Scot's SWAG Picks

Round 2

2008-03-01T00:05:24Z

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 ...

2007-10-03T02:55:30Z

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 ...

2007-09-27T19:03:08Z

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) ...

2007-09-19T01:55:06Z

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 ...

2007-09-11T18:33:36Z

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 ...

2007-09-05T02:37:39Z

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.

On the upswing ...

2007-08-27T23:48:13Z

Well it does indeed look as if we found the bottom [for now] last week and can expect a few weeks of upward movement in my portfolio.
I am seeing good success with many of the picks that I rode throught the past couple of weeks with a half a dozen above 10% return and 10 more in positive territory.
The close of last week brought me into the top 100 on the leader board, I hope that I can manage to stay there.
I have closed my positions on a few of the poorer performers (worse than -5%) that were showing less than encouraging trends (CDE, MNG, SIRI) I also divested AAPL last week as my trend data indicates they can expect a short term down swing, target $120.
I had an investment in CAVM which has shown a 16% return but several factors in my analysis indicate that they are losing strength and will see a reversal on some of this, target $23.50.
A not surprising recent skyrocket is VMW which I have riden to a 29% gain, and I see this one continuing, indeed I've added to my position on this one to make it the largest single position at 10% of my portfolio.
The 3:1 split on RIMM did wonders for my balance and OII, STAR, BBI & NUAN continue to be outperforms for me.
I have added positions in MTW, FMC & JCI providing some diversity in place of the positions I have closed, these all are looking and have splits in the near future.
I will continue to ride the core of my portfolio, keeping in the neighborhood of 90% invested and watch for opportunities to achieve the aggressive growth I've designed this portfolio for.
I'll be on the road this week ... we'll see how things look this time next week.

Where is the bottom ...

2007-08-13T23:26:09Z

This has to be the question of the week (month?) ...
The temptation as a beginner is to dump the poor performers and reinvest in either new picks or the ones that are doing well. But I still believe that this downward plunge will end soon and my research for the issues that I have selected still shows that they will make money for the mid to long term so I am not making any changes as we move into week 3.
I have chosen 27 securities to populate my portfolio currently with a goal of riding in the neighborhood of 25 based on some theories I have been working on for year. I use many different tools to pick the stocks in my portfolio, including looking for winners in the CAPS portfolios (particularly MSN CAPS), using S&P and Reuters research reports and utilizing my own knowledge in the technology and energy sectors.
While I have taken some losses over the past week my portfolio is still leading the S&P and I have seen the light above $10 NAV a couple of times in the past couple of weeks. I am striving to maintain compliance at all times and have almost 90% invested (11% cash as of today) and have maintained that level since the start.
Some of the less known items that my research dug up that have done well are CAVM, STAR & NUAN in the tech sector and OII in the energy sector. In addition my belief that BBI would begin to recover from its price war with NFLX due to some internal strategy changes seems to be playing out, I believe that NFLX will make the turn and start up before the week ends.
I look at many diferent aspects in trending a stock for when to buy/sell, looking at 6 month history using a composite of 50/100/200 day SMA, RSI, a 20 day 8% SMA Envelope, Volume by Price analysis and Bolinger Bands over 20 days using 2 deviations.
AS my day job takes up most of my time I am happy with my results so far (relatively speaking) even though I am down and I still believe that my portfolio will be on the upside by this time next week, this volatility should not be able to maintain, the 'credit crunch' will evaporate and I believe that we will see an extended gradual climb after a brief radical upswing so don't jump ship on your winners too soon and stick with your picks, if they are based on sound research they will ride out the storm.
See you again next week ...

As the SLO begins ...

2007-08-06T18:15:17Z

Focusing on my long term fund SCET1, I've began with the belief that the downturn we were going through was to be short-lived. I bought heavily to take advantage of the climb back up.
While I have not changed my belief, I have taken more of a beating right off the bat than I had hoped for.
I have made some sector allocation adjustments, but I have not yet seen the indicators that this downturn is more than temporary. After the FED news this week I believe that we will be headed out of this dip.
A couple of notes of interest, I believe that the BBI/NFLX pricewar is about to end based on research, analyst discussions and some recent changes by BBI so I have purchased a small position in both because I see both rebounding this/next quarter as thy strive to keep shareholders happy.
I think that Technology and Energy will be the big sectors for the next 2-4 quarters and my positions reflect this. I have positions in Mining, Finance and Health for stability in the belief that no matter how bad things get (just in case my current view is incorrect) these will help offset other movement in the wrong direction.
While I have a not insignificant position Large Cap issues I have established the majority of my positions in the smaller issues and though not without risk I have focused on Growth/Blend to make this a more aggresive portfolio.
We'll see how things look this time next week.

Where to begin ...

2007-07-24T01:28:16Z

I am going to try starting from two very diverse directions.

I will create one fund that should be a steady money maker for the long term. A focus in technology, energy & materials with a spread of size and style, I will look to mix stability with some aggressive 'SWAGs' to manage a fund that will run well ahead of the curve, the results of success will more than compensate for the moderate risk.

My second venture will contain significantly more risk and volatility, an almost entirely technology IPO based fund. Careful selection of IPOs in the areas of new and evolving technology which have successfully negotiated at least their 1st quarter in the public sector will form the core of this fund. With careful management to weed out those which do not meet the set standard and an ever watchful eye for new propects to expand the fund base I believe that this can be quite a fruitful venture over the long term.

Scot S

Why am I here?

2007-07-24T01:22:03Z

Like most people, I think that I can outguess the market.
I've played around with some small investments over the past 5-10 years (and managed to make some money) and run any number of 'simulated' portfolios with mostly positive results.
Marketocracy's offer to create and manage a fund with nearly realistic requirements, management, fees, etc, seemed like the perfect opportunity to see whether I've just been fooling myself or if I can actually accomplish something on a scale that is large enough to see real results.
I am looking forward to spending some time refining my knowledge and hopefully sharing some positive insights and results with others in this community.

Scot S