cowboy dickrdoo tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054 2008-08-09T12:52:00Z Movable Type Enterprise 1.53 August's Rational Exuberance Update tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.4499 2008-08-09T12:50:32Z 2008-08-09T12:52:00Z Last time I posted it came as a complete surprise that the second round was over. Since it started at the beginning of February the contest would end at the beginning of August but it seems as if people are... Dick Illingworth Last time I posted it came as a complete surprise that the second round was over. Since it started at the beginning of February the contest would end at the beginning of August but it seems as if people are still posting and posting at least once a month gets me off my weekend butt.

I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless if no one follows my recommendations I know a lot people do.

Buys:

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 17.24
Average PE: 19.73 (5.34% 10yr Bond)
Allocation:16% to 17%

SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 16.41
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 26% to 38%

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 20.77
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 34% to 37%

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 23.56
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 8% to 16%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 17.78
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0% to 6%

Sells:

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 26.59
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 0%

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 22.38
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 29.74
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Yours Truly,

Cowboy Dickrdoo

]]> Tri-monthly Sector Update 7/18/08 tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.4375 2008-07-17T01:17:36Z 2008-07-17T01:19:48Z Just like the Big Audio Dynamite Bottom Line song goes: The horses are on the track. The horses are on the track. The horses are on the track. My Barney Google Sector Trifecta Fund needed to be cleaned up and... Dick Illingworth Just like the Big Audio Dynamite Bottom Line song goes: The horses are on the track. The horses are on the track. The horses are on the track.

My Barney Google Sector Trifecta Fund needed to be cleaned up and it's back to be silly because otherwise investing is so mundane. Please sing a long with me.

Barney Google, with the goo-goo-goo-ga-ly eyes. Barney Google bet his horses would win the trifecta prize. When the horses ran that day, Barney's horses ran the other way. Barney Google, with the goo-goo-goo-ga-lay eyes had a wife three times his size. When Barney Google's horses ran the other way, she divorced him. Now Barney Google with the goo-goo-goo-ga-lay eyes lives with his horses

The Sector Contestants are:

Oil & Gas Service (PXJ) "Pipeline": 13.39 FPE, 18.19 5YREG, 1.36 PEG
Insurance (PIC) " Accidental Collision ": 9.94 FPE, 10.99 5YREG, 1.11 PEG
Semiconductors (PSI) "Flying Saucer": 14.41 FPE, 15.94 5YREG, 1.11 PEG
Healthcare Services (PTJ) "Nurse Ratched": 13.29 FPE, 14.09 5YREG, 1.06 PEG
Building & Construction (PKB) "Where's Bob": 16.26 FPE, 17.00 5YREG, 1.05 PEG
Financials (PFI) "Bull nuts": 11.16 FPE, 11.64 5YREG, 1.04 PEG
Energy Exploration & Production (PXE) "Drill Bit": 12.07 FPE, 12.17 5YREG, 1.01 PEG
Energy (PXI) "Old Jed": 13.24 FPE, 13.27 5YREG, 1.00 PEG
Consumer Discretionary (PEZ) "Hand Jive": 13.42 FPE, 13.36 5YREG, 1.00 PEG
Healthcare (PTH) "St. Lucrative": 15.54 FPE, 14.54 5YREG, 0.94 PEG
Industrials (PRN) "Boilermaker": 16.01 FPE, 14.74 5YREG, 0.92 PEG
Hardware & Consumer Electronics (PHW) "Ear plug": 16.40 FPE, 14.91 5YREG, 0.91 PEG
Basic Materials (PYZ) "Silverback": 12.14 FPE, 10.63 5YREG, 0.88 PEG
Retail (PMR) "Paris Clinton": 15.32 FPE, 13.37 5YREG, 0.87 PEG
Biotechnology & Genome (PBE) "Bob New Heart": 20.17 FPE, 17.64 5YREG, 0.87 PEG
Technology (PTF) "Moby Dolby ": 16.53 FPE, 14.2 5YREG, 0.86 PEG
Pharmaceuticals (PJP) "Pill Popper": 14.65 FPE, 12.59 5YREG, 0.86 PEG
The market to Beat (Total Market): 13.83 FPE, 11.59 5YREG, 0.84 PEG
Networking (PXQ) "Ready Serve": 20.1 FPE, 16.04 5YREG, 0.80 PEG
Leisure & Entertainment (PEJ) "Love Boat": 15.78 FPE, 12.68 5YREG, 0.80 PEG
Telecommunications & Wireless (PTE) "Social Lion": 14.04 FPE, 11.20 5YREG, 0.80 PEG
Software (PSJ) "User Friendly": 18.79 FPE, 14.25 5YREG, 0.76 PEG
Media (PBS) "Katie's Calf": 16.63 FPE, 12.67 5YREG, 0.76 PEG
Consumer Staples (PSL) "Bung Wad":: 15.14 FPE, 10.12 5YREG, 0.67 PEG
Food & Beverage (PBJ) "Six Pack": 17.50 FPE, 10.05 5YREG, 0.57 PEG
Utilities (PUI) "Three Miler": 14.44 FPE, 7.87 5YREG, 0.55 PEG
Banking (PJB) "Overdraft": 15.16 FPE, 7.75 5YREG, 0.51 PEG

I'm going to bet 29% on Pipeline to win. Bet 24% on Accidental Collision and Flying Saucer to place. Bet 23% on Nurse Ratched to show. In other words I think Oil & Gas Services, Insurance, Health Services and Semiconductors are the best sectors to over weight and I'm dead serious! Over close to last 3 years my sector trifecta fund has beaten the SP500 by 14% on an annual basis so I'm start think I'm on to something.

Yours truly,

Cowboy Dickrdoo

]]> July's Rational Exuberance Updated: European Vacation tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.4270 2008-07-05T12:08:56Z 2008-07-05T12:12:08Z I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless if no one follows my recommendations I know a lot people do and changes need to be made... Dick Illingworth I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless if no one follows my recommendations I know a lot people do and changes need to be made this month. I got my overall monthly numbers but did not get my more detailed quarterly numbers but those are going to change my opinion that it's time to get 40% of your monies outside of US market which is easier said than done.

One of the problems I have is picking foreign stocks. ADRs aren't always representative of a foreign stock because they perform like their domestic market counterparts. Finding all the evaluating criteria is more difficult consequently copping out with ETFs is easier.
Buys:

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 14.08
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 29% to 39%

SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 18.87
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 21% to 29%

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 21.57
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 28% to 26%

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 23.09
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 13% to 4%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 15.85
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 9% to 2%

Sells:

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 23.01
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 0%

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 20.06
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 25.53
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

I have to buy more foreign stocks. The cop out ETFs are easy: EFA,PDN,PEH,EEM. The other foreign stocks I'm eyeballing are TEO,TNE,TSM,AGU,BAP

Yours Truly,
Cowboy Dickrdoo

]]> Ego Tripping at the Gates of Demographic Hell tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.4225 2008-06-29T12:18:01Z 2008-06-29T12:20:03Z 2008 is the year when the US market's demographics go from good to bad. The US market's demographics will probably not start getting better again until 2020. 2010 to 2020 will be Europe's demographic hellish period and their hellish period... Dick Illingworth 2008 is the year when the US market's demographics go from good to bad. The US market's demographics will probably not start getting better again until 2020. 2010 to 2020 will be Europe's demographic hellish period and their hellish period will be more hellish than our. From 2020 to 2030 China is going to be an economic disaster. Demographically Brazil looks good for the next 20 years. Thus far this year US market is down along with most of the other markets but Brazil is up. I'm down this year so it is silly for me to be thrilled with my performance thus far this year but I am.

Every quarter all the compliant marketocracy funds are ranked and I'm looking forward to the next ranking period. According to my all the virtual and real mutual funds equal the total market and on average standard deviation bell curve reckoning my main funds are going to do well.

My Rational Exuberance guesses are:
1 Month (STDEV=2.37%) Rank: 94%
3 Month (STDEV=4.88%) Rank: 95%
6 Month (STDEV=6.83%) Rank: 87%
1 Year (STDEV=11.19%) Rank: 78%
5 Year (STDEV=41%) Rank: 96%

My Sector Trifecta guesses are:
1 Month (STDEV=2.37%) Rank: 97%
3 Month (STDEV=4.88%) Rank: 99%
6 Month (STDEV=6.83%) Rank: 98%
1 Year (STDEV=11.19%) Rank: 85%
2 Year (STDEV=17.74%) Rank: 95%

Although Mr. Kam and company haven't been ranking MOFQX my guesses are:
1 Month (STDEV=2.37%) Rank: 90%
3 Month (STDEV=4.88%) Rank: 97%
6 Month (STDEV=6.83%) Rank: 96%
1 Year (STDEV=11.19%) Rank: 79%
2 Year (STDEV=17.74%) Rank: 79%
3 Year (STDEV=27.91%) Rank: 86%

If this strategy lab Candy Mountain ETF fund was compliant my guesses are:
1 Month (STDEV=2.37%) Rank: 84%
3 Month (STDEV=4.88%) Rank: 91%

Had I put all my real and virtual monies in my mattress and taken a nap for the last year my guess are:
1 Month (STDEV=2.37%) Rank: 100%
3 Month (STDEV=4.88%) Rank: 66%
6 Month (STDEV=6.83%) Rank: 96%
1 Year (STDEV=11.19%) Rank: 92%

The next 12 years are going to be tough.

Yours Truly,

Cowboy Dickrdoo

]]> June's Rational Exuberance Updated tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.4013 2008-06-07T02:00:04Z 2008-06-07T02:02:21Z I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless if no one follows my recommendations I know a lot people do. Not much as changed from last... Dick Illingworth I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless if no one follows my recommendations I know a lot people do. Not much as changed from last month except for my Strategy Lab Fund has real name (Candy Mountain ETF Fund) and a theme song like all my other funds so please sing a long with the Beat Farmers Gone but not forgotten Country Dick Montana

One evening as the sun went down and the market fire was burning
Down the track came a hobo hiking, and he said "boys
I'm not turning "I'm headed for a land that's far away, beside the crystal fountains
"So come with me, we'll go and see the Big Rock Candy Mountains"

In the Big Rock Candy Mountains there's a land that's fair and bright
Where the hand-outs grow on bushes and you sleep out every night
Where the boxcars all are empty and the sun shines every day
On the birds and the bees and the cigarette trees
The lemonade springs where the bluebird sings
In the Big Rock Candy Mountains

In the Big Rock Candy Mountains all the caps have wooden pegs
And the bulldogs all have rubber teeth and the bears lay soft-boiled eggs
The farmer's trees are full of fruit and the barns are full of hay
Oh I'm bound to go where there ain't no snow
Where the market don't fall, the wind don't blow
In the Big Rock Candy Mountains

In the Big Rock Candy Mountains you never change your stocks
And the little streams of alcohol come a-trickling down the rocks
The brakemen have to tip their hats and the market bulls are blind
There's a lake of stew and of whiskey, too
You can paddle all around 'em in a big canoo
In the Big Rock Candy Mountains

In the Big Rock Candy Mountains the jails are made of tin
And you can walk right out again as soon as you are in
There ain't no short-handled shovels, no axes, saws or picks
I'm a-goin' to stay where you sleep all day
Where they hung the jerk that invented work
In the Big Rock Candy Mountains

I'll see you all this comin' fall in the Big Rock Candy Mountains

June's Rational Exuberance Size and Style Allocations

Bond range: 4.60% to 5.1%
Buys:
SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 19.23
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 32.8% to 44.76%

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 22.97
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 35.48% to 34.28%

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 24.55
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 13.72% to 5.24%

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 18.56
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 17.98% to 15.72%

Sells:

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 24.49
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 0%

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 22.11
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 27.61
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 19.94
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0.0%

To summarize my may rangy recommendations, if the 10 year bond rate increases significantly move out of small cap growth stocks into large cap growth stocks and if you're in range stay put. Emerging markets are getting relatively cheaper but not cheap enough to buy.

Yours Truly,

Cowboy Dickrdoo

]]> May's Rational Exuberance Updated tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.3801 2008-05-07T10:02:42Z 2008-05-07T10:05:55Z First off congratulations to Mr. Kam and company. Marketocracy Masters 100 is now a 4 star mutual fund. I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless... Dick Illingworth First off congratulations to Mr. Kam and company. Marketocracy Masters 100 is now a 4 star mutual fund.

I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless if no one follows my recommendations I know a lot people do. Unfortunately almost every time I blog I remember something important I forgot to mention in previous blogs.

I haven't been using the actual 10 year bond rates when coming up with my size and style allocations. I have been starting with the actual 10 year bond rate and then just bumping it up until I only have 4 or so boxes. From now on my monthly size and style recommendations will be ranges based upon a 10 year bond rate range.

May's Rational Exuberance Size and Style Allocations

Bond range: 4.40% to 5.4%
Buys:
SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 18.4
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 27.21% to 47.76%

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 22.25
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 33.34% to 30.59%

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 22.77
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 21.71% to 7.65%

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 17.98
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 17.64% to 13.39%

Sells:

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 24.56
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 0%

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 21.94
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 25.99
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 21.41
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0.0%

To summarize my may rangy recommendations, if the 10 year bond rate increases significantly move out of small cap growth stocks into large cap growth stocks and if you're in range stay put.

Coming up next a 3-1/2 month back check of size and style, sector and demographic recommendations and maybe a Marketocracy Master grading update but maybe almost always means no.

Yours truly,

Cowboy Dickrdoo

]]> Demographic Update tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.3716 2008-04-27T01:38:59Z 2008-04-27T01:39:58Z My international demographic fund needed some cleaning up. Here are my international allocations: Singapore (EWS) 13.57 FPE/20.45 EG 1.51 PEG Allocation: 23% South Korea (EWY) 11.12 FPE/15.32 EG 1.38 PEG Allocation: 19% Austria (EWO) 10.54 FPE/14.46 EG 1.37 PEG Allocation:... Dick Illingworth My international demographic fund needed some cleaning up. Here are my international allocations:

Singapore (EWS)
13.57 FPE/20.45 EG
1.51 PEG
Allocation: 23%

South Korea (EWY)
11.12 FPE/15.32 EG
1.38 PEG
Allocation: 19%

Austria (EWO)
10.54 FPE/14.46 EG
1.37 PEG
Allocation: 18%

Thailand (TF)
11.03 FPE/11.44 EG
1.04 PEG
Allocation: 11%

Hong Kong (EWH)
16.13 FPE/16.14 EG
1 PEG
Allocation: 10%

Germany (EWG)
11.36 FPE/10.67 EG
0.94 PEG
Allocation: 9%

Brazil (EWZ)
12.88 FPE/9.76 EG
0.76 PEG
Allocation: 6%

China (FXI)
18.87 FPE/13.65 EG
0.72 PEG
Allocation: 4%

Just like my sector allocations these international allocations are updated once every 3 or 4 months.

To summary where my CDETF fund should be at:

23% Large Cap Growth
22% Mid Cap Growth
10% Small Cap Growth
7% Developed Foreign
6% Oil and Gas Services
5% Insurance
4% Health Care Services
4% Singapore
3% Semiconductors
3% Building and Construction
3% South Korea
3% Austria
2% Thailand
2% Hong Kong
1% Germany
1% Brazil
1% China

Yours Truly

Cowboy Dickrdoo

]]> Mid-April's Rational Exuberance Size and Style Allocations tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.3703 2008-04-25T21:31:35Z 2008-04-25T21:32:32Z In my March/April update I talked a little bit about how my PE values aren't as good as they used to be. I just visited Standard and Poors web site and found the fourth quarter update PE values which changed... Dick Illingworth In my March/April update I talked a little bit about how my PE values aren't as good as they used to be. I just visited Standard and Poors web site and found the fourth quarter update PE values which changed my allocation numbers.

Buys:
SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 18.13
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 37.38% (an add of about 10%)

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 21.89
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 35.22% (a deduct of about 7%)

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 22.54
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 15.89% (little change)

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 18.76
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 11.50% (around a 2.5% deduct)

Sells:

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 24.12
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 0%

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 21.47
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 25.75
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 22.86
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0.0%

Coming up International Demographic update and May's updated rational exuberance numbers around the 10th.

Thank you

Cowboy Dickrdoo

]]> Sector Update tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.3634 2008-04-19T16:44:01Z 2008-04-19T16:52:18Z My Barney Google Sector Trifecta Fund needed to be cleaned up so my sector update came a little early and it's back to being silly. Barney Google, with the goo-goo-goo-ga-ly eyes. Barney Google bet his horses would win the trifecta... Dick Illingworth My Barney Google Sector Trifecta Fund needed to be cleaned up so my sector update came a little early and it's back to being silly.

Barney Google, with the goo-goo-goo-ga-ly eyes. Barney Google bet his horses would win the trifecta prize. When the horses ran that day, Barney's horses ran the other way. Barney Google, with the goo-goo-goo-ga-lay eyes had a wife three times his size. When Barney Google's horses ran the other way, she divorced him. Now Barney Google with the goo-goo-goo-ga-lay eyes lives with his horses

The Sector Contestants are:

Oil & Gas Service (PXJ) "Pipeline": 1.72 PEG
Insurance (PIC) " Accidental Collision ": 1.37 PEG
Financials (PFI) "Bull nuts": 1.21 PEG
Energy (PXI) "Old Jed": 1.19 PEG
Energy Exploration & Production (PXE) "Drillbit": 1.07 PEG
Healthcare Services (PTJ) "Nurse Ratched": 1.03 PEG
Building & Construction (PKB) "Where's Bob": 1.03 PEG
Semiconductors (PSI) "Flying Saucer": 1.03 PEG
Technology (PTF) "Moby Dolby ": 0.97 PEG
Hardware & Consumer Electronics (PHW) "Ear plug": 0.97 PEG
Basic Materials (PYZ) "Silverback": 0.97 PEG
Retail (PMR) "Paris Clinton": 0.96 PEG
Consumer Discretionary (PEZ) "Hand Bag": 0.95 PEG
Industrials (PRN) "Boilermaker": 0.94 PEG
Pharmaceuticals (PJP) "Pill Popper": 0.92 PEG
Healthcare (PTH) "St. Lucrative": 0.91 PEG
Networking (PXQ) "Ready Serve": 0.89 PEG
Software (PSJ) "User Friendly": 0.88 PEG
The market to Beat (Total Market): 0.87 PEG
Leisure & Entertainment (PEJ) "Love Boat": 0.86 PEG
Media (PBS) "Katie's Calf": 0.82 PEG
Telecommunications & Wireless (PTE) "Social Lion": 0.82 PEG
Utilities (PUI) "Three Miler": 0.74 PEG
Biotechnology & Genome (PBE) "Bob New Heart": 0.71 PEG
Banking (PJB) "Overdraft": 0.68 PEG
Consumer Staples (PSL) "Bung Wad": 0.65 PEG
Food & Beverage (PBJ) "Six Pack": 0.59 PEG

I'm going to bet 27% on Pipeline to win. Bet 22% on Accidental Collision to place. Bet 17% apiece on Nurse Ratched, Where's Bob, and Flying Saucer. In other words I think Oil & Gas Services, Insurance, Health Services, Building & Construction and Semiconductors are the best sectors to over weight.

My demographic kid fund also need to be clean up as well so my international demographic recommendations are on their way.

Yours Truly,

Cowboy Dickrdoo

]]> Plugging MOFQX tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.3593 2008-04-15T23:42:06Z 2008-04-15T23:44:49Z It not tax day it's Marketocracy Masters 100 day. It's been three years since MOFQX made the 250 stocks in lieu of 1000 stocks change and revamped it's M100 selection process and/or criteria and/or weighting. Since that time MOFQX has... Dick Illingworth It not tax day it's Marketocracy Masters 100 day. It's been three years since MOFQX made the 250 stocks in lieu of 1000 stocks change and revamped it's M100 selection process and/or criteria and/or weighting. Since that time MOFQX has done very well.

From April 15, 2005 to April 15, 2008 without taking fees in consideration:

MOFQX +47.90%
Mid-Cap Stocks +33.08%
Total Market +27.48%
Large Cap Stock +26.58%
Small Cap Stocks +22.74%


MOFQX is general fund that is categorized as a Mid Cap Blend Fund and over past three years MOFQX has beaten the total market on 3.58% annualized basis taking fee into consideration over the past 3 years. The Marketocracy Masters 100 Fund has beat around 90% of it's Mid-Cap Blend Fund competitors and probably about 95% or more of all the mutual funds. The present M100 has a prior 3 year average of 97.7% with a standard deviation of 4.5% so if the MOFQX beats 95% of all the other funds over the next 3 years that will only be par for the course. More importantly there is a 99% chance that MOFQX out perform 84% of the other mutual funds. Par for the course for other mutual funds is 50% and there is 1% chance that another mutual fund will under perform 99% of the other mutual funds. MOFQX performance over the past three years was no fluke and nor will it next 3 years performance be one.

At present Marketocracy Masters 100 is only a 3 star fund but in the next few years it going to be a 5 star fund worth buying when it was only a 3 star fund. The intuitive odds are stacked in MOFQX's favor.

Yours Truly,

Cowboy Dickrdoo

Coming up next Sector and International Demographic allocations May first

]]> March and April Allocation Updates tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.3553 2008-04-11T09:35:58Z 2008-04-11T09:40:06Z March's Rational Exuberance Updated I have PE values but I don't know how or why and I wish they were better. In my previous post I mentioned Barra.com. Unfortunately I haven't visited that site in couple years. I may... Dick Illingworth
March's Rational Exuberance Updated

I have PE values but I don't know how or why and I wish they were better. In my previous post I mentioned Barra.com. Unfortunately I haven't visited that site in couple years. I may not get every thing right but from what I understand a few years ago Citigroup took over the Standard and Poors growth and value indexes, created 6 new indexes and changed the simple higher or lower than average book value criteria of what is a growth and value. It was like a bunch of clueless knuckleheads just crap all over Cowboy Dickrdoo's good thing and made 20 years of data suspect. For about a year or so I could not find monthly updates and none too happy about that the change in value/growth criteria. I was lost at sea and no one was going to pay for it!

About a year ago I found my S&P growth and value at www2.standardandpoors.com but not in the wonderful barra.com monthly updated form. The overall large, mid, and small cap index PE values are updated monthly. Whereas the value and growth index PE values are updated quarterly usually about 6 months behind. For example the last value and growth PE values update was 3rd quarter of 2007 or 9/30/07. This was a big improvement over being lost at sea but it's just not as good as it was. My monthly PE values are guesses especially the foreign and emerging PE values. I compare the overall (75% IVV, 18% IJH, 7% IJR) Morningstar forward PE value to the EEM and EFA Morningstar forward PE value and translate into S&P PE values that aren't the same as previous year earnings. I have PE values but I don't know how or why and I just try my best to get them right.

Buys:

SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 18.28
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 21.34%

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 18.98
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 37.1%

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 19.37
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 24.26%

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 16.31
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 17.42%

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 17.29
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 2.47%


Sells:
SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 18.16
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 20.98
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 18.56
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0.0%

April's Rational Exuberance Updated

I outlined my strategies in my original post. This is just an allocation update. More than usual has change.

April's Rational Exuberance Size and Style Allocations

Buys:
SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 21..26
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 27.21% (an add of about 7%)

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 21,62
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 42.94% (an add of about 5.5%)

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 22.62
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 14.86% (around a 10% deduct)

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 18.26
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 14.97% (around a 2.5% deduct)

Sells:

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 19.91
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 0%

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 20.19
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 24.7
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 22.09
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0.0%

Coming up May 1 is my sector allocations and demographic updates and I might plug the MOFQX April 15


]]> Strategy and Blog Outline tag:www.investorplaceblogs.com,2008:/users/cowboy_dickrdoo//2054.3007 2008-02-26T01:14:15Z 2008-04-25T20:54:24Z Hopefully if someone reads this they will find my strategies intuitive and practical in spite of how silly my related Marketocracy Funds are. Otherwise just trying to explain what I doing clarifies my thoughts and by utitlizing a number of... Dick Illingworth Hopefully if someone reads this they will find my strategies intuitive and practical in spite of how silly my related Marketocracy Funds are. Otherwise just trying to explain what I doing clarifies my thoughts and by utitlizing a number of strategies that require monthly and/or tri-monthly updates I'll have something to write about in the future.

About 10 years ago I came I visited Barra.com and came up with what I call my rational exuberance investment strategy. About that time the stock market was starting to become over valued and Chairman Greenspan came up with the wonderful irrational exuberance phrase. People were writing about the method that the Federal Reserve uses to determine whether the stock market was under or over valued. People also were writing about the differences between SP500 rates of return when the stock market is more expensive than the Federal Reserve model and less expensive.

The Federal Reserve evaluation equation goes something like this: Average SP500 PE value is equal to .94 times (1 plus the estimated earnings growth %) divided by the (10 year bond rate minus 0.48%). At the time I was able to download for free 20 years or so of SP500 monthly PE values, estimated earning growth, actual earning growth and monthly returns. Afterwards it to off to the Federal Reverse's web site to get 20 years or so of 10 year bond rates. The Federal Reserve evaluation equation checked out and so did the SP500 20% versus 2% rate of return difference. Unfortunately going into and out of SP500 and bonds did not yield significant gains over the overall market but along with the SP500 historical information I also downloaded SP500 Growth, SP500 Value, SP400 Growth, SP400 Value, SP600 Growth, SP600 Value information. I then came up with an average evaluation equation for each replacing estimated earning growth with average actual earning growth. Then by trial and error I started to look at standard deviations away from average PE values and rates of return and allocations. Back checking I would periodically be completely out of the stock market and completely into the bond market so I started to look at average1 year,2 year, 5 year, 7 year, etc. bond rates and standard deviations. Then I thought about developed foreign market and emerging markets and decided their average PE value are on average 90% and 70% of the SP500 average PE value.

My rational exuberance strategy works like this I look at the above mentioned PE values and bond rates versus there averages and distance from average and try to allocation wisely and if I allocate relatively wisely I should and have beaten the overall stock market by 5 to 6% annually. Never the less, I'm always trying to allocate more wisely and looking for more buckets to add to by 8 stock buckets and 2 bond buckets. For example short SP ETFs but unfortunately they did not work for me.

My rational exuberance strategy can be utilized with ETFs, index funds, open or closed actively managed funds or individual stocks and bonds. With my real monies I do it with ETFs and mutual funds. With individual stocks I do it for 5 years with my Marketocracy Cowboy Dickrdoo Rational Exuberance Fund (CDREX).

63% of my strategy lab open's CDETF fund is allocated to utilizing the rational exuberance strategy. At the present time (2/17/08) I think the right size and style allocation is 28%(17%) mid-cap growth, 22%(14%) small cap growth, 28%(17%) large cap growth, 18%(11%) developed foreign, and 6%(4%) large cap value. I try to update the model and check allocations at least once a month. The following is a "Rational Exuberance Size and Style" table I will update once a month about 10 days in.

Buys:

SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 18.74
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 27.49%

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 21.16
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 27.34%

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 20.12
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 21.5%

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 16.36
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 17.42%

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 15.91
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 5.9%

Sells:

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 18.81
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 22.60
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 19.27
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0.0%

Market Est. 3 yr Average Annual Return: 6.03%
Strategy Est. 3 yr Average Annual Return: 7.90%

Morningstar X-Ray Comparison to Market
Rational Exuberance: 14.17 FPE, 13.42% EG, 1.27% Yield
Market:13.58 FPE,11.49% EG, 1.84% Yield

1.87% doesn't sound like much but I buying 16-17% of the market. Usually that is a lower number and/or the strategy's estimate average annual return is higher. Best of all 35% of time I'm in bonds and it's fun to be in boring bonds when the market is crashing. Better than anything else my rational exuberance strategy keeps me out of big trouble and helps me stay the course. Things usually work out well over 6 months to 3 years.

Now it's on the next 16%. Here in the states boomers are starting to retire. People who are between the ages of 28 to 55 are more productive than people below the ages of 28 and people above the ages of 55. When a country starts have more productive people in comparison to relative unproductive people can be predicted many years in advance. About 8 years ago Harry S. Dent wrote a book called The Roaring 2000s Investor. Within his book there were demographic charts for all sort of countries. It seems to me until the year 2010 Brazil, China, Germany, Austria, Singapore, Hong Kong, South Korea, and Thailand have the best more and more productive people relative to less and less unproductive people curves. From 2010 to 2020 Ireland, Turkey, South Korea, China, Brazil, and Israel are the prize winners. From 2020 to 2025: Ireland Turkey Brazil and Israel are the places to be From 2025 to 2030:Turkey, Brazil, and Israel still will be winners. 2030 and beyond I won't have to care. 16% of my strategy lab open's CDETF will be devote to Brazil, China, Germany, Austria, Singapore, Hong Kong, South Korea, and Thailand matching my Marketocracy International Demographic Kid Fund (Clt45). The following is a table for international demographically allocating:

Buys:

Austria (EWO)
FPE: 10.86
5YR EG: 17.54%
PEG: 1.62
Allocation: 5%

South Korea (EWY)
FPE: 10.76
5YR EG: 14.82%
PEG: 1.38
Allocation: 3%

Germany (EWG)
FPE: 11.91
5YR EG: 11.30%
PEG: 0.95
Allocation: 3%

China (FXI)
FPE: 17.88
5YR EG: 16.77%
PEG: 0.94
Allocation: 2.5%

Singapore (EWS)
FPE: 13.2
5YR EG: 12.92%
PEG: 0.98
Allocation: 2.5%

For Comparison:

Foreign (EFA)
FPE: 12.35
5YR EG: 12.35%
PEG: 1.00
Allocation: 76%

Emerging (EEM)
FPE: 13.97
5YR EG: 18.47%
PEG: 1.32
Allocation: 24%

Strategy Est. 3 yr Average Annual Return: 11.91%
International Est. 3 yr Average Annual Return: 3.21%

Morningstar X-Ray Comparison to Market
International Demographics: 11.34 FPE, 15.02% EG, 2.02% Yield
Market:13.58 FPE,11.49% EG, 1.84% Yield

With 79% out of the way it on to the last 21%. When I first discovered Marketocracy, Mr. Kam and company where advocating people create funds that focus on sectors and some sectors have done extremely well during the last 5 years but that doesn't mean their going to do well the next five years. Instead of creating sole sector fund I created a sector trifecta fund that I update and clean up every 3 months or so. I Morningstar x-ray all the Powershares ETFs that focus on sectors dividing the 5 year estimate earning growth by the forward PE value (My upside down way of pegging). The top sector with the highest PEG number gets 10 stock picks. The next 3 to 5 top sectors get proportionally few picks until the number picks exceeds 30. 6% of my CDETF fund is focused upon Pharmaceuticals. Another 5% is focused upon Oil Services, 4% Insurance, 3% Semiconductors, and 3% Building & Constructing. The following is summary table:

Sector and Morningstar X-Ray
Matching (ETF) FPE 5 yr EG PEG Allocation
Pharma (PJP) 6.29 12.75% 2.03 6.10%
Oi&Gas (PXJ) 10.22 17.48% 1.71 5.26%
Insurance(PIC) 8.19 10.75% 1.31 4.30%
Semis(PSI) 16.48 15.99% 0.97 2.72%
Bldg&Cons. (PKB) 15.07 14.84% 0.98 2.72%
Sector Trifecta 8.97 14.23% 1.59 21%
Market 13.54 11.38% 0.84 100%

Strategy Est. 3 yr Average Annual Return 13.55%Market Est. 3 yr Average Annual Return 6.03%

It think over the next 6 months my CDETF will be up 4.75% and beat 75% of the other Strategy Open Funds assume the market is up 2.97% or so.

Part of the reason I choose to ETF with my strategy open fund is because for 5 years I have been selling most every Marketocracy stock pick when if it goes down 10% or up 30%. As a consequence I know only 20% of my stock picks are any good. 25% are bad and the other 55% really don't do much of anything yet I think the 10% down and out is every good investment rule. If you lose 10% you only need a 11% gain to make it back to even. If you lose 50% you need a 100% gain to make it back to even. I briefly touched upon my definition of PEG and I think it PEGging works but primary reason I do it when managing my Marketocracy funds is because it gives me a way to systemically go through a list of stocks. Never the less I think the 10% rule and pegging helps me about 2% annually.

Lastly, I have owned MOFQX for close to 4 years now because almost from the get go I thought Marketocracy was intuitive great idea and over the last 3 years MOFQX has done very well and it will continue to do very well. The 2004-2005 hiccup was a result of not having long enough track records. Now many more of the funds are 5 years or older and Mr, Kam and company have got a lot better at finding the cream of the crop. Never the less I sincerely think Mr. Kam and company should change the way they hand out stars and start getting rid of funds that are not be actively managed.

At present the only stars that might mean anything are the M100 stars. Generally speaking the green top 25% star and top 100 blue stars are meaningless. If someone has created a bunch of funds their going to have a lot green stars and blue stars yet many of the funds suck or haven't been looked at in years. Mr. Kam and company should first have managers choose the rank their funds in terms of Flagship#1, Flagship#2, Flagship#3 and give one to five stars for each selection and longevity ranking. If a fund has between 6-12 rankings it a freshman fund. If a fund has 12-24 rankings it is a sophomore fund and the last 12 rankings compete against all the freshman funds in terms of average ranking. If a fund has 24-36 rankings it is a junior fund and the last 12 rankings compete against all the freshman funds, the last 24 rankings compete against all the sophomore funds in terms of average ranking and so on. 36-48 rankings senior. 48-72 rankings and an average ranking in the 3 stars range graduate. If fund fails to be in the 3 star range have after 48 or more rankings then if the fund manages to get it's previous more than 48 most previous average in the 3 star range then the fund graduates. 72 to 96 rankings and average ranking in the 4 star range is a top investor with the same graduate to top investor arrangement as the senior to graduate arrangement. 96 or more rankings and average ranking in the 5 star range is a Marketocracy master. Only a select few exceptional investor can succeed at keeping 83% or better average over a 5 and a half year period. Instead of listing out the top funds over 1 month,3 months, etc.. The top freshman, sophomore, etc. funds would be listed out and comeback kids should be highlighted as well. It seems to me Marketocracy is not giving people who comes up with a strategy that don't work well at first but wisely sticks to it because it is a good strategy the credit they deserve. An average ranking of 83% or more is in the 5 star range. 66-83% is the 4 star range. 49-66% is the 3 star range. 32-49% is the 2 star range. 15-32% is the 1 star range. For example my Flagship #1 fund would be CDREX, #2 would be BGSTX, and #3 would be a toss up between ICCSC, UNOME, CLT45. My money managing credentials would look like this:

TOP 4 STARS (91 rankings, 71% average ranking CDREX)
JUN 4 STARS (29 rankings, 70% average ranking BGSTX)
FRSH 4 STARS (8 rankings, 79% average ranking CLT45)
Or
GRAD 3 STARS (82 rankings, 57% average ranking ICCSC)
Or
SEN 3 STARS (40 rankings, 57% average ranking UNOME)

Top 100 freshman, sophomore, etc. averages for CDREX would be as follows:

Freshman: 55.63% 3 Stars
Sophomore 61.19% 3 Stars
Junior 63.89% 3 Stars
Senior 64.89% 3 Stars
Graduate 67.74% 4 Stars
Top 71.37% 4 Stars

For comparison Top 100 freshman, sophomore etc. averages for the masterful athompson's TPSNX would be as follows:

Freshman: 59.92% 3 Stars
Sophomore 72.96% 4 Stars
Junior 79.57% 4 Stars
Senior 79.87% 4 Stars
Graduate 83.09% 5 Stars
Top 84.93% 5 Stars
Master 88.98% 5 Stars

Along with athompson, jerrypettit and rmcduff are exceptional investors

Now you know most everything I think I know about investing wisely. My other blog posts will be table updates and/or stock picks that will replace part of the ETF monies and/or stock lists and/or stock pickers from other Marketocracy members with proven records even though stealing stock picks haven't really worked for me. If you got this far down thank you for reading my dribble.

Yours truly

Cowboy Dickrdoo

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