Vad's Best Ideas

"All happy families are alike, all the unhappy families are unhappy in their own way"

You might recognize this famous first sentence from a novel by Leo Tolstoy and ask how is it related to the SLO challenge blog? The answer is simple- I honestly believe that to be a successful investor you have to be more than just a PhD or a freshly minted MBA with a great looking resume. Being a truly great stock picker requires as much commitment as a successful marriage, it required recognition that no strategy is perfect at all times, it also requires ability to acknowledge and correct mistakes. Being intelligent is equally important to understanding that you will never be perfect. You know it is easy to claim that one is a great investor based on one particular lucky pick over an X period of time. We all know 75% of so called "great" fund managers can't even beat passive investment over longer period of time. I wonder if this is simply because most of them are claiming to be "different" and "special" while in reality most of them are missing at least one of the key ingredients for success.

I have a background that should theoretically one day make me a great portfolio manager- heavy math/economics background, double finance/accounting majors, all three CFA exams passed within 18 months, job related to valuation and risk tolerance that allows me to sleep well with my entire portfolio in few penny stocks.But I am still learning to become more consistent and tend to make common mistakes such as trading too frequently, taking profits too early and sticking with losers for too long. However as results from the last 5 years in Marketocracy and in this SLO contest show I am on the right track.

Last week I have made some moves that might have puzzled anyone who followed my portfolio. Even though at the beginning of the week I stated my intent to stick with safer bets for the remainder of the contest, after seeing both NFI and IMB sold off for three days in row I could not resist jumping back in the sub prime game. The good thing so far I've been correct again- even though DOW has sold off 250 points my portfolio has actually went up again, with most sub prime players going down NFI has bucked the trend and went up 8%...

Hopefully my current first position in SLO ranking will hold up all the way to December. I am willing to bet that a Top 5 finish will require no more than a 20% return as I am currently in the mild Bear camp. The goal for next week is to take some profits on both IMB and NFI assuming my scenario of Fed/Rate cut related event occurs.

Anyway thanks for reading and trade safe,
Vad

P.S. I will post my take on how one can benefit from Fed related frenzy in the next 24 hours

Comments: View Comments |  Saturday September 8, 2007