 reported sells. POT gained 22.3%, so now we have 37 stocks that reached 15% or more. This week MTL, LNN and JST will be replaced by FLS, CSIQ and TTES.

QHF Closed Trades (no change)
Winners: 48, avg +71.1%
Losers: 27, avg -23.1%
Total: 75, avg +37.2%

Regards,

Karel

[Karel]

On the chin

Yesterday I saw a loss of -7.2% for my QHF fund, a loss of -5.1% for my baseline fund, QHF-, and a -6.2% loss in real money. I can't remember a day as bad as this one!

Regards,

Karel

[Karel]

Due to technical problems this time I just have a report (and that late), no new picks. Normal service will be resumed next week.

Well, last week the lightning struck. Gone are the positive scores for the year:

QHF: 36.17 (-8.0%; -1.6%)
QHF-: 28.81 (-7.6%; -4.7%)
IWM: 23.16 (-4.8%; -12.7%)
QQQQ: 25.52 (-2.2%; -12.8%)
SPY: 23.97 (-1.0%; -13.6%)

This weeks halls of shame and more shame:
Hall of Fame: AAPL +0.0%, APA -2.9%, ATW -4.1%
Hall of Shame: CLF -15.9%, EXM -15.8%, BUCY -13.8%

OK, see you next week,

Karel

[mrmarket]

Karel..have no fear...the $$$MR. MARKET$$$ momentum model works, but there is no need to go fishing if they're not biting..yet.

[Karel]

Karel..have no fear...the $$$MR. MARKET$$$ momentum model works, but there is no need to go fishing if they're not biting..yet.

Indeed, I have no fear. What you say about fishing is interesting though. In my implementation of your method, I replace "stalling" stocks to get better performance. But in a general market downturn, it might be better to sit things out. But then again, if the downturn is prolonged, perhaps some action should be taken. But the most important thing might be that your method, while resilient enough in bear markets, still shines in bull markets, so that sitting still might be the best option.

If that is true, what are the criteria for sitting still and starting to move again? Anyone an idea?

Regards,

Karel

[Karel]

Crisis? What crisis?

Well, if nobody answers my question, I'll answer it myself. But first I have to make an analysis of my stocks from, say, 11/2007 though now. The end of October 2007 looks like the most recent market high, not counting bumps. (Well, the really small caps of the Russell 2000 had it a bit earlier.) Any chartists with an opinion on this?

Anyway. From 10/29 through now, I sold 12 stocks that had been in my portfolio from before that time. If I had kept those stocks, they would have contributed a -3.8% loss on average. Also, From 10/29 through now I bought 16 stocks (and sold 4 of them) for an average result of +8.2%. Well, now! $$$Mr. Market$$$'s method of stock picking really shines in a bad market too!

Of course this doesn't mean that I am actually up over this period. I am some 4% down since the end of October. But my last all time high was from the end of May, only 6 weeks ago! The markets are down something around 20%:




What does this all mean? It is hard to draw a conclusion, because the evidence is very anecdotal: it is such a short period, it concerns so few stocks. But as my new stocks outperform my old stocks, I see no reason to stop picking stocks.

Crisis? What crisis? With $$$Mr. Market$$$'s stock picking method there is no crisis. Just potholes in the road.

Regards,

Karel

[Karel]

New Top 3: POT, DAR, CMP

This week my funds showed some recovery, and guess what, my fund is positive again. IWM, the Russel 2000 small caps, also did well:

QHF: 33.84 (+1.7%; +0.1%) ***Positive for the year!***
QHF-: 29.68 (+3.0%; -1.9%)
IWM: 23.49 (+1.4%; -11.4%)
QQQQ: 25.48 (-0.2%; -13.0%)
SPY: 23.30 (-1.9%; -15.2%)

This weeks halls of fame and shame:
Hall of Fame: CLF +16.9%, EXM +5.5%, MTL +5.1%
Hall of Shame: APA -6.5%, PBR -6.1%, ATW -5.5%

The new Top 3 are POT, DAR and CMP. Do we need a new pick for our fund? No, we don't. My decision to keep LNN a bit longer isn't proving a very lucky one, but we'll wait it out a bit more. But next week three stocks come due, and among them LNN.

Two weeks ago the baseline fund, QHF-, sold MTL, LNN and JST for an average loss of -11.5%, for a total average of +5.1% over the 134 reported sells. No stocks were positive, so we have still 37 stocks that reached 15% or more. This week DNR, RIG and KWK will be replaced by GTE, PQ and ENS.

QHF Closed Trades (no change)
Winners: 48, avg +71.1%
Losers: 27, avg -23.1%
Total: 75, avg +37.2%

Regards,

Karel

[billb]

Sell rules

Karel,
Thanks for all that you do here. I really like what I'm seeing and would like to try and mimic you a bit.

It wasn't real clear to me exactly what your sell rules are. From the profit side, are you looking at 15% to take a profit or something arbitrary? From the loss side, are you just reviewing it each week and after a stock crosses a certain loss threshold, you're dumping and replacing? What is this threshold or is it arbitrary as well?

FWIW, I wanted to give a little back. I updated your original spreadsheet to automatically download 1 year's worth of pricing information from Yahoo and automatically calculate the R^2. Note: I saved it in Excel 2007 format, but if you or anyone else is interested, let me know.

[Karel]

Karel,
Thanks for all that you do here. I really like what I'm seeing and would like to try and mimic you a bit.

It wasn't real clear to me exactly what your sell rules are. From the profit side, are you looking at 15% to take a profit or something arbitrary? From the loss side, are you just reviewing it each week and after a stock crosses a certain loss threshold, you're dumping and replacing? What is this threshold or is it arbitrary as well?

My official sell rule is "stalling". I recorded the weekly close of a stock and if that close is at least 5% higher than the buy price or the last high weekly close, that price becomes the (new) last high weekly close. If there is no new LHWC in the course of three months, the stock is sold.

I also have a mental stop loss rule: when a stock drops more than 20% (from the buy price or LHWC), it is a candidate for selling anyway. But just a candidate; I might hold because of a good earnings report, or because the dip (or the stalling!) looks to be only temporary. I then mark the stock as being in a grace period; it can get absolution only once.

The logic behind the sell rules is that I don't have much idea of Due Diligence. I couldn't write a report like $$$Mr. Market$$$'s to save my life. I therefore decided to watch the momentum of the stock more strictly than he does. That is also why I decided not to sell at 15%, because these sell rules would almost certainly hurt my results when I sell at 15%, so I need some compensation on the upside.

I wanted to give a little back. I updated your original spreadsheet to automatically download 1 year's worth of pricing information from Yahoo and automatically calculate the R^2. Note: I saved it in Excel 2007 format, but if you or anyone else is interested, let me know.

I would like that! I am pretty fast with the manual procedure, but faster is better. I have Office 2003.

Regards,

Karel