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re: Who wants to put the combined MT heads together and make some $?

Posted on 1/3/13 at 10:40 am to
Posted by Doc Fenton
New York, NY
Member since Feb 2007
52698 posts
Posted on 1/3/13 at 10:40 am to
Okay, let me be serious now.

I've never really been a fan of stock clubs or competitions, because they seem to go completely against the grain of what value investing (in the tradition of Benjamin Graham & Warren Buffett) should be all about. First, because the time periods when a good stock investment will pay off are inherently unpredictable. Second, because there is no way to evaluate similarity of risk profiles for different portfolios that are competing against other in an artificial competition. I know very little about practical investing, but from what I gather, trying to be overly competitive about your returns versus the other guy is exactly what gets you in the most trouble.

Now, those are the drawbacks, but I do see some good that can be done with an "investment choice tracking thread" or something similar. In past years I tracked SEC football picks against the spread on the SEC Rant, just to keep an objective account at who was good at picking games, and who wasn't. It's good to be objective about things, and to do this, it's good to amass a nice data set from lots of people.

The problem here is how to categorize and formalize investment ideas in a way that's flexible enough to take account of varying risk and time profiles. That's not an easy task, and really, I'm not sure I know how I'd go about trying to design it. Still, I think something useful could be done.

quote:

Yeah. You could have 40 people tossing out 20 or so stocks.

We could limit it to 2-3 recommendations per poster so the others could evaluate them independently and give them a rating of 1 thru 5; with 5 being strong support and 1 being weak.

You can't rate your own submissions.


This actually sounds like you're on the right track. I think you should just be flexible about how people choose their own objective measuring criterion. Poster A might give an idea, and say, "I would hold Stock X until June 15." Poster B might give another idea, and say, "I would hold Stock Y until either Stock Z goes below $20/share, the yen appreciates by 10%, or UST 10yr yields rise above 2.5%." Either one should be a valid investment idea.

Ultimately, though, how well the idea pans out will be a subjective judgment. That's why I like your 1-5 rating scale. After a year, the poster who has the best rating average with a minimum of N number of picks could be declared a winner.

For my part, I don't think I'm yet competent to be either making or judging the investment ideas.

Finally, be sure to run things by the admins and be careful about the "this is just a game and should not be construed as actual investment advice," yada, yada, yada.

Posted by matthew25
Member since Jun 2012
9425 posts
Posted on 1/3/13 at 11:14 pm to
I like the idea of each poster with 3-4 stocks and the game ending, . . . wait for it . . . April 1.

Winner gets a free subscription to Chicken's double secret subscription site.

pin above as "The Chicken Fool"
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