Portfolio of the Week

[Lyehopper]

Staying in CA$H all week doesn't prove anything about anyone's stock picking prowness. .

Sure it does Ski!.... It says that you stayed in ca$h that week to avoid a loss in an undecided market.... It also shows that a player ACTUALLY took the time and showed enough interest in the POTW to post his (deliberate) ca$h pick. It also shows the personality of various players and their investment styles.

Peanuts' contest is not just a weekly deal. He has assigned a ca$h value in our imaginary "account" thus making the contest more realistic. With this in mind I'm (personally) striving for the most ca$h in my POTW account by year end 2007..... and I don't care about placing in the weekly standings.... Look, If my account is larger than yours by December 31, 2007?.... That'll sure say something about my freakin' "prowNess" now won't it?.... LOL!!!!

[peanuts]

Is still to late to enter? I know I will lose 3% each week, I missed..My pick is bbi long sirtuck

Welcome aboard, Sire! Yes, it is true that your initial $1000 will be reduced by 3% the first week, and that balance reduced again by 3% last week, but not to worry, you still have 50 weeks of profitability to make up for those minor losses. Good luck.

I have your first position as BBI long, opening price on Tuesday.

Would anyone else like to join the fray? All are welcome!

[sirtuck]

potw

Is still to late to enter? I know I will lose 3% each week, I missed..My pick is bbi long sirtuck

[skiracer]

I think that we can all agree that the best way to improve your performance at anything is to practice, and practice, and practice some more until you get it right.

That being said, I view the POTW as a perfect place to practice your stock-picking skills. It is also a perfect place to practice your money management skills.

The yearly contest is the big picture... it answers the question, "what is the best manner to grow your money in one year by trading in the stock market?"

The weekly contest is the small picture. It is a contest within the larger yearly contest... it answers the question, "what is the hottest thing in the stock market, right now?"

It is up to the player to decide whether they want to risk their balance on a trade each week. The risk and return ratios should be considered, and the detriment of not cutting losses short is evident, as in the example I have stated earlier. If a player cannot determine what the best place for their money will be right now, then he or she should enter a CA$H position, as it is the only way to be certain that their capital is preserved.

This is only a contest, but it can be applied to real life investing. In reality, there are added benefits to this method, as a cash balance can be placed into a money market account and earn interest on a daily basis. But for the sake of this contest, a CA$H position which neither appreciates or depreciates serves the purpose of a real-life cash position. There is no harm is saying, "I don't know what is hot right now, but I do know that I want to have lots of money in the end, so it is safer to stay neutral, now"

I think it is safe to say that each and every one of us wants to make money in the long run. Under normal circumstances, we do not want to take losses, ever. We all have our own purposes for choosing the stock market to accumulate wealth, and we all have to implement our plans to the best of our ability. I think that these statements are indisputable.

I would have to agree with the way you stated it Peanuts and I think that CA$H is a useful tool to stay in a safe haven. But it has nothing to do with stockpicking abilities and I thought this contest was about that but I see that we have transcended that and gone into a combination of other factors. Staying in cash and using that as a ploy for money management doesn't interest me as far as stockpicking abilities is concerned. Of course the orginal POTW contest has evolved over the course of the last couple of years into what it is today just as we have so this is what we have now. Money preservation and capital management instead of one good old stock picking contest. I think we will see more and more in CA$H positions over the course of the year and less and less stock picking because that is the guaranteed way of preserving your capital with alot less risk than actually picking stocks.

[Lyehopper]

I'll start off in Ca$h.......again.

Hey Peanuts.... stick me in ca$h again please sir....

btw.... The POTW is looking great under your watch Peanuts .... I'm sure you'll continue to find ways to improve it as time goes on.... Keep up the fine work!

Congrats to all the top players this week.

[peanuts]

just some thoughts...

I think that we can all agree that the best way to improve your performance at anything is to practice, and practice, and practice some more until you get it right.

That being said, I view the POTW as a perfect place to practice your stock-picking skills. It is also a perfect place to practice your money management skills.

The yearly contest is the big picture... it answers the question, "what is the best manner to grow your money in one year by trading in the stock market?"

The weekly contest is the small picture. It is a contest within the larger yearly contest... it answers the question, "what is the hottest thing in the stock market, right now?"

It is up to the player to decide whether they want to risk their balance on a trade each week. The risk and return ratios should be considered, and the detriment of not cutting losses short is evident, as in the example I have stated earlier. If a player cannot determine what the best place for their money will be right now, then he or she should enter a CA$H position, as it is the only way to be certain that their capital is preserved.

This is only a contest, but it can be applied to real life investing. In reality, there are added benefits to this method, as a cash balance can be placed into a money market account and earn interest on a daily basis. But for the sake of this contest, a CA$H position which neither appreciates or depreciates serves the purpose of a real-life cash position. There is no harm in saying, "I don't know what is hot right now, but I do know that I want to have lots of money in the end, so it is safer to stay neutral, now"

I think it is safe to say that each and every one of us wants to make money in the long run. Under normal circumstances, we do not want to take losses, ever. We all have our own purposes for choosing the stock market to accumulate wealth, and we all have to implement our plans to the best of our ability. I think that these statements are indisputable.

edit: I would also like to dispute that it is luck to obtain a nice return in the first day, and poor sportsmanship to ride out the rest of the week in CA$H... it's like vacation time... well EARNED

[Karel]

PCCC long

Stenzrob, congratulations! Great pick!

I'll take PCCC long again; it is still heading my screen.

Regards,

Karel

[skiracer]

Since the aim of this thread is to reflect reality as much as possible,
I think we sould consider paying a money market rate to anyone who stays in CA$H all week. Why should a person be penalized for making
the investment decision to be in CA$H?

I think your missing my point which is the risk factor everyone faces who makes a pick. Staying in CA$H all week poses no risk and is thus a safe haven. The logic and concept behind the contest is to see who can make the best selections during the week and over the course of the year. Staying in CA$H all week doesn't prove anything about anyone's stock picking prowness. I don't think it is the same as making a selection during the week. Originally it was meant to provide a little more time for someone, for whatever reasons, not to make their pick by the open on Monday, and not for staying in all week unless like Billyjoe there were extenuating circumstances. Which in a case like his they should be granted a leave of absence and not held subject to any rules regarding making a weekly selection. I think the CA$H has evolved into something more than what it was meant to be. I feel the game was meant to be played and not to sit in a safe haven all week. I also feel that taking a gain on Monday and Tuesday on one or two positions and then sitting all week in CA$H only proves that you were lucky on Monday and Tuesday and didn't prove anything as to the strength of your picks over the course of the week. Staying in CA$H all week doesn't prove a thing and in no way can be considered actively participating in the contest as was originally intended.

[mimo_100]

Since the aim of this thread is to reflect reality as much as possible,
I think we should consider paying a money market rate to anyone who stays in CA$H all week. Why should a person be penalized for making
the investment decision to be in CA$H?

[mimo_100]

start me in CA$H

Since this is a 4 day week and I haven't had time to research so far this year -- so start me in

CA$H

[dmk112]

CLAY - long pls

[skiracer]

Ski, I believe a position in $$CASH$$ would give you a 0% score for the week, and by doing so week after week, someone who's ahead (like me!) could at least keep the gain indefinitely.

Jiesen,
What I was thinking is that if you fail to enter a pick or at least enter CA$H for the week then you get a -3.00% penalty for the week. But if you enter CA$H at the beginning of the week and stay in CA$H all week without making a pick then there is no penalty but also no gain. You could go several weeks without any penalty and without losing any money by staying in CA$H and then play one week and if you had a positive result for that week could basically have a pretty good total without putting yourself at any risk. You might not have as large a total as someone who plays every week and has a positive result every week but there is no risk in doing that while the players that enter every week are at a much larger risk of keeping their total on the positive side when they enter a pick and play every week. How about if you stayed in CA$H every week without making a selection and then played one week and win that week with a 20% gain. Would your total reflect a 20 % gain and be $1200 which would seem great but while the others that had entered a pick every week would be at risk of a lesser percentage and total having played every week and the associated risk of having to produce a winning percentage that many more weeks in a row.

I was thinking that maybe there should be a rule providing for some smaller penalty, less than the -3% if you didn't make a selection and play, for staying in CA$H the entire week and not making some selection at all during the week thus avoiding any risk at all for the week or perhaps larger than the -3% for perhaps taking advantage of the true intention of having the CA$H position available at the beginning of the week to see which way the wind will blow. That way the CA$H position wouldn't be misused.

[jiesen]

Cash=0% gain

I should have been more specific. I was looking back at post #10018 and I think that you have plugged in this weeks percentages and the total plus or minus percentage for the first two weeks but what are the rest of those numbers representative of for the successive weeks. Just curious.
Another point that I was thinking of was that if there is a -3.00 % penalty for not playing in any given week what about anyone that just stays in cash all week and does that for a number of weeks. They have no risk, their portfolio stays at a fixed amount and then they play the next week and if they are in the positive at the end of the week how does that get computed.

Ski, I believe a position in $$CASH$$ would give you a 0% score for the week, and by doing so week after week, someone who's ahead (like me!) could at least keep the gain indefinitely.

That said, Peanuts, please put me in $$CASH$$ for next week!

Also, congrats to Stenz, Spike, and Peanuts for the superb picking last week. I can't believe you took my bronze with just a 0.05% lead there, Peanuts! If you just would have rounded to the nearest 0.1% instead, we could have shared the prize, but nooo, you had to go and be all accurate about this.

Thanks for doing the cumulative scoring this way, too. You expressed perfectly the reasons for doing this, and it's exactly why I had posted cumulative results in the past contests. I'm just glad I don't have to do it anymore... I felt bad when I got lazy and neglected that duty. Now I can focus some attention to POTY updates instead.

[skiracer]

I should have been more specific. I was looking back at post #10018 and I think that you have plugged in this weeks percentages and the total plus or minus percentage for the first two weeks but what are the rest of those numbers representative of for the successive weeks. Just curious.
Another point that I was thinking of was that if there is a -3.00 % penalty for not playing in any given week what about anyone that just stays in cash all week and does that for a number of weeks. They have no risk, their portfolio stays at a fixed amount and then they play the next week and if they are in the positive at the end of the week how does that get computed.

[peanuts]

Great job this week Stenz, Spike, and Peanuts. Peanuts could you explain that weekly sheet to us and how you have it set up please.

I'm not sure what needs to be clarified. Maybe you have some direct questions?

Each player starts the year with an account balance of $1000

Each week, a player's balance is adjusted by their respective weekly score.

To double your money in 52 weeks, you need to get at least 1.35% return each week.

The purpose is to expose what it means when somebody says that they made 'so and so' percent in 'such and such' time. It is also meant to show the detrimental effects of just 1 poor performance, and what it takes to comes back from a big loss.

A few members should understand exactly what I'm taking about. This little portfolio tracking is all about risk and return management. If people begin to get satisfied with 2-3% gains, but don't cut losses short, 5 weeks of 2% gains can be wiped out by 1 week of a 9% loss.

example, starting with $1000:

week 1: 1000.00 x 2% = 1020.00
week 2: 1020.00 x 2% = 1040.40
week 3: 1040.40 x 2% = 1061.21
week 4: 1061.21 x 2% = 1082.43
week 5: 1082.43 x 2% = 1104.08

...so after 5 long difficult weeks of earning 2% each week, $1000 compounded each week yields a total return of $104.08 or 10.41%.

However, imagine if during the 6th week there is a loss of 8%. This puts the portfolio value back to 1015.75... less than the total portfolio value after the first week!!!!! So you fight so hard to make the 2% each week for 5 weeks straight, but never protect those gains in the sixth week, and really end up with a net gain of a small fraction of the total return after week #5.

Spike and Runner have been trying to drive home the reality of this risk return management to many people here, but few are actually picking up what they're dropping. Sometimes it takes undeniable statistics to wake some people out of their sleep.

Hopefully, this will help members with their own personal portfolios.