$$$MR. MARKET$$$'s Personal Homepage and Stock Portfolio

[mrmarket]

Mr Market, You're well on your way to 100 consecutive profitable trades, which shows that you are the worlds greatest stock picker. Your model consitently outperforms the market. It's amazing!

Although your success in picking winners is incredible, I have a new and unique idea... What if your model were to be used to scan for the least fundamentally attractive stocks? Have you ever thougth of shorting stocks for 15% gains? You could be even huger by having 74 consecutive short trades to go along with your long trade streak! You would make history!!! Just imagine the possiblities!

Am I a crazy??? Am I mad??? Am I a Freakin lunatic???

Bwahahahaaa!!!....err...BWAAAAHAHAHAAAHAHAHA!!!

Since the market is upwardly biased, meaning in the long run it alwats goes up, I have committed to only investing on the long side.

[Websman]

Since the market is upwardly biased, meaning in the long run it alwats goes up, I have committed to only investing on the long side.

Ok...so I'm a freaking lunatic.

[olrac_ed]

Please comment on new stock picks

These are some stocks I am looking at.

MCO NVY CHRW

They look like good candidates. Appreciate any comments.

Carlo

[noshadyldy]

Ok...so I'm a freaking lunatic.

Well, on you, it looks good! Actually, i would just say you're good at thinking outside of the box.

[Websman]

Well, on you, it looks good! Actually, i would just say you're good at thinking outside of the box.

Thanks Noshady! Now I feel more normal.

[mystiky]

Mr. Market, a question!

Not trying to get to personal but when you take a position in a stock, do you usually buy the same number of shares, or do you make a decision to buy up to a certain $$ amount of stock.

Example, if you were to invest for 1000 shares of CMTL at $33, that means it cost you $33K. But if you wanted to do 1000 shares of BMHC at $88, that would had cost you $88K.

Can you please share some of your insight?

[mrmarket]

Not trying to get to personal but when you take a position in a stock, do you usually buy the same number of shares, or do you make a decision to buy up to a certain $$ amount of stock.

Example, if you were to invest for 1000 shares of CMTL at $33, that means it cost you $33K. But if you wanted to do 1000 shares of BMHC at $88, that would had cost you $88K.

Can you please share some of your insight?

Basically it depends on how much I like the opportunity.

[scifos]

Question for MrMarket

Hey MrMarket, I've got a few questions for you if you don't mind.

I just finished reading "The little book that beats the market" by Joel Greenblatt.
If I remember right, you got a degree from Wharton, did you ever know or meet Mr Greenblatt? Did you take any of his classes and what did you think?

The book is about finding businesses that have a high Return on Capital. The idea being that high ROC businesses have the opportunity to reinvest their earnings at a very high rate of return, thus driving up earnings.

The book also says that you should buy businesses with a high Earnings Yield (ie low P/E ratio). Essentially, the strategy is to equally weight the ROC rank and the Earnings Yield Rank and select the top 25-30 stocks. (diversification is required because individual companies may qualify because of weird reasons, but out of a larger # of stocks most will be in the portfolio for the right reasons) Eventually the market will realize that these businesses are being sold for much too cheap and will reward the people who bought them when the earnings yield was high.

Ugh, thats getting too long. anyways, what's your take on this strategy? is seems similar to what you do, but you also look at recent price action (high r-squared, near highs) and you look more at EPS than ROC. Just wanted your comments.

[mrmarket]

Hey MrMarket, I've got a few questions for you if you don't mind.

I just finished reading "The little book that beats the market" by Joel Greenblatt.
If I remember right, you got a degree from Wharton, did you ever know or meet Mr Greenblatt? Did you take any of his classes and what did you think?

The book is about finding businesses that have a high Return on Capital. The idea being that high ROC businesses have the opportunity to reinvest their earnings at a very high rate of return, thus driving up earnings.

The book also says that you should buy businesses with a high Earnings Yield (ie low P/E ratio). Essentially, the strategy is to equally weight the ROC rank and the Earnings Yield Rank and select the top 25-30 stocks. (diversification is required because individual companies may qualify because of weird reasons, but out of a larger # of stocks most will be in the portfolio for the right reasons) Eventually the market will realize that these businesses are being sold for much too cheap and will reward the people who bought them when the earnings yield was high.

Ugh, thats getting too long. anyways, what's your take on this strategy? is seems similar to what you do, but you also look at recent price action (high r-squared, near highs) and you look more at EPS than ROC. Just wanted your comments.

I never met Joel Greenblatt. I think his basic analysis makes sense, however, it is kind of like looking in the rear view mirror rather than looking straight ahead. Having said that, all things being equal, investing in high ROC companies does make sense, relative to companies with lower ROC's. The problem comes in the accounting geeks, who can play with numbers and thus change the value of the invested capital. Check out EVA, or economic value added, for a more consistent bench mark.

[scifos]

I never met Joel Greenblatt. I think his basic analysis makes sense, however, it is kind of like looking in the rear view mirror rather than looking straight ahead. Having said that, all things being equal, investing in high ROC companies does make sense, relative to companies with lower ROC's. The problem comes in the accounting geeks, who can play with numbers and thus change the value of the invested capital. Check out EVA, or economic value added, for a more consistent bench mark.

Thanks for the response. I would agree that ROC can be misleading, espically if you only consider last year's numbers, because last year may have been an unusual one (another reason why he suggests holding 30 stocks, to reduce the chances that a large portion of your funds is in a 'fake'). How does one find EVA though? As for looking in the rear view mirror, yeah thats what it does, and he says in his book that if you are an expert and can accurately predict future earnings then by all means use that prediction instead of data from the past. But for people who can't do that consistantly and accurately (that would include most people i think) then using last years (or perhaps the last few years) works decently if you hold a basket of stocks.

FYI, the book touts an average APR of 33% over the last 17 years (may be biased because it is backtesting, not performance numbers from real-time use). I did some math and found that a 10,000 investment now, if I retire at 55 I'll have 34,669,534.26 [10000(1.33*.97)^(55-23)] the .97 is assuming a 3% inflation rate) minus taxes.

[billyjoe]

Mr. Market,
Have you volunteered for the Stardust@home project ?


billyjoe

[gerihearne]

new thread for newcomers?

Had an idea .. what if there was a place for us newcomers to market could ask our questions. I'm learning alot from senior members, but i think our own thread for junior members would be less intimidating .. a place to share our questions and our trades?
Senior members could visit and offer their opinions.
Just a suggestion ... don't know if you feel it's necessary, being that this site is SO user friendly. But, still many are new to the market and maybe more junior members would post their questions and concerns ...
Karel?
________
KT120

[skiracer]

Had an idea .. what if there was a place for us newcomers to market could ask our questions. I'm learning alot from senior members, but i think our own thread for junior members would be less intimidating .. a place to share our questions and our trades?
Senior members could visit and offer their opinions.
Just a suggestion ... don't know if you feel it's necessary, being that this site is SO user friendly. But, still many are new to the market and maybe more junior members would post their questions and concerns ...
Karel?

Nah. Just throw any questions you have or suggestions out there like you've been doing it forever. Someone will answer it or try to help you. You're only going to pick up the experience from interacting with the more experienced people. If all the newbies were grouped together in one area what would you learn from other newbies. And would the more experience traders want to visit newbieland just to see what's going on in there. In the meantime read every post and learn to decipher between what you're looking for and what's going to be helpful and what's not. Pick up a good book on technical analysis and watch what others are buying and study those buys like they're your own. You'll bring yourself up to speed faster that way than any other way. But it's work.

[IIC]

Had an idea .. what if there was a place for us newcomers to market could ask our questions. I'm learning alot from senior members, but i think our own thread for junior members would be less intimidating .. a place to share our questions and our trades?
Senior members could visit and offer their opinions.
Just a suggestion ... don't know if you feel it's necessary, being that this site is SO user friendly. But, still many are new to the market and maybe more junior members would post their questions and concerns ...
Karel?

One of my 3,156 Sayings to Live By is..."The Smartest people Ask The Most Questions"

I think a lot of people are afraid to ask questions because they don't want to sound stupid...Another one of my sayings is "The only stupid question is the one that is never asked".

ASK! ASK! ASK!...Best...Doug(IIC)

[Shadow]

Had an idea .. what if there was a place for us newcomers to market could ask our questions. I'm learning alot from senior members, but i think our own thread for junior members would be less intimidating .. a place to share our questions and our trades?
Senior members could visit and offer their opinions.
Just a suggestion ... don't know if you feel it's necessary, being that this site is SO user friendly. But, still many are new to the market and maybe more junior members would post their questions and concerns ...
Karel?

Hi Gerihearne,

I'm just like you and had the same idea. I started a thread for
just this purpose. It's been buried a few pages back. I'll try to
bring it forward for you.

Welcome and may we both learn together!

Shadow