Karel's Marketocracy Fund

[Karel]

New Top 3: ATW, BYI, CMED

OK, we had a little pause this week. Things still look moderately awful, but it is early in the year. QQQQ was not the place to be, this week, and my baseline fund did well and gained a place as a result:

SPY: 25.01 (+0.7%; -9.0%)
IWM: 23.91 (+1.8%; -9.8%)
QHF-: 26.55 (+2.0%; -12.2%)
QQQQ: 25.15 (-3.0%; -14.1%)
QHF: 28.04 (+0.2%; -17.1%)

Hall of fame: NOK +7.6%, SID +6.9%, NOV +6.8%
Hall of shame: AAPL -12.2% (in its first week), RIO -3.9%, VIP -2.3%

The new Top 3 are ATW, BYI, CMED. Do we need a new stock for our fund? Yes, we do. There are 3 stocks marked "stalling" (GGB, GNK and RIO), and in this stock climate I will ignore the droppers. I'll replace them one by one and GNK is the next to go. It will be replaced by ATW, which also is my POTY pick.

GRMN got sold for 55.22, a 10.6% gain in 1.5 year or so. If GRMN had not gapped down atrociously at the open last week, that might have been something in the neighbourhood of 30%, quite acceptable. But that was not to be. AAPL was bought at 148.11 and lost 12% in its first week.

The baseline fund got rid of NOK, FCX and TNP for a -21.9% average loss. Ouch. That is 5.2% average over the reported 89 sells, of which 26 gained 15% or more. This week we will replace PCLN, SID and ATRO with CMED, VIP and FSLR.

QHF Closed Trades:
Winners: 44, avg +71.0%
Losers: 23, avg -23.9%
Total: 67, avg +38.4%

Regards,

Karel

[Karel]

New Top 3: DNR, RIG, ARW

" "Nothing to write home about" is nice compared to last week" is nice compared to last week. My funds dropped to the bottom YTD. A minus 10% score in one week is interesting:

SPY: 24.83 (-5.8%; -9.7%)
QQQQ: 25.93 (-3.6%; -11.4%)
IWM: 23.48 (-4.2%; -11.5%)
QHF-: 26.04 (-6.8%; -13.9%)
QHF: 27.97 (-9.9%; -17.3%)

No Hall of fame this week (well, LXU dropped only -0.5%)
Hall of shame: QMAR (-30.7%), VIP (-16.9%), DNR (-15.5%)

The new Top 3 are DNR, RIG and ARW. Do we need a new stock for our fund? Yes, we do. There are 3 stocks marked "stalling" (GRMN, GGB and RIO), and in this stock climate I will ignore the droppers. I'll replace them one by one and GRMN is the next to go. It will be replaced by AAPL. Although buying may not be a very smart idea right now. This where the original $$$Mr. Market$$$ method looks superior. It just sits tight in periods like these.

PCP got sold for 123,85 a 7.0% gain in almost 8 months. That is less than half of my target (20%/year > 15%). RIG entered the lists at 137.88.

The baseline fund got rid of PCU, FWLT, and LXU for a -10.8% average loss. That is 6.2% average over the reported 86 sells, of which 26 gained 15% or more. This week we will replace NOK, FCX and TNP with AAPL, CAM and NOV.

QHF Closed Trades:
Winners: 43, avg +72.4%
Losers: 23, avg -23.9%
Total: 66, avg +38.8%

Regards,

Karel

[peanuts]

...
The baseline fund got rid of DECK, NOV and VIP (+21.8%) for a 6% average gain. ...
Regards,

Karel

Nice showing, duuude!!! The VIP was very nice to many of us I think you made the right choice to exit: http://technicaltrades.net/Scuttlebu...hp?p=4676#4676

[Karel]

New Top 3: JEC, SID and RIG

"Nothing to write home about" is nice compared to last week:

SPY: 26.35 (-0.8%; -4.1%)
IWM: 24.52 (-2.6%; -7.5%)
QHF-: 27.94 (-4.3%; -7.6%)
QQQQ: 26.90 (-2.8%; -8.1%)
QHF: 31.05 (-5.3%; -8.2%)

Hall of fame: GGB (+3.0%), RIO (+0.8%), SID (+0.4%)
Hall of shame: GRMN (-19.3%), GNK (-16.7%), FWLT (-11.3%)

The new Top 3 are JEC, SID and RIG. Do we need a new stock for our fund? Yes, we do. There are 4 stocks marked "stalling" (PCP, GRMN, GGB and RIO), and 1 has dropped a lot sice its last high weekly close (GNK). I'll replace them one by one and PCP is the next to go. It will be replaced by RIG.

The baseline fund got rid of DECK, NOV and VIP (+21.8%) for a 6% average gain. That is 6.8% average over the reported 83 sells, of which 26 gained 15% or more. This week we will replace PCU, FWLT, and LXU with JEC, BYI, and ANR.

QHF Closed Trades:
Winners: 42, avg +73.9%
Losers: 23, avg -23.9%
Total: 65, avg +39.3%

Regards,

Karel

[Karel]

Top 3: DNR, ATW and RIG

My first report of the year is late, alas! Anyway, the start was nothing to write home about. I'll start comparing my "real" Marketocracy fund QHF (and my baseline fund) compared with the EOY 2007 results, so we'll see two percentages, the first for the week, the next for the year. My funds did relatively well, or shouldn't that be: not too badly. Here goes:

QHF: 32.79 (-3.0%; -3.0%)
SPY: 26.56 (-3.4%; -3.4%)
QHF-: 29.19 (-3.5%; -3.5%)*
IWM: 25.18 (-5.1%; -5.1%)
QQQQ: 27.67 (-5.5%; -5.5%)
*corrected from -2.4%

No halls of fame and shame this short week.

The new Top 3 are DNR, ATW and RIG. Do we need a new stock for our fund? Yes, we do. There were 3 stocks marked "stalling" (GEO, PCP and GRMN), and 1 has dropped a lot sice its last high weekly close (GNK). I'll replace them one by one and GEO is the first to go. It will be replaced by DNR.

In the baseline fund we will replace DECK, NOV and VIP with DNR, ATW and RIG.

QHF Closed Trades (no changes):
Winners: 41, avg +75.4%
Losers: 23, avg -23.9%
Total: 64, avg +39.7%

Regards,

Karel

[Karel]

So how was 2007?

My write-ups and stock picking suffered from end-of-year activities. Let us see how I finished 2007. Next weekend I'll pick a new Top 3 and most likely replace a stock (GNK, to be precise, as its recent performance has been lackluster). The numbers (percentages since 23rd of February, when I started working on my portfolio again):

QHF: 33.81 (+36.1%)
QHF-: 30.24 (+21.7%)
QQQQ: 29.28 (+13.5%)
SPY: 27.49 (+2.3%)
IWM: 26.52 (-6.3%)

Did I beat the markets? Rather! Did I beat Warren Buffet? Yes! as mr. Buffet only scored 32.5% over the same period.

I owe you the sale of PCU, for 102.6, right in a local dip (a built-in risk of my new strategy). But that was still a gain of 102.2%, or 54.8% annualized, so I am smiling indeed. QMAR was bought at 25.80 (and is down 11% or so).

On the 10th of December the baseline fund got rid of GGB, BVN and MDR, for an average loss of -1.5%, and on the 17th of December the fund got rid of CHNG, ACH, and RIO, for an average loss of -19.5%, or a 6.8% average gain over the reported 80 sells (of which 25 gained 15% or more). Next week we start selling and buying again. The last buy (12/17) consisted of QMAR, FSTR and PBR.

QHF Closed Trades:
Winners: 41, avg +75.4%
Losers: 23, avg -23.9%
Total: 64, avg +39.7%

Regards,

Karel

[Karel]

New Top 3: NOK, PCU, TTES

A nice week, with my funds rebounding very, very nicely:

QHF: 34.84 (+6.1%)
QHF-: 30.81 (+4.4%)
QQQQ: 29.92 (+2.0%)
SPY: 28.37 (+1.5%)
IWM: 27.37 (+2.3%)

Hall of Fame: VIP +15.8%, SID +11.3% (in its first week), FWLT +11.1%
Hall of Shame: GNK -1.2%, NOK +0.4%, LXU +1.7%. Shame was a relative thing this week.

The new Top 3 Picks are NOK, PCU, TTES. Do we need a new stock for QHF? No, because with the rebound all stocks below the "dropped too much" line made it to the high side of that line.

DWSN got sold for 67.12, a gain of 4.7% in about 3.5 months. That is a bit below target (20%/year). SID was bought at 76.55.

The baseline fund got rid of DWSN, NOK and AL*, for an average loss of -11.7%, or an 8.2% average gain over the reported 74 sells (of which 25 gained 15% or more). This week we sell GGB, BVN and MDR, and we buy TTES, FSIN and AXYS.

*AL (ALCAN) was actually liquidated for $101 on Nov. 14th, because of a buy out.

QHF Closed Trades:
Winners: 40, avg +74.7%
Losers: 23, avg -23.9%
Total: 63, avg +38.7%

Regards,

Karel

[Karel]

New Top 3: SID, ATRO, VIP

I had two busy weekends, so I couldn't update my portfolio, neither this one, nor my real money portfolio. Now I am back, just my report is late. The closing prices last week (percent changes over 3 weeks):

QHF: 32.84 (+2.2%)
QHF-: 29.50 (-0.9%)
QQQQ: 29.33 (+2.9%)
SPY: 27.95 (+2.5%)
IWM: 26.75 (-0.3%)

No Halls of Fame and Shame this week.

The new Top 3 Picks are SID, ATRO, and VIP. Do we need a new stock for QHF? Yes, because DWSN dropped too much from its most recent high (=high weekly close, coz' I want to have a life too). SID will be its replacement. DWSN will still be a winner, but not a big one.

VSEA got sold for 39.13, a loss of -20.3% in about 3 months. NOK was bought at 37.81.

The baseline fund got rid of FARO, NOK, and GTLS, for an average loss of -14.0%, or a 9.0% average gain over the reported 71 sells (of which 25 gained 15% or more). This week we sell DWSN, NOK, and AL* and we buy PCLN, SID, and ATRO.

*AL (ALCAN) was acquired by Rio Tinto in November, but the position still shows up in Marketocracy(!). The offer was USD 101.

QHF Closed Trades:
Winners: 39, avg +76.5%
Losers: 23, avg -23.9%
Total: 62, avg +39.3%

Regards,

Karel

[Karel]

New Top 3: FCX, TNP, RIO

Did I mention the triumphant progress of the fund only two weeks ago? Well, it had some sort of a check the previous week (-3.2%), and this week was moderately disastrous overall. A good reminder that momentum stocks can be very vulnerable and far from a silver bullet:

QHF: 32.14 (-6.0%)
QHF-: 29.77 (-5.0%)
QQQQ: 28.59 (-8.1%)
SPY: 27.28 (-4.0%)
IWM: 26.84 (-3.4%) (Yes, this is the winner)

Hall of Fame: FWLT +2.8%, MTL +2.1%, VIP -0.3%(!)
Hall of Shame: GEO -17.4%, LXU (last weeks pick) -14.2%, PCU (my running POTW pick) -14.0%

The new Top 3 Picks are FCX, TNP, RIO. Do we need a new stock for QHF? Yes, because I decided to stop outguessing myself and to kick out "droppers", unless I find a really good excuse. VSEA heads the list of those. One stock of the Top 3 is already held by my fund, so I have to dig deeper and I add NOK, which will also be the replacement.

GLF got sold for 42.22, a loss of -20.4% in about 6 months. LXU was bought at 26.68.

The baseline fund got rid of PCU, MTL, and FWLT, for an average gain of 33.4%, or a 10.0% average gain over the reported 68 sells (of which 25 gained 15% or more). This week we sell FARO, NOK, and GTLS, and we buy NOK(!), FCX, and TNP.

QHF Closed Trades:
Winners: 39, avg +76.5%
Losers: 22, avg -24.1%
Total: 61, avg +40.2%

Regards,

Karel

[Karel]

Ugly chart.

No, I don't think so. The drop was a huge cash dividend. Dividend adjusted NHY really gained 7.5% or so from Oct 11 onward. Revenue is down year over year, earnings are up, and there has been quite some merging and splitting going on. It doesn't look bad, but I really don't know. A real problem for me is that the stock is going to get delisted, so access to a European exchange would be almost required (unless you love pink sheets).

Regards,

Karel

[New-born baby]

Karel,
Do you have any opinion or knowledge of NHY? Thank you.

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

Ugly chart.

[billyjoe]

Karel,
Do you have any opinion or knowledge of NHY? Thank you.

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

[Karel]

New Top 3: PCU, DWSN, NOV

A day late, but here is my report:

QHF: 34.18 (-3.2%)
QHF-: 31.35 (-2.2%)
QQQQ: 31.11 (+0.9%)
SPY: 28.42 (-1.6%)
IWM: 27.78 (-3.0%)

Hall of Fame: RIO +2.5%, GEO 2.0%, VSEA 2.0%
Hall of Shame: GRMN -16.0%, GLF -12.0%, GNK -8.2%

The new Top 3 Picks are PCU, DWSN, and NOV. Do we need a new stock for QHF? Yes, because I decided to stop outguessing myself and kick out GLF. The Top 3 is already held by my fund, so the replacement stock will be LXU.

WCG got sold for 32.43; a loss of -61.3% in about 8 months. NOV was bought at 73.67.

The baseline fund got rid of VIP, NOV and MTW, for an average gain of 21.5%, or an 8.9% average gain over the reported 65 sells. This week we sell PCU, MTL, and FWLT, and we buy PCU(!), FWLT(!), and LXU.

All trades were effected yesterday, at the open, as far as Marketocracy allows.

QHF Closed Trades:
Winners: 39, avg +76.5%
Losers: 21, avg -24.25%
Total: 60, avg +41.3%

Regards,

Karel

[spikefader]

Hello Spike,

yes, that makes sense. I think there is another factor that explains the relative "spikyness" of the Marketocracy graph, compared with the Equity Curve. The Marketocracy graph is a weekly or daily curve of the portfolio value, while the Equity Curve only considers closed trades. (Where else did we hear that again?) I think this also accounts for a smoothening effect.

Thank you for your contributions!

Karel

Great!

Yep, I think you are correct about the smoothening effect.

In any case, I think it's safe to assume that the equity curve numbers I mentioned earlier are a good reflection of reality, and for the benefit of any forum members who don't know what that really means........your system is outstanding!

Math expectancy of 1.948 and kelly of 0.59 are insanely HUGE numbers and definately worth following. I don't know how many people actually read this thread, but it's a gold mine.

As far as math expectancy, anything over 0.4 is excellent. Yours is close to 5 times better than excellent! And from what I've read, that kelly number really means that it is "statistically safe" (whatever that really means) to invest up to 59% of one's total portfolio value in the system.

So right back at ya: Thank you for your contributions!

I'd encourage everyone to rate this thread a five and read it regularly. And give Karel some feedback for the love of Pete! It's always nice to hear a little praise and thanks for good work.

[billyjoe]

Kerel,
I don't know how you rate stocks, but we must be doing something similar. My top 25 ratings have VIP 3rd , MTL 6th , and DECK 9th.

Here's the top 10:
1. MOS
2. SPWR
3. VIP
4. FLIR
5. ZRAN
6. MTL
7. SCHN
8. AXYS
9. DECK
10. SID

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