If you're good at something, stay with what you know best. Stay focused on your discipline. Learn some new stuff, but don't go with the 'flow' just because it is popular.

That is the mistake and the lesson I learned in the past competition. I pick stocks based on a quant method and last year the quants got nailed hard. I got caught up in that as well. A lot of quants follow the same sort of numbers, like: PE, price/book, insider buying, accruals, and short interest. They use a bunch of academic research, but everyone seems to know that research. What amazes me, is how much $$ these people make based on 'sophisticated' strategies, when in reality the strategies aren't so sophisticated. Through the years that strategy had worked well, but something strange happened last year and the models seem to have switched (at least for a little while) and a ton of quant shops got nailed. The longs went down and the shorts went up. Quants got screwed.

I was fed-up, and I saw how people were doing rather well with some high-flying momentum stocks, so I changed my strategy and felt like going along for the ride. It wasn't real money, it was a game, and so I chose stocks that I would normally hate. Some stocks were moving nicely and I tried loading up on them, but I made a mistake of accidentally putting too much $$ into them without taking into account the liquidity. I'm still trying to sell some positions, but the illiquidity hurts me, and I wish I could use the money for other stocks. It was a costly mistake.

If you are playing short term stock games, then a strategy that uses high momentum, risky stocks can work. I could not recommend for real life, but in certain virtual games that can give you great returns or destroy you. I'm sure some behavioral finance professors would love that experiment. They like to analyze the behavior people have with stocks, and if an asset is less 'risky', because 'real' money isn't involved, then what would people buy?

So, I'm going back to my roots and doing what I do best -- quant picks.

And along the way I'll look for 'hot' stocks and I'll make sure to list some reasons why I'd avoid them. There are other stocks besides AAPL and GOOG that I dislike.

Oh. Speaking of Apple. I heard in the news that they have somehow misplaced 1 million I-Phones. 3 million phones were bought and 2 million were activated. Something sounds fishy to me.