It doesn't matter how you get there...it matters where you go. Owning a position in FRED over this time period would have outperformed the Nasdaq by 6% and outperformed the S&P 500 by about 21%. Many mutual fund managers are very well compensated for merely matching or slightly exceeding these market indices. I would think that if they had also owned FRED during this time period, thet would have been very pleased at its contribution to their portfolio. People that consistently outperform market indices should be very pleased with their performance. I am very pleased with my FRED trade. Cutting losses is for losers. $$$MR. MARKET$$$ http://groups.yahoo.com/group/mrmarketishuge/
This reminds me of one afternoon a few months ago when I had CNBC on in the background, and during their power lunch show they profiled a bunch of students in CA who were managing some student fund. They weren't Wharton MBAs, but they were being heralded by CNBC because their picks had outperformed the S&P500. And as they took the pains to point out, that merely meant that they hadn't lost as much. Ha. The fact that mutual fund managers are well compensated even though their portfolio performance is lousy is not an endorsement of their performance, let alone 8% annual returns, in my book.
Looks to me like your "picks" have gone south in a HUGE way. Is that why we haven't heard from you lately? Looks to me like you're down BIGTIME recently. And don't come back that I am inferior to you, b/c I DO have an MBA from a top 5 business school, and my back has no hair. So I believe I beat you.
I'm sure that I am intellectually inferior to you. Your judgement is probably quite cogent regarding others in your world. It must have been tough to have to take classes and one of a kind guest seminars from guys that are intellectualy inferior. Personnally, I don't recollect many grad students or faculty colleagues at Wharton who were viewing me as inferior. Sloan was my fav though. Thanks for reading my post on your situation, looking forward to seeing when your strategy reaches a limit. Who did you have for econometrics and corporation forward planning?
I don't equate training with intellect. And, I am well-trained. Perhaps it gauges in some way intellectual capability achieved to date, but I wouldn't say that holding a Wharton MBA is the pinnacle of intellectual achievement. Certainly it can be presumed that the holder of a Wharton MBA has demonstrated intellectual achievement within the context of the Wharton MBA curriculum. But I wouldn't say that the Wharton MBA curriculum is the pinnacle intellectual challenge. ---------------- I agree it is the destination that is important. If one is trading or investing many small units, employing the ageless predication to the markets which is diversification, and these small units are chosen based on an intimate knowledge and thorough analysis of the fundamentals, then holding a unit through an extreme drawdown is not a bad idea. Smaller units reduce risk from total disaster with any one unit. At the same time however, as long as the fundamentals don't change, total disaster is not likely. If fundamentals continue to improve, the price will ultimately catch up to the sustained earnings. The key to this strategy is being in every pick I think, as is the key to most other methods. The length of each trade seems to be 2-4 weeks. You could use a mental time stop if the trade were against you after 4 weeks. Or you could use any of a bazillion ways to exit a loser that would improve the performance versus holding through a significant drawdown. After all, MrMarket claims to be "the best stockpicker on the planet." He doesn't claim to be the best risk manager. That is left up to the individual... as it should be since risk tolerance varies from trader to trader.
No shortage of ego here!! I just don't see anything worth the excitement. 30 consecutive gains of 15% in 30 weeks would be worth all this noise. If I don't do at least that a week I feel like a failure. A winning system, discipline to follow it, and the thankfulness for having it, are all that is required for trading success.
He has a narrow picking focus. MM must have determined somewhere picking is the most important and it is measured by stringing together consecutive wins. He went from 2 holds to 13 holds in this process over a short period of time (about 2 years of stringing). The periodicity of completing a "turn of capital" is increasing exponentially at this point and has from inception it turns out. In the Whartonese of faculty jargon, this is untenable. An expression derived from a movie staring a short piano player and an object of his attention.
This is true, however, most stockpickers (no such thing) tend to throw out 5-10 picks and some picks tend to perform or outperform. The catch is that the stockpicker's following will evolve based on the people who make money on the outperformers. The people that lose money get hooked from the "noise" the money makers make and the addiction ("if they can do it..") keeps them coming back. Hence, a "stockpicker" will seldomly play all his own trades. He will just pick the best to trade. I have seen this firsthand. ;-)
STOCK DATE IN PAID NOW GAIN TARGET Hold over a year PTSI 4/15/2002 24.84 21.31 -14.2% 28.9 AXL 5/20/2002 34.73 29.34 -15.5% 40.2 CHKE 5/22/2002 21.50 18.75 -12.8% 24.9 MDC 7/10/2002 46.59 49.70 6.7% 54.0 Hold past 6 weeks limit GRMN 5/23/2003 45.91 36.25 -21.0% 53.1 WRLD 6/3/2003 14.43 13.60 -5.8% 16.8 COH 6/9/2003 51.49 51.92 0.8% 59.8 WSB 6/30/2003 10.67 9.05 -15.2% 12.4 Hold within 6 weeks limit AMHC 7/14/2003 41.00 32.55 -20.6% 47.6 NARA 7/25/2003 18.91 18.03 -4.7% 21.9 DKS 7/29/2003 39.99 36.77 -8.1% 46.3 SFCC 7/30/2003 26.01 23.87 -8.2% 30.0 ESI 8/7/2003 39.59 39.91 0.8% 46.6 No cash available based on past records. Partial Winners (3): 10 to 15% None 5 to 9% one 0 to 4% two Losers(10): (one more than last time) New category: Loss over 20% (New category) two (two more than last time) loss over 15% Two (one lower than last time) 10 to 15% loss Two (one lower than last time) 5 to 9% loss Three (three more than last time) 0 to 4% loss one (one less than last time) Three winners total 8.3% . This it about 1/3 of the biggest loser AMHC. AMHC went down another 3% in the two weeks that passed. The capital is shrinking even fast than last reported above. Focusing on all his winners: Stock Last post NOW Change MDC 2.7 6.7 +4.0 good work WRLD 2.5 -5.8 -8.3 This is not good COH 3.1 .8 -2.3 ESI n/a .8 +.8 Focussing on his losers. He now hase four stocks down over 15%. This means they have to perform twice as well as a new buy would to fit into the string of winners. There were only three of this type loser last time. At this rate he is breaking even posting new winners as he also gets new losers over -15%. Now he may not add any picks because he has no cash. His current method before as he added losers was to add more cash. Because he does not post financial information the portfolio can not be analyzed financially. All we know is that he is loosing money faster than ever before. since the strategy is to buy terrific stocks going into their last 15% of growth it looks like he picked 10 current ones that did not grow 15% more. Four of thse have retraced back from their peaks over 15%. In this scneario, one of the most promising areas to play the market is shorting stocks that have peaked. He would be making more money shorting his picks than he is making picking and holding stocks for peaking. If he had stops in for these as shorts, he would not have had any stops broken it looks like. If there are any contrarians out there it looks like you have a terrfic strategy for playing here. Look at the stocks still withing the 6 week holding period. There are three shorts well on their way. You would have a short winner list four long right off the bat. We are now at the cold cuts (baloney) and velveta (manufactured cheese) point.