Scot's SWAG Picks

Round 2

Rating: 2.50 (2 votes) Vote:

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Due to a family emergency my portfolio carried over from the first round has carried on its own thus far in round 2. Considering the status of the market, the fact that my portfolio is positive after basically 5 weeks untouched definitely provides support for the approach of riding through the volatility. The positions I hold still meet the criteria used to select them so I will continue forward with only minor adjustments to keep individual issues within the needed parameters.

Lessons learned so far ...

Rating: 1.78 (18 votes) Vote:

Being new at this 'game', the opportunity provided here is awesome. I would love to see more of the blogs explaining the whys and whens of timing and selection
Initially I poppulated my portfolio with a number of the more stable stocks (i.e., XOM, INTC, PRU, AAPL, etc.) to better survive the roller coaster ride of August.
I soon realized that this approach was not going to get the kind of returns needed to be even in the upper half of this event as week 3 ended and I was still ranked below 1500. So I began unloading the majority of these and buying into higher risk growth stocks, looking for attractive IPOs with a good baseline and fundamentals and watching the split calendar for opportunities.
Thanks to some well researched choices, perhaps a bit of luck and of course the FED, week 4 moved me into the top 100 (where I've managed to stay, though barely).
I find it amazing the level of talent involved in this event, my portfolio is up 11.4% since we began (after being down over 6% mid August), beating the S&P by over 6.7% and yet that is barely enough to stay in the top 100. My congratulations to all on their efforts, I've reviewed a significant number of the top portfolios and the variety of approaches is mind boggling.
Well I've hopefully managed to learn a few thigs along the way so far.

1. Mindset - I started this with the same mindset I have used for my own meager investments and a few 'paper' portfolios I have experimented with, namely thinking long term and low risk, not a strategy that would skyrocket me to the top of this group, realizing this I have shifted to a more aggressive view with significantly higher risk. I have tried to balance the high risk with diversity both in sector and style in the belief that most of the time large setbacks would be limited to one or two related sectors.

2. Timing - I started my move into more aggressive positions with an initial sell point of 50% at 10% and final sell off at 15% gain, reviewing the my timing and tracking the after sell price change demonstrated that I was being too conservative and I have adjusted my sell point to 75% at 30% gain and then monitor the indicators on the remaining 25% with no fixed sell point. This is serving well and I do keep the initial sell point flexible to take advantage of momentum. What I need to work on here is when to get out of the losers, more on that as I figure it out.

3. Splits - I have reconfirmed for myself that properly timing entry and exit on splits can be quite profitable, though due to Marketocracy's data feed I have to accept a 24-48 hour dip in my stats until they catch up (I'll have to make sure I have no splits effective right at the close of the competition :)).

4. Time - To do this well requires quite an investment of time, monitoring, tracking, researching, planning, etc., quite a challenge with a 'day job' that requires a few hours of my time every day. Well, sleep is overrated anyway.

5. WATCH THE NEWS - I took a beating becaue I missed a little news item about NetBank getting shut down on 9/28. I had bought a large position in the hopes that they would find a deal partner to replace Everbank, bought 250K shares at an effective cost of 0.15, by the time I figured out what was happening on Monday and started trying to unload them (a low volume stock) my sell price is looking like about a 0.03 avg. Hopefully won't make that mistake again.

Well good luck to all, I'll be back later this week to address some new changes in my portfolio and discuss the results of this weeks 'split'fest.
Keep up the good work and please share with us how you are doing it.

The Market is almost back to where it was in July ... Time To Get More Aggressive ...

Rating: 1.75 (16 votes) Vote:

The markets continue there climbing trend with all of the major indexes approaching their July peaks and all of the indicators I am monitoring indicate that this will continue through the next quarter. I had predicted the S&P would be back above 1500 by the end of August, I missed by a few weeks, I still stand by my prediction that it will reach and maintain 1600 by year end.
In light of this I have made a few more changes this week.
I sold off my position in VLO, there seems to be mixed reviews out there on this one but my research shows that it is due for some downside because of loss of momentum, change in sector movement and some internal changes, though up for the year (34%) it is down for the quarter, I expect these will be only short term adjustments with the downside target at or near $55.
I've increased my holdings in OII back to where they were due to continued improvement with this issue, (up 83% YTD, >8% MTD) the Support Services industry continues strong and will show steady growth through the end of the year. My target on this one is in the neighborhood of $85.
I am revisiting CAVM, I sold this off last month after a nice 15% gain thinking that the semiconductor segment was going to flatten out for a while, some recent new innovations in the tech industry will now see this segment growing significantly over the next 6-12 months, I'm targeting this one at $60.
I've also added BBL to my postfolio as it is up over 85% YTD and along with BHP continues to run strong in a very strong sector, and I don't see this changing anytime soon. This one will I suspect have a moving target, but for now I'm looking for both of these to hit $90.
Initially I had planned to maintain 25-30 positions in my portfolio, due to time constraints from my 'day job' which have made it a challenge to monitor the health of this many issues I am looking at reducing that target to 20, in the belief that this will maintain enough sector/style/industry diversity to ensure stability. Toward achieving this goal I am currently reviewing my positions looking for the most advantageous places to make the reductions.
The upcoming week will also demonstrate the results of my split chasing theory with four of my holdings conducting splits between 9/28-10/3 (NOV 2:1, SLP 2:1, JCI 3:1, TAP 2:1) I have made significant profits on picking the right splits in my real portfolio and believe that this will pay off here also.
Good trading to all, be back next week.

Refiing my tactics (refocus on aggressive growth) ...

Rating: 1.00 (5 votes) Vote:

While my portfolio was making money, it was not performing at the level I am striving for so after my last blog, I was doing some analysis on what is working and what is not and where I think things are going.
I sold off a couple of the 'solid' issues (INTC/MSFT) I was holding large positions in since though they were making money the returns were less than 5%, getting rid of Microsoft turned out to be good timing since right afte that the EU case results were announced.
I also significantly reduced my holdings in several other large and mid cap issues, too many changes to detail here.
This provided the liquidity to pursue some more aggressive directions. I purchased positions in several more pending splits (CTSH/SLP/TAP/JBX) and will look to either sell at the run up prior to the split or on the rise after the split as these are solid companies.
In addition I am establishing a large position in NTBK (target 250,000 shares) in anticipation of them finding a compatible partnership to meet regulators requirements that they find a partner for there retail banking segment. In the event this does not work out the exposure is only in the neighborhood of $20K, and the potential upside on 250K shares with the current price at $0.082 is huge. It will probavbly take a few months to determine whether this is a good gamble or not but from what I can find out through research their chance at success is pretty solid.
The end result of all of the changes seems to be that with the exception of NTBK I have positive returns on the other 24 items in my portfolio. I'll be watching their performance and looking for other opportunities like the NTBK deal, currently researching MNTEF & TELVQ.

Continuing on my path ...

Rating: 1.33 (6 votes) Vote:

As my portfolio continues to gain value at a rate greater than the markets and many of the participants here (as evidenced by the change in rank) I do not see any major changes this week.
I have taken some profits on of my high climbers (VMW) due to concern that it may top out, though it still is almost 4% of my portfolio.
I've gained significantly on another split (MTW 2:1) and all indications are that it will run up a bit before it levels off. I am watching three more upcoming splits (JCI 3:1, NOV 2:1, FMC 2:1) and they are looking strong.
I am still holding the majority of my issues in the Tech sector (38%) with large holdings in Consumer Discretionary (25%), Energy (19%) and Materials (11%) and see no reason to change this at present as all of my research and analysis indicates these will remain productive sectors.
I am seeing continued strength with VMW/BBI/FTI/OII above 20% return and OII at almost 30% though I still have some concern over VMW and reduced my position by 50%. For 6 month targets I have BBI at $10 and OII at 80$ for my high performers. There are an additional 5 issues in the 10+% range NUAN/SCUR/CGV/XMSR/RIMM worth watching, I expect NUAN to continue its steady climb, XMSR is recovering as things settle with SIRI and both will continue to climb and RIMM I expect to make a move in the next 3-6 months as it comes out with new products/services aimed at iPhone competitiion.
The entire middle third of my portfolio is performing at 5+% and as a result my portfolio as a whole is up more than 5% against the S&P for this quarter so far.
As always I am out looking for new technology companies establishing a solid track record and having sound fundamentals, in addition I am looking at possibly addiing ADBE & YHOO for stability and watching TAP & JBX with upcoming splits.
Good luck this week.

Learning on the fly ...

Rating: 0.60 (5 votes) Vote:

As we move into another week I am making some more changes to clean out some of the poor performers, those that are not coming back up as the market does. In addition I have reduced my positions on some of the moneymakers which I think are topping out or that will probably not weather 'September' well. Feel free to review the changes in my portfolio for ideas.
I still believe that the technology sector is where the big money is to be made, though I am seeing strong signs in the materisl:mining sector. My success continues as I now have a couple of positions which are exceeding 20% return, three tech issues in the 15% neighborhood (NUAN/STAR/ELON) another 5 items at 10% plus.
It seems I jumped ship a bit early on CAVM & AAPL as both climbed again this week after I sold, I'm going to stick with the thought that both are due to drop according to my trend data and see if my research will be validated.
I am looking at reducing my positions on my weakest couple of items (LPL/UMC) though not sure yet as both show good potential though I am down 7% on those two.
My portfolio value as of today is showing a bit light on the site as the FTI split has not yet posted even though the new price is there, my true NAV is about 0.13 higher.
Had a fairly weak day today making only about $10K.
VMW is making me a bit nervous, all research says that it should keep climbing and yet it took a beating today, I am going to ride it out for now.
I'll see how a couple of changes tomorrow including the addition of NOV stand up to the volatility.
Have a good week, good luck (or good research?) ... time will tell.