Following $$$MrMarket$$$

[Gatorman]

Please also allow me to express my regrets and condolences over this loss to you and your family.


Stan

[billyjoe]

Karel, You're such a good guy. I wish only the best for you and your family.


billyjoe

[Jaws57]

Karel, you and your family are in my prayers.

San, (Jaws57)

[stocks54]

Karel,

Sorry to hear about your loss. You and your family will be in my prayers.

Stocks

[df21084]

I am sorry

You and your family are in my prayers also.

Dave

[Karel]

I want to thank everyone for their kind words and prayers. It really means a lot to us. Thank you very much, and God bless you.

Karel

[bec1nj]

Best wishes to your family

Karel-I hope you and the family are doing well, and I wanted to express my condolensces and best wishes to you and your entire family.
Bruce

[Karel]

Picking up the thread we have to report the sells and buys since the beginning of January:

1/18 GGI was sold at 27.73 (MM sold at 29.75, but then HE is HUGE), to be replaced (1/21) by ARLP, bought at the close for 71.30 (MM bought at 70.30)

3/22 CMN was sold at 28.99 (MM sold at 29.00, but then HE is HUGE ), to be replaced (3/29) by CMTL, bought at the close at 49.89 (MM bought at 50.55).

6/8 the portfolio sold CMTL for 39.57 (gap up); MM missed the sell. No, we are not HUGE, we just use limit orders.

6/15 CME was sold at 259.47 (MM sold 6/22 at 259.67), to be replaced (6/2 by TOl, bought at the close at 102.05 (MM bought for 100.37)

6/29 DW was sold at 44.35 (MM sold at 44.2, to be replaced (7/6) by HANS, bought at the close at 88.10 (MM bought at 89.56)

7/11 SSNC was sold at 34.15 (MM sold at 34.23), to be replaced (7/14) by SNHY, bought at the close at 40.05 (MM bought at 41.2

Currently in portfolio are AACE, ARLP, BEL, CBK, FLIR, HANS, NUTR, OFG, SNHY, and TOL (10 stocks). MM holds 4 stocks more: two stocks from before these forums started: PTSI and PRX, and two stocks the portfolio already sold for MM's target (or more, in the case of a gap up). Somebody really should tell MM about limit orders

Because the last update has been swamped in expressions of sympathy (thanks again, people), I'll repeat the numbers from 1/3:

Following MrMarket: 21220 (+2.4%)
SPY: 22070 (+1.0%)
QQQQ: 22075 (+0.9%)
IWM: 23180 (+1.1%)

6 months later, the portfolio is underinvested by 2 stocks.
Following MrMarket: 21992 (+3.6%)
SPY: 22084 (+0.1%)
QQQQ: 20196 (-8.5%)
IWM: 23395 (+0.9%)

The FMM portfolio is clearly catching up, in what has been termed 'a crappy market' on these boards. The numbers show that it was (and perhaps still is) one: SPY stood still, QQQQ dropped like a brick, and the Russel 2000 (perhaps the best background for MM's picks) inched forward a little. And that while this portfolio was designed to drag extra cash around, and now is carrying even more cash!

Go MrMarket!

Regards,

Karel

[Websman]

Mr Market's portfolio is really starting to prove itself!

[Karel]

Ok, one sell, HANS at the target price of 103.18 (MM sold a few cents higher), and one buy, KBH, at 83.45 (MM bought at 82.59).

The FMM portfolio stands at 22,370 (+1.7% since the previous update), SPY at 22,257 (+0.8%), QQQQ at 20,196 (=), and IWM at 23,890 (+2.1%). Whoa! Someone stop that Russell 2000 thingy! No, wait! It doesn't matter: The Following MM portfolio will take care of it all by itself.

Actually, the FMM portfolio did comparatively better than the IWM port, as the FMM port is about 60% invested and the IWM comparison port 80%. 80*1.7%/60 = 2.27%. OK. But that is under the hood. The FMM port lost to IWM this week. No problem. Indexes can outstrip the FMM port during a week or a longer time frame, but not in the end. At least, that is our expection.

The Winners/Losers picture is as follows (including open positions):
33 winners (avg 13.5%),
6 losers (avg -40%),
total positions 39 (avg 5.3%).

The annualized return since inception (sept 2003) is 6.4% for this portfolio, but please remember it started empty, and filled only slowly.

Regards,

Karel

[Karel]

Well, we have been busy, so this port slept a bit. However, it is pretty easy to update, and that is what I have done. How did the FMM (Following $$$Mr.Market$$$) portfolio fare in 2005? First the results:

FMM 22040
SPY 22398
QQQQ 22296
IWM 23715

The FMM port still holds the red lantern, and that doesn't look impressive. It isn't. But please remember that this port was designed as a decidedly-not-huge implementation, and that it carries a lot of cash. At the moment, the port is holding 10 stocks, against $$$Mr.Market$$$'s 14. Two stocks were from before the inception of this portfolio, two stocks (NUS and TOL) were supposed to be sold with a limit order. The cash reserve is therefore about 60% at the moment. Theoretically it should be about 50%, but some losers have lost rather a lot, dragging the stock position down. This is the kind of sluggish portfolio you like when you are a wimp, and still want to trade $$$Mr.Market$$$'s picks.

Now the surprise: how did the FMM port do this year?

FMM +3.86%
SPY +1.49%
QQQQ +1.00%
IWM +2.31%

Perhaps the numbers for SPY and friends look too low. That is right, I cooked them. As the FMM didn't start fully invested, it didn't seem right to start the comparison portfolios fully loaded. So they also took some time to fill: 1/14th with every new slot filled; currently they stand at about 85% (12/14). This explains the lower returns. Did you notice the FMM port leading the pack? So did I.

Including the open positions we count 36 winners (avg 14.3%), 10 losers (avg -33.6%), for a total average over 46 positions of +3.9% per position. Decent. Now where is that bull market?

Regards,

Karel

[Karel]

I wanted to turn this into a monthly feature and not bore you with another reporting post every week, but I missed a month. OK. In the meantime, $$$Mr.Market$$$ sold RIO and QSII, and bought GGB and WIRE. The Following Mr. Market portfolio did likewise. How is this timid implementation of $$$Mr.Market$$$'s glorious portfolio doing against the market?

FMM: 23115 (+4.9%)
SPY: 22939 (+2.4%)
QQQQ: 22603 (+1.4%)
IWM: 25422 (+7.2%)

Now this is really, really nice. The FMM actually went past SPY and QQQQ. Only that pesky Russell 2000 is in front, and even widened the gap. We'll see if it can keep that up.

The results look like this:
39 winners (including open positions), average 14.3%
9 losers (including open positions), average -32%
48 total positions, average 5.6%

Regards,

Karel

[Karel]

OK, a month has gone by, and the Following $$$Mr.Market$$$ portfolio saw some action. GGB was sold at the target price, just like $$$Mr.Market$$$ did, and was replaced by MFLX, bought at the close at 59.90 (MM 60.50). WIRE was sold at the target price, again just like $$$Mr.Market$$$ did, and was replaced by BBD, bought at the close at 40.15 (MM 40.85). The standings:

FMM: 23364 (+1.1%)
SPY: 23172 (+1.0%)
QQQQ: 22972 (+1.6%)
IWM: 26409 (+3.9%)

Basically the picture didn't change much, although the Russell 2000 (IWM) lengthened its lead. This is also true when we realize that the FMM is currently about 38% invested (target 70%) and the other three "shadow" portfolios over 80% (target 100%). IWM wins, period. The reason the FMM is underinvested is, I repeat for the benefit of people who start reading at this message, due the fact that a) the portfolio is designed for 30% cash as a safety cushion and to aid rebalancing; b) there are still two stocks in $$$Mr.Market$$$'s portfolio from before the inception of the FMM portfolio, plus c) $$$Mr.Market$$$ missed two sells. The FMM, acting like the wimp that it is designed to be, refuses to pick $$$Mr.Market$$$ like stocks on its own, easy as that would be.

All these handicaps, plus the slow start of the portfolio (empty, with stocks added whenever $$$Mr.Market$$$ sold a pre-FMM stock) still result in an annualized result of 5.3%, which seems to be picking up. We'll see!

The individual stock results look like this:
41 winners (including open positions), average 14.04%
9 losers (including open positions), average -32%
50 total positions, average 5.8%

Regards,

Karel

[spikefader]

EDIT: Here is the equity curve based on those numbers, Karel.

[DSteckler]

That equity curve isn't correct, Spike.