Marketocracy General Forums

Not sarcastic. I once tried long term and chose EZPW begin 2005. Now it is much higher, but not after it tanked from 7 down to 4.
in that approach I tried thorough analysis, and looked less at the chart. Maybe if I would combine chart and analysis, but it was a lot of breeding for some scary result for a prolonged period of time.

Now I do analyse nonTA related things but not too thoroughly. I would do it to overlay on my TA if I would have time.

I always believed in CEO , but it took years for it to take off.

Anyway...I ve to read the article.

speaking of short term returns.
i took a look at the momentum picks in that article.
nice average return of 3.5% today.

"dismal in predicting anything longer than a few days "

you serious or sarcastic?
if you are rather good at picking things for a few days, then you might be really good at short term momentum type trading games?

i suck at those. i think.

btw... i do appreciate your comments.

MA long term 150 , 160, then I dont know

ahknaten: you are absolutely right. I am not very good in long term trends. I m actually dismal

in predicting anything longer than a few days (some exceptions..I would expect CCJ to go up long term, and I m normally pretty good predicting qqqq).

Two reasons for my otherwise strong incompetence in long term predictions

a) I really would have to dig much deeper into analysing the growth compared to price

b) historically I trade stocks large enough to carry options, and it is impossible for me to run against premium decline for longer than a few days, maybe weeks. At some time it ll catch you anyway, in a very very negative sense.

I made most of my money (real life) with ENE (for those who forgot there was a company called Enron). But ENE also shows that almost nothing protects against sthg going to happen at some distant future. And the only reason I made money was because I had to liquidify to buy a nice place in a Trump building in Manhattan. (dont have it anymore, it almost impossible to get or stay rich with family...except that family is already rich. Which mine is not . That s another topic I could dwell on: the ruin of being middle class family)

THe only long term chart I m good at is QQQQ.

I VENTURE THE RISK OF giving my few cents to long term qqqq: Crisis around 3000 for Nasdaq composite. Before that smooth ride up, after that maybe too.

that's a pretty short time horizon you're looking at

Well, AAPL has already taken off, and MA looks poised to take off.

So far the naysayers have had no luck

I so agree with your post on Mastercard. It's too high and will soon be heading south. I'm shorting it in my personal portfolio. The credit card companies may be the New Century Financials of the future. Folks can't afford to keep piling on debt. When Mastercard hits 80, I'll re-evaluate it.

I'm keeping my fund in commodity based assets due to the declining dollar. The Fed rate cut has complicated the market situation and will only cause more pain in a decline.

Author:	ahknaten
Link:	http://www.investorplaceblogs.com/users/ahknaten/2007/09/master-ahknaten-card_and_momentum.php
Summary:	I'm sad when I see that folks seem to pick stocks based primarily on momentum. Along with size and v alue, momentum is certainly a factor in the market, but it seems to me that in stock picking competi tions, the best...

I'm sad when I see that folks seem to pick stocks based primarily on momentum. Along with size and value, momentum is certainly a factor in the market, but it seems to me that in stock picking competitions, the best way to win at times is by picking these momentum plays. As Mastercard was held since the start of the competition, then it would appear that it was such a holding.

For fun, I made a paper portfolio of stocks that had nice momentum as of the end of July. That portfolio had TBSI, LPHI, CROX, SIF, EXM, DRYS, RCCC, ZNH, SNCR, CFSG, CEA, INNO, TNH, CF and MA. The two month return of that portfolio was 24%! Much higher than my virtual competition portfolio. Out of those stocks, CEA went up 96%, SIF fell -30% and the standard deviation was 36%! Now, many of those stocks were small, but guess which one had the highest marketcap? Mastercard. So, Mastercard makes for a great blog. Find a stock that many would hold, and those folks probably hold it for some momentum reason. Now, ask those folks to comment on their pick and why they love the stock. Some will talk about how great the company is, and perhaps it is great, but I'd be willing to guess that many picked it just because of the chart.

So, let's assume what I said above is true, and I'll make a paper portfolio with 20 stocks based purely on momentum -- ACH ZNH CEA CROX DRYS TBSI EXM BCSI SNCR CALM FTK CRNT JRJC NWK BPHX CFSG APPY HEM ASTI CORT. Now, I'm not saying these are bad (or good), I'm just saying that they look like momentum plays, and I bet there is a high probability that someone holds a few of these in the competition, and perhaps... in a few weeks we'll get a question that asks: Why do you hold ACH, ZNH, CEA, CROX or DRYS? Someone will come up with some sort of smart response, when in reality they held it for the momentum.

Here's my non-momentum based take on Mastercard. I see a high short interest, high price/book and high accruals. That concerns me. When I value the stock and make a DCF model on eVal, I get a value that is less than $100. (DCF is picky on the tax rate you choose for this one). Then, I look at the earnings history and I notice that it usually beats by 0.10-0.40 cents and I have to stop and ask myself... if it doesn't beat by 0.10 cents next time, what happens? This is a stock that I would sell/short at this point. Some may give the argument that as rates fall, folks will use their cards more. Some will give the argument that as Christmas approaches then everyone will go out shopping. I think it's overvalued, it was a momentum pick and it's due for a correction soon.

By the way, in the Apple blog (part two), I had sarcastically listed some other momentum stocks -- RIMM RIO JNPR AMZN FCX CROX VIP NOV and GMST. On average those stocks went up 6% last week. It's not master stock picking, it's just momentum.