Karel's Marketocracy Fund

[Karel]

That was a long time ago, that I wrote an end of year result. The portfolios are dormant for the moment because the screens didn’t generate enough picks to choose from, but I one of these days I am going to check if that has changed.

[Karel]

Marketocracy has changed and I will lose my portfolios. This thread will stop. Well, it ran out of steam a long time ago anyway.

[riverbabe]

Marketocracy has changed and I will lose my portfolios. This thread will stop. Well, it ran out of steam a long time ago anyway.

No no. Say it isn't so. What happened to the funds? The strategy?

[Karel]

Oh, the stragey was a weak copy of $$$Mr. Market$$$'s but still went well. Then I got some health problems and my personal momentum got lost. The funds suffered from that, and now Marketocracy is restyling their free, registration only service into something very limited and unusable for tracking a strategy. I think about looking for another portfolio simulation. Starting completely anew might be just what I need.

[Louetta]

Oh, the stragey was a weak copy of $$$Mr. Market$$$'s but still went well. Then I got some health problems and my personal momentum got lost. The funds suffered from that, and now Marketocracy is restyling their free, registration only service into something very limited and unusable for tracking a strategy. I think about looking for another portfolio simulation. Starting completely anew might be just what I need.

Hang in there, Man.

[Karel]

You will find my reports on my new Investopedia portfolio at:

http://www.mrmarketishuge.com/showthread.php?4039-Karel%92s-Investopedia-Portfolio-for-the-Stock-Only-Game-2017

[antioch6]

Here is Karel's loved Marketocracy thread, where he posted his weekly updates on his top three companies based on MrMarket's formula. To enjoy a walk down the path they left for us, I will continue Karel's Shotgun portfolio with weekly updates and a top 3.

This should give me a nice weekly routine for the stock market on the weekend, so no decisions based on emotion. The last thing that I would need for this strategy is a market timing service, and indeed I spent the last 3 years and over $100,000 dollars, all my money to find a market timing service, but I didn't find one for long term trades. This must mean you can't time the market, so like Karel I will submit to a bear market when one comes, and I will keep my hope that when it ends there will be a new bull market that takes prices back to the highs. This is based on a belief that the government will continue supporting business and keeping people's jobs with time and money. Without the government, companies go bankrupt and culture turns wild at the mercy of the oldest and most enriched financier. But I believe in young people and in opportunity, so this strategy will be for improving life at the bank when I am done with all my house and hotel work.

So how did Karel Update his fund? He created a dump like MrMarket. So first I will create a universe of 200 stocks. I am using MarketSurge Screener. I have 200 stocks filtered from earnings stability, p/e ratio, debt, and relative strength. Now I will rank them on Price Performance and Price Performance divided by P/e Ratio. I won't use 3 consecutive years of earnings and sales growth, I will use a stable earnings number based on the last few years of reporting. This means the company might not be growing, but it's earnings are stable and it's p/e ratio is reasonable, and its stock price is strong relative to what else is out there.

There were a lot of stocks to pick from and I think Karel would be happy with the results. Here is the dump after I filtered for a daily average volume of $1,000,000 dollars:

UGP, PLAB, CM, SBS, HPE, RPRX, TD, RIO, C, GSK, WT, MFG, HSBC, STT, RRX, CFG, ST, BK, FDX, VLY, NTRS, SMFG, DD, WBS, BIIB, NVS, HE, MUFG, NGG, KEY, ZTO, HASI, TXT, GILD, EBC, CSCO, ABEV, CNX, FHN, FITB, JPM, POR, MTB, OHI, AQN, SLB, CCK, GTES, BKH, BCE, BUD, BALL, EPD, ES, WPC, CB, D, KRG, BRX, O, CVBF, EXC, UE, CCEP, ALGN, WTRG, CNI, REG, PCG, ORI, NNN, T, ADC, SKT, PSA, EPRT, DVA, PB, EXR, OKE, STZ

Which ones do you like? And why?

I will buy the top 3 from this lisk next week after I go to the bank and open up my brokerage account.

[antioch6]

I was looking desperately for a way to time the market to avoid downside. I simplified it down to timing the market as limiting your downside, and limiting your upside, because everyone buys when it goes up and sells when it goes down. This is complicated because if something is going to zero you want to sell it more and more when it goes down because you can only make 100%, but if something is going higher you don't necessarily want to buy more as it goes higher because eventually it goes down for a while. This is the bet/trade that always comes around when the market is crashing, half the traders think it is going to zero, and the other half think it will come back and go higher. Well who is right? And what should we do with our buys / sells?

I think it comes down to what makes the market go up, which is: someone paying a higher price for whatever reasons. As long as there is a market prices will go higher. This seams because governments don't want to take on deflation but want to keep things the same, so people with money invest in finance and prices go higher until there is a bankruptcy cycle, then governments give out money again if the assets support enough jobs and political wealth.

So what does this mean the market is going over the next few years? Are we near a bankruptcy cycle, are we marketing higher, or are we in a deflation because of weak demand? Things seem fairly normal out there except for some pressure at the higher end. Maybe this means we are in-between a bankruptcy cycle and marketing higher, as new companies start growing and older companies like those based on A.I. start going through a deflation cycle from possible weak demand and overinvestment. That seems to be the case as of now.

So the decision to invest must be on the smaller side and with companies that are benefiting from new trends, or who will survive when there is deflation and at a good price. What companies pass this criteria from my screener? Karel didn't want to pay such close attention to his companies, and his main downfall was not having technical criteria for stocks that fall in a bear market. This is solved by using an absolute price performance on his 1 year timeframe, buying companies that fall the least in a bear market, and that still have a comparable p/e ratio to justify their strength. Doing this we can invest straight through a bear market on a weekly basis without stopping.

Buying and selling companies seems serious because of the work involved. Buying and selling stock seems not that serious but we still need to know it. With all that said this week's top 3 are RPRX, BCE, and ORI. I am trying to buy these as soon as possible, but when I think about the long years that it takes to see stock returns, I'm not that eager to get started. I am willing to be there regardless of what happens, and we will see.

I am speaking with the brokers and the sales office at Merrill Lynch and I am hoping to have the account setup by next week. In the meantime, I wonder if I really need to buy these companies or if I should not. What do I really want from stocks, and what do I want from sending my money in to the brokerage firm? I'm not having any expectations I seem to be merely going in order from the bank.