Value Microcaps Pick Six Lotto 08 (PSL8)

[researcher59]

DSNY is showing some nice growth, but at this stage the PE is very high .... it's a stock that might be worth following, but too early for me to take a position. Need to see continued growth and greater profitability.

[swampboots]

LOVE it (DSNY), under .28.

[DaveinHackensack]

Any thoughts on this micro cap tech: DSNY?

[stanu78]

I read it Dart... etlt number has always been good (compare to it's stock price) and not sure why the stock never really lived up to its potential...

Earning season has started again and hope etlt will move when they announce the official number.
I was expecting some more movement on the preliminary result
result is awesome but I'm reluctant to add since I'm not so sure if they are real or not.

anyway USMo posted great earning and I'm glad that is the case (hope the stock will go up tomorrow)

hope all is well with you Dart..

Stan

[dart39]

stanu78: Did you read Virgil1's post on RB. It won't be long now. Their recent numbers are truly very, very good. We'll be seeing high numbers again....soon!!! Just spoke to a man who has my same last name.,..first name is Scott who lives in Richmond.

[lentinman]

PSL8 IBOX UPDATED:

Results are at the bottom.

Len

[lentinman]

Correct PSL9 link:

Not sure what happened before, but I deleted it.

http://investorshub.advfn.com/boards/board.asp?board_id=12500

Len

[researcher59]

bbotcs: being a 'techie' by profession both helped AND hurt me during the late '80's and '90's ..... I invested in many small companies because I knew their products were good, but they still failed because they lacked the marketing muscle to compete with larger players.

All investors who followed tech leaders like MSFT, INTC, ORCL, AMAT, CSCO and DELL had the opportunity for a big joyride .... these companies were widely written about in the WSJ and NY Times, so one didn't have to be a 'techie' to realize their leadership positions and ongoing strong growth. I remember the day in 1990 that MSFT went public .... my ties to IBM hurt me because I was biased against MSFT and felt the stock's PE was undeservedly high, so I never bought any shares ..... MSFT became a 400 bagger within a decade. In the meanwhile my large position in IBM languished for years as the stock greatly underperfomed the broader market. IBM was a great stock to own in the '60's, '70's and early '80's, but not after that. Hindsight is perfect as usual.

[bbotcs]

researcher59:

You had the opportunities of 10 lifetimes, being a techie AND an investor in technology stocks in the 1990's. I have heard those DELL stories. One guy where I worked told me about another guy (an IT person, of course), who made $7M in DELL.

I hope you realize that luck had a big role in your success pre 2002. You were in the right place, at the right time, with the right knowledge. If you were born, say 15 years earlier, you probably wouldn't have been a techie and would not have known or cared about DELL.

By the way, you might be crazy. You do know this? I was crazy, but there is a cure. You start by selling maybe 20 stocks, followed by two more purges, over a period of say 18 months. I got down to about 50 positions, and am hovering around 60, which is 30 more than I want. Investing in VM's is a disease. What I do to control myself is buy maybe 100-300 shares, just to be a participant. That is what I did with SOLF, and with AYSI, to name two.

My IRA has gone from maybe 60 stocks to just 12. Having so few stocks in a portfolio gives me a feeling of control, of empowerment. And, you can really get to "know" your companies.

100-bagger on DELL. WOW!

bbotcs

[valuemind]

Thanks for your honest explanation of your investment history and style. It is very informtive. My question: Can some of VMC pickers do what Warren Buffet do? Why?

[lentinman]

PSL9 deadline:

The deadline is a week from Friday, May 16. No urgency, but, you might start thinking about it if you haven't already. I'll be updating the IBox soon as well as completing the PSL8 IBox.

http://investorshub.advfn.com/boards/board.asp?board_id=12500

Len

[researcher59]

SSK, Len: great statistics ! Very interesting mathematical reflections of the contest. Thanks again for all the hard work you guys put in.

[beigledog]

Of course I have (at least one of) my best day the day after the contest ends!

[zenvesting]

researcher59, excellent write-up! Congratulations on the win!

[beigledog]

I still can't even make it into the top 40, despite a 15th place finish.

[MikeDDKing]

r59, Congrats on the win and thanks for your comments. One thing I found of interest in your comments is that you have a software background. I wasn't aware of that. There actually are a number of people on VMC with similar backgrounds. My corporate career was also in software engineering. I also remember that gilead23 and tbone58x have software backgrounds. There probably are a few more with that kind of background that I either forgot to mention or that I don't know about. Also, if you broaden the scope to all types of engineering I know there are more people.

Mike

[lentinman]

Cl:

"1. You won PSL in 2008.
2. You won PSL No. 8!"

Not to mention he is the only one of us to have positive returns in all 8 PSL's (8-0).

http://investorshub.advfn.com/boards/read_msg.asp?message_id=28827635

Add to that his induction to the assistant's job on VMC on 4-21. (4 x 2 / 1 = 8). Oh, my God. It's an harmonic convergence!

http://investorshub.advfn.com/boards/read_msg.asp?message_id=28671577

April 21 to April 25 should forever be remembered as Researcher Week.

Len

[littlefish]

cl, I thought the surprise in the contest was LBASS!!! (OK, lbas...).
The guy takes 4th place and only had one member mark until I realized he only had one LOL.

PS- I'm sticking with my fish theory! Bigpike will win PSL9. You heard it here first. OK, maybe Roguedolphin or LBASS (err, lbas)! One of those three... IMO only.

[cl001]

Congrats R59! Nice write up of your background and investment style. Maybe you want change your alias to research08 now since
1. You won PSL in 2008.
2. You won PSL No. 8!
Your detailed DDs on VM board are much appreciated. One day I will trade some commodity futures, just like you.

[lentinman]

NSOM CHALLENGE STATS:

There should be no question that those people who took the time to think through their picks enough to be part of the NSom Challenge would do better.

Here is a simple stat. 16 of the TOP 20 were participants in the NSom Challenge. That means that only 4 of the top 20 did not participate. However, 12 of the BOTTOM 20 did not participate.

Clearly, spending the extra time to analyze the stocks to the point of being able to present your DD to the board, is (on average) going to give you better returns.

Len

[lentinman]

Individual Tournament Final Results

PSL1: No tournament
PSL2: Lentinman over Digitech
PSL3: Cl001 over MikeS
PSL4: Cl001 over Bobwins
PSL5: Cliff over Kipp
PSL6: TMCal over Valuemind
PSL7: Stevenrisk over Bobwins
PSL8: Swick over SWB

Len

[lentinman]

All 6 Units Positive:

Here are the people who have had all six units positive for each contest to date. Researcher was the only one for PSL8. 10 Bagger leads having done it four times.

ALL SIX UNITS POSITIVE

PSL1: 10Bagger, SkepticalOptimist

PSL2: Kipp, Lentinman, Linuspop, Pattydady, Pnnymn, Researcher59, RRainman

PLS3: Cl001, Mike056

PSL4: 10Bagger (2), BlueBear, Cliff, Kipp (2)

PSL5: 10Bagger (3), Nelson, Southacres, Arnie, Cliff (2), Roguedolphin, SWB173, CRKranz, JustForFun, Rsadey, WillLyons

PSL6: None

PSL7: 10Bagger (4), Fructose, Gilead, Lentinman (2), MichaelT

PSL8: Researcher (2)

Len

[lentinman]

Wild Card Reversal:

This is the first contest where Wild Cards were better than non-WCs.

                                        PSL3  PSL4  PSL5  PSL6  PSL7  PSL8   
 Average Wildcard Index (unweighted)     -16%  +10%  +15%  -20%  - 1%  + 4% 
 Average Non Wildcard Index (unweighted) - 6%  +14%  +19%  - 5%  + 3%  - 6%                                      
 ---------------------------- 
 DIFFERENTIAL IN FAVOR OF NON WILDCARD   +10%  + 4%  + 4%  +15%  +18%  -10%

Len

[lentinman]

R59'S PSL HISTORY:

         PSL1    PSL2   PSL3    PSL4   PSL5    PSL6   PSL7    PSL8 
 Rank      53      18     26      48     56      3      33      1 
 Return +15.70% +46.53% +2.91% +11.26% +9.37% +27.98% +7.42% +40.49%

Len

[lentinman]

All Eight PSL Winners:

PSL1: Winner: CWS9      (+ 95.16%) 
 PSL2: Winner: Networm   (+111.44%) 
 PSL3: Winner: KIK       (+ 45.32%)  
 PSL4: Winner: Bobwins   (+ 57.95%)  
 PSL5: Winner: DanLC     (+156.22%)  
 PSL6: Winner: Niles     (+ 35.69%)  
 PSL7: Winner: Gilead    (+ 68.11%) 
 PSL8: Winner: R59       (+ 40.49%)

Len

[lentinman]

High to Low Ranges:

Shown are the best and worst returns for each PSL and the range.

       BEST    WORST    DIFF 
 PSL1  95.16%  -44.88%  140.04% 
 PSL2 111.44%  - 9.42%  120.86% 
 PSL3  45.32%  -32.03%   77.35% 
 PSL4  57.95%  -24.05%   82.00% 
 PSL5 156.22%  -27.99%  184.21% 
 PSL6  35.69%  -31.45%   67.14% 
 PSL7  68.11%  -29.28%   97.39% 
 PSL8  40.49%  -33.21%   73.70%

Len

[lentinman]

PSL1 - PSL8 PERCENT RETURNS:

      MEAN  MEDIAN 
       AVG%   AVG%  WINNER  #5   #10   #20   #40 
 PSL1   28     28     95    68    62    48    25 
 PSL2   26     22    111    89    64    44    26  
 PSL3   -4     -5     45    21    12     5    -5     
 PSL4   15     14     58    44    39    24    15 
 PSL5   23     19    156    61    54    34    20 
 PSL6   -2     -1     36    27    20    11     1 
 PSL7    8      4     68    49    39    22     4 
 PSL8   -3     -5     40    21    12     3    -4

Len

[lentinman]

FINISHING POSITIVE:

Shown below are the contestants that have the best records (minimum 5 contests) in terms of finishing each contest with a positive return versus a negative return.

Only Researcher59 has finished all eight contests positive. A few others have finished all contests they have entered positive, but they have not entered all eight.

Researcher 8-0 
 -------------- 
 Cliff      7-0 
 Snakeman   7-0 
 -------------- 
 Guy        6-0 
 -------------- 
 Erehwontim 5-0 
 -------------- 
 Mr. Sheep  7-1 
 ABH3VT     7-1 
 HWeb       7-1 
 Linuspop   7-1 
 -------------- 
 NilesCrane 6-1 
 -------------- 
 Nuts-Golf  5-1 
 Wyobuford  5-1 
 Steeledge  5-1 
 -------------- 
 JimWi      4-1 
 Yinser     4-1

Len

[lentinman]

BENEFIT OF TRADES:

SSK shows the original portfolio average return as well as the average return of a portfolio (meaning with trades) each week in his Indexes report.

http://investorshub.advfn.com/boards/read_msg.asp?message_id=28820612

Here are the results and the differential (all in favor of trading) since PSL3. We have no separate stats for PSL1 and PSL2, although I did another type of analysis after PSL2.

http://investorshub.advfn.com/boards/read_msg.asp?message_id=10886067

Therefore, I'm showing the differential for each PSL contest except PSL1.

      Trades  No Trades  DIFF 
 PSL2  26.00%   16.03%   +9.97% 
 PSL3  -4.12%   -6.13%   +2.01% 
 PSL4  14.54%   14.40%   +0.04% 
 PSL5  22.70%   18.84%   +3.86% 
 PSL6  -1.91%   -4.01%   +2.10% 
 PSL7   8.19%    5.36%   +2.83% 
 PSL8  -3.00%   -3.94%   +0.94%

As you can see, the differences are fairly minimal, but a gain is a gain. Also, keep in mind that it is harder to get the full benefit of trading in the contest vs real life because you have to do it as of a closing price versus during a day when a stock may have spiked up or down.

Len

[lentinman]

ROOKIE OF THE CONTEST (ROTC):

Littlefish  # 2  +25.24% 
 Lbas        # 4  +21.28% 
 Lsig        #12  +11.35% 
 FrankValue  #19  + 4.72% 
 Giff        #51  - 7.96%

Here are the ROTC's for each of the contests after PSL1.

PSL2: Networm        # 1  +111.44% 
 PSL3: StyleCounciler # 5  + 21.23% 
 PSL4: Bluebear       # 4  + 44.23% 
 PSL5: Just4Fun       # 4  + 61.20% 
 PLS6: Skidos         #22  +  8.69% 
 PSL7: Northernlight  # 7  + 45.31% 
 PSL8: Littlefish     # 2  + 25.24%

What I find interesting is that just about every contest has had a Rookie place very high. That would have seemed highly improbable, but there it is.

In any event, anyone considering PSL who has not participated in PSL1-8 need not be intimidated. Simply apply the fundamental values that we adhere to and you should have a good shot a doing quite well.

Len

[lentinman]

AVERAGE RETURN vs AVERAGE RANK:

I posted this at the end of each PSL contest.

Average return is a better measurement than average rank in most cases. For example, let's say Person A had +200% in the first PSL contest and the next closest was Person B at +50%. Now, let's say the next two contests were shown below:

            Person A       Person B 
            Return Rank    Return Rank 
 Contest 1   200%    1       50%    2 
 Contest 2    45%    3       50%    2 
 Contest 3    45%    3       50%    2

If you use total return, Person A had an average return of 96.7%, while Person B had an average return of 50%. However, if you use rankings, Person A had an average rank of 2.33 compared to Person B's average rank of 2.00.

Clearly, IMO, average return is superior to average rank based on this example.

However, there is also a weakness in average return. Say, for example, that the Person C played only in Contest 1 and Contest 2, while Person D played in all three. Let's also say that the average return by all contestants in Contest 1 was 50%, the average return by all contestants in Contest 2 was 50%, but the average return by all contestants in Contest 3 was only 10% because the market had a major correction.

So, consider this possibility:

             Person C       Person D 
            Return Rank    Return Rank 
 Contest 1    70%    8       75%    6 
 Contest 2    70%    8       75%    6 
 Contest 3     -     -       30%    6

Using this example, Person C would have the higher return average (70% versus 60%), but a lower rank average of 8 versus 6.

Who is better? Well, IMO, clearly Person D is better. It wasn't because C was better that they missed Contest 3 and therefore, Person D should not be penalized.

So, there you have two perfect examples of why one is better than the other. Because of that, you can choose either one as your favorite method. I listed the top-40 in both.

Len

[lentinman]

TOP 40: PSL1-8: AVERAGE RANK:

Must have participated in at least 4 of the 8 PSL contests to qualify (86 QUALIFIERS)

                  AVG 
                   RANK 
  1 EREHWONTIM    19.00 
  2 WYOBUFORD     19.50 
  3 CLIFF         21.00 
  4 KIPP          22.71 
  5 NILES         23.29 
  6 GUY           23.33 
  7 SNAKEMAN      24.29 
  8 NSOMNIYAK     24.86 
  9 MR. SHEEP     25.13 
 10 ABH3VT        25.25 
 11 BIGPIKE       29.00 
 12 STEELLEDGE    29.33 
 13 GILEAD        29.38 
 14 CL001         29.63 
 15 DANLC         29.63 
 16 RESEARCHER    29.75 
 17 LENTINMAN     30.13 
 18 TMCAL         31.25 
 19 CLEVERROX     32.20 
 20 NELSON        32.25 
 21 KNOWLEDGE     33.88 
 22 ARNIE         34.88 
 23 HWEB          35.00 
 24 TBONE         36.00 
 25 LINUSPOP      36.13 
 26 STANU         36.38 
 27 STEVENRISK    37.43 
 28 DIGITECH      38.14 
 29 MICHAELT      38.20 
 30 MIKES         38.25 
 31 OLDPRO        39.00 
 32 2MORROW       39.13 
 33 VALUEMIND     39.25 
 34 JIM_WI        39.33 
 35 SSKILLZ       39.38 
 36 10BAGGER      39.50 
 37 MIKE0         39.50 
 38 BOBWINS       39.50 
 39 NUTS          39.50 
 40 HOGFAN        39.60

Len

[lentinman]

TOP 40: PSL1-8: AVERAGE RETURN:

Must have participated in at least 4 of the 8 PSL contests to qualify (86 QUALIFIERS)

                  PCT 
  1 EREHWONTIM    36.16 
  2 DANLC         34.52 
  3 KNOWLEDGE     34.02 
  4 KIPP          30.45 
  5 GUY           28.14 
  6 NILES         27.78 
  7 STEELEDGE     27.21 
  8 ABH3VT        25.40 
  9 MR. SHEEP     25.21 
 10 CLIFF         24.71 
 11 NSOMNIYAK     24.26 
 12 LENTINMAN     23.99 
 13 BIGPIKE       23.62 
 14 NELSONN       23.37 
 15 GILEAD        22.34 
 16 SNAKEMAN      21.97 
 17 TMCAL         21.83 
 18 WYOBUFORD     20.32 
 19 RESEARCHER    20.21 
 20 HOGFAN        20.13 
 21 STANU         18.55 
 22 NETWORM       17.48 
 23 DIGITECH      17.41 
 24 CLEVERROX     17.12 
 25 CLOO1         16.44 
 26 TBONE         16.28 
 27 ECHOS         16.27 
 28 STEVENRISK    15.62 
 29 VALUEMIND     15.47 
 30 BOBWINS       15.12 
 31 LINUSPOP      14.85 
 32 NUTS          14.28 
 33 RRUFFF        13.84 
 34 HWEB          13.70 
 35 SSKILLZ       13.21 
 36 10BAGGER      13.19 
 37 2MORROWS      13.16 
 38 SHMOLTON      12.88 
 39 ARNIE         12.73 
 40 MIKES         12.66

Len

[lentinman]

PSL9:

http://investorshub.advfn.com/boards/board.asp?board_id=12500

Deadline: May 16
Start date: May 19

Len

[lentinman]

Stocks per price group:

It is clear that the $5-$9.99 range is superior to other price groups - especially the one right below it ($3.00-$4.99). Also, the sample size is several hundred for each group, so there isn't much doubt left.

We've speculated on this before, but the most logical explanation is that more people are willing to buy a stock when it breaks $5.00 than before it does.

Shown below are the 8 contests and the returns for each price group in each contest.

Percent gain/loss per contest:

            PSL1   PSL2   PSL3   PSL4   PSL5   PSL6   PSL7   PSL8   CUMULATIVE  
 $0.25-0.99  14.43  31.23 -16.07   8.12  37.20 -11.09  -9.15  -4.11     6.97% 
 $1.00-2.99  26.29  12.84 - 6.73  11.40  13.73 -14.74  -2.96  -6.46     4.85% 
 $3.00-4.99  12.90  11.52 - 9.74   6.30  13.62 -10.28   7.82  -8.49     2.74% 
 $5.00-9.99  34.02  19.54 - 2.66  23.08  13.43   0.97  -0.54  -7.31    10.18%  
 $10.00+     16.42   5.49 - 0.12  16.41  10.17   3.76   2.53  -0.18     6.40%

Len

[lentinman]

FINAL PSL8 vs WILSHIRE 5000:

Spacing
For
Freebies
So
That
Ads
Won't
Interfere
With
The
Table.

PSL DIFF% is the difference between each PSL's average portfolio return and the W5K.

                          PSL8     PSL7    PSL6    PLS5    PSL4    PSL3    PSL2    PSL1 
 Week  #   PSL8%   W5K%    DIFF%    DIFF%   DIFF%   DIFF%   DIFF%   DIFF%   DIFF%   DIFF% 
 Week  1  -3.88%  -5.23%  +1.35%   + 2.67  + 1.30  + 1.93  + 0.16  + 1.84  + 5.35  - 0.92 
 Week  2  -4.81%  -4.41%  -0.41%   + 9.09  + 1.66  + 6.32  + 0.18  + 3.63  + 7.84  + 3.65 
 Week  3  -0.66%  +0.35%  +1.01%   +15.02  + 1.32  + 6.46  - 0.24  + 1.98  +15.12  + 3.06 
 Week  4  -0.38%  -3.97%  +3.59%   +18.58  + 0.96  +10.97  + 1.92  - 0.81  +11.34  + 5.68 
 Week  5  -1.42%  -2.78%  +1.36%   +21.31  + 4.86  +12.14  + 3.44  + 1.90  +12.77  +13.48 
 Week  6  -0.82%  -2.70%  +1.88%   +21.99  + 5.88  +15.32  + 4.72  + 1.90  +15.88  +21.25 
 Week  7  +1.52%  -4.18%  +5.70%   +22.29  + 6.58  +12.88  + 4.87  + 2.42  +15.27  +20.53 
 Week  8  -3.41%  -7.05%  +3.64%   +20.52  + 7.91  +12.67  + 5.72  + 2.06  +12.45  +16.31 
 Week  9  -7.47%  -7.47%  +0.00%   +13.85  + 9.65  +13.78  + 1.61  - 0.37  +12.41  +21.27 
 Week 10 -12.13%  -5.03%  -7.08%   + 9.47  + 8.51  +13.21  + 4.36  - 0.75  +14.37  +32.43 
 Week 11  -8.17%  -5.62%  -2.55%   +10.71  + 9.41  +14.02  + 5.60  + 0.49  +17.73  +36.89 
 Week 12  -7.18%  -1.57%  -5.61%   + 9.18  + 3.89  +13.34  + 5.11  - 2.46  +19.70  +35.43 
 Week 13  -6.50%  -4.19%  -2.31%   + 9.09  + 0.06  +15.19  + 5.88  - 5.83  +21.16  +40.91 
 Week 14  -2.77%  -0.19%  -2.58%   ------  + 0.19  +16.14  ------  - 4.99  +23.82  +36.49 
 Week 15  -3.00%  +0.33%  -3.33%   ------  + 1.08  +17.97  ------  - 6.59  +24.35  +29.17* 
 -------------------------------------------------------------------------------

*Final DIFF% for PSL1 was +23.40% (27 weeks)
The W5K began on January 14th at 14,043.

Len

[lentinman]

CHAMPIONS BOARD UPDATED:

http://investorshub.advfn.com/boards/board.asp?board_id=4067

Len

[roguedolphin]

Congrats!.....look forward to more good picks from you, even from the short side where applicable!

[littlejohn]

Good job and it looks like experience helped you along some...LJ

[lentinman]

PSL TOURNAMENT: Championship Result:

DAY 10 of 10:

2.39% SWICK984 vs SWB173 2.03%

Great battle!

Len

[researcher59]

My remarks for the VMC Champions Board -

PERSONAL BACKGROUND

I’m 48 and live just outside NYC, the financial capital of the world (’59, the suffix of my alias is my year of birth and seems to be drifting ever further into the past). I was introduced to investing by my father when I was just 12 years old and looking for better returns than just the interest on my bank account. I was working as a paper boy and earning what seemed a small fortune of $25 per week and decided to risk some money on one of my father’s then favorite stocks, a company called “Interstate United”. He invested about $500 of my savings and a few years later I had a better than 50% gain, which profoundly impressed me and whetted my appetite for future investing. The psychological groundwork for taking calculated financial risks was etched in my mind.

I spent most of my career with IBM as a networking software specialist and the final five years with AT&T which my IBM division was spun off to. My educational background is a BS in Computer Science from Pace U. and an MBA in finance from NYU. In October 2002 I was let go by AT&T in a major round of cutbacks, and being single and risk tolerant, I decided to devote my full attention to investing. Throughout my career investing was almost like my second profession and I was very successful during the late 80’s and especially the bull market of the 90’s in aggressively managing my money, which I invested almost exclusively in the technology sector, which I knew best. I was always at least 10% on margin. I had plenty of losers but numerous big winners as well, most notably DELL which became over a 100 bagger for me in a six year period and represented roughly 50% of my portfolio at its peak ….. my overall returns were much better than the major market indexes even though my time for research was very limited by my full time job, a part time MBA program as well as social and sports activities.

I fared remarkably well in the first two years of the 2000 – 2002 bear market, losing only about 10%, helped by a big bet on ESST, which became a multi-bagger in spite of the poor market. I had a much smaller portfolio in those days and put at least 15% into ESST, an emerging leader a semiconductor niche. Then in early 2002 I decided to move heavily back into the technology sector which I had partly diversified out of in the late 90’s ….. I was crushed by a 61% loss that year, the result of poor investment decisions, bad luck and a terrible market for the tech sector along with margin borrowing that worked against me. WCOM was the biggest of my many losers that year. CEO Bernie Ebbers told shareholders that Worldcom’s financial woes were just a Wall Street misperception and not reality. I trusted him, figuring he’d never lie like that or else he’d wind up in the “big house” (jail). That’s where he is today. My large WCOM position became nearly worthless and it was like an unwelcome but essential wake up call. Fortunately my portfolio valuation, having grown over many years, was large enough to sustain the losses of 2002 and still remained substantial enough to allow me to try full time investing ….. the timing was perfect since the bear market hit bottom just a week before I lost my job with AT&T in October of 2002. The bull market began just as I became a full time investor ! It was good riddance to my old job which was ever changing in recent years and had lost its earlier strong appeal.

In late 2002 I moved into a small one bedroom apartment to cut costs and eagerly set out to restructure and diversify my stock portfolio. I liked the idea of being my own boss and the upturn in the market gave me confidence that I could overcome the debacle of 2002, my only truly terrible year of investment returns. That began the most successful five year period in my investment history. Being full time and having the internet to do stock research greatly enhanced my opportunity for success. I could read the SEC filings online, see press releases as they were issued and keep track of my stocks throughout the day. Most importantly, I enjoyed it very much and had the time to put in at least 50 hours a week doing stock research. Furthermore the three year bear market had created an abundance of bargains especially among the small and microcap stocks. There was lots of “low hanging fruit” as Lentinman has called it. It was easy ‘pickings’ and my portfolio valuation rebounded steadily.

In 2004 I ran into a guy named Bobwins on the YAHOO message board for PLCC …. I was very impressed by his posts and followed him to Raging Bull where I gradually spent more and more time ….. for the first time ever I tried investing in OTCBB stocks, and quickly found some winning ideas on the message board, particularly those recommended by Hweb2.


PSL8 Contest

PSL8 began in mid January during a challenging period in the market and I chose my stocks accordingly with a few more defensive plays. Luck, both good and bad, is always an important player in these contests and this time around I was the beneficiary of more of former than the latter. OFI gross margins rebounded more quickly than I anticipated and a director made a takeover bid for the company. SUOT announced they were moving from the OTC bulletin board to the Nasdaq. I discovered GUPR and thought it might be a homerun, but it turned out to be a strikeout instead. I refer you to my “Nsom Challenge” post for the rationale behind my original six picks, OFI, HURC CKGT, SUOT (now SUTR), SIF and TBYH. As usual, I made good use of our 4 allotted trades and held 10 stocks in all during the contest. Typically I’ll do a double down in the later stage of the contest if I want to be aggressive, but in this case I had a roughly 20% lead for the last few weeks so played it conservatively instead, even freezing 3 stocks ahead of the earnings rather than risk a disappointment. That served me well in the case of GUPR, but cost me a bit in the case of MALL.

My 6 stock portfolio finished up 40% with a valuation of $8429 …. The gain of $2429 is approximately attributable as follows –

  
 OFI  +$939   held throughout 
 MALL +$581   trade from SIF the last few weeks 
 SUTR +$386   held throughout 
 HURC +$238   held throughout 
 ASFI +$190   trade from CKGT the last few weeks 
 CKGT +$97    traded late into ASFI 
 TBYH +$35    traded early into GUPR 
 KRSL +$6     trade from GUPR the last few weeks 
 GUPR +$0     trade from TBYH early 
 SIF -$43     traded late into MALL  
 

INVESTMENT STYLE

My own stock portfolio currently has about 120 stocks, which is clearly excessive, but reflects the fact that I follow a lot of stocks and am not averse to holding some very small positions, albeit those are somewhat (if not greatly) ignored, hence missed trading opportunities and superficial research. Of course the VMC board provides lots of useful ideas and due diligence that one can rely on which is a great help. I like to be diversified across most sectors of the market and employ many strategies. Just one initiative in recent weeks and months has been to accumulate some of the beaten down cyclicals like LAD, ABG, TEX, SVLF, HURC and ATRM as well as financials like ASFI, ADVNB and MFI with a long term rebound in mind. My top holding is currently EBIX, a 6% position, many shares of which I have already held for over a year. My top 10 holdings in aggregate currently represent about 35% of my portfolio whereas the smallest 20 holdings combined are only worth about 3%. Arguably I should do some pruning since my smallest holdings really have very little impact on my overall returns and should probably just be in watch lists.

My focus is on the fundamentals with emphasis on low PE microcap and small cap stocks, preferably showing significant growth. The amount of due diligence I put into a stock depends partly on its position size. If it’s just a fraction of 1% then my dd is often superficial and I’ll rely partly on the proven skills of our many fine posters. If I’m scaling into a larger position then I’ll increasingly do more dd. I always skim the recent SEC filings and check the chart to get a feeling for how a particular stock trades and what the current trend is. For my larger holdings I will sometimes have a ‘core’ position as well as a ‘trading’ position depending on the volatility and liquidity of the particular stock. Normally I use GTC orders to capture short term trading gains as the stock rises and falls, updating them regularly as they trigger. SUTR and MALL are good examples of stocks that I have traded partially in and out of frequently in recent months while maintaining a core position (although I recently sold out of my last shares of MALL thanks to the significant rise in price). Approximately 17% of my portfolio is currently in OTCBB stocks. My holding periods for stocks varies greatly. On rare occasions I’ve even flipped shares within minutes of buying on a price surge but generally I’ll hold a position for a few months and sometimes many years. Increasingly I find that most of my taxable gains represent short term capital gains, whereas years ago virtually all my gains were long term since I would offset short term gains with losses particularly at year end.

I also frequently trade stock options and commodity futures as well as go short stocks, but in aggregate these positions generally represent less than 10% of my total portfolio. Typically in the case of stock options, my positions are short, both covered and uncovered, to capture high option premiums. However I’ll sometimes go long call options, particularly LEAPs, to gain leverage in a stock.

The VMC board is by far the finest I have ever come across on the internet and has significantly contributed to my success in recent years. The expertise and due diligence of so many of our contributors is unrivaled in my experience. I look forward to continued successful investing and trading together in the years ahead. I wish our entire group success.

[nsomniyak]

Congrats to R59! Great job against a tough market in the background!

[SSKILLZ1]

Move Up/Down Using Consistency Standings (In % Terms)

Now this shows who was Positively/Negatively affected in % Terms by using consistency standing. Anyways Congrats to KIPP440 he was the most positively affected in % Terms by consistency standings. 40/82 People were positively affected in % terms by this stat. Hope This Helps.

Stock Pickers Alias---Change in % Gain/Loss
1 KIPP440 6.81%
2 CLEVERROX 6.73%
3 DIGITECH 6.10%
4 PNNYMN 5.67%
5 MR. SHEEP (Without $CASH$) 5.55%
6 CWS9 5.15%
7 CL001 4.79%
8 STEVENRISK 4.20%
9 LINUSPOP 4.18%
10 BOBWINS 3.72%
11 SSKILLZ1 3.63%
12 WORTHYLION 3.62%
13 DANLC 3.35%
14 ZEN LUNATIC420 3.23%
15 STIFFLER68 3.00%
16 GILEAD23 2.72%
17 ECOBLOT 2.57%
18 Mr.SHEEP 2.55%
19 NILES CRANE3 2.48%
20 BBOTCS 2.41%
21 FRUCTOSE 2.38%
22 TIMHYMA 2.26%
23 SNAKEMAN84 2.10%
24 BLEUTIGREDANCING 2.01%
25 RRUFFF 1.98%
26 FINANCIAL ADVISOR 1.83%
27 AVANDALAY05 1.55%
28 LISG 1.39%
29 10BAGGER 1.26%
30 MIKE056 1.19%
31 SKIDOS 0.85%
32 FRANK VALUE 0.77%
33 SWICK984 0.71%
34 LENTINMAN 0.68%
35 MSGI 0.66%
36 RMIWA 0.31%
37 OTCBARGAINS 0.27%
38 STANU78 0.18%
39 YIELDDUDE 0.15%
40 GIFF 0.10%
41 WYOBUFORD -0.07%
42 MIKES97707 -0.07%
43 TBONE58X -0.24%
44 VALUEMIND -0.27%
45 THEALICEMAY -0.46%
46 SEEKSUP -0.55%
47 BIGPIKE -0.73%
48 THREES -0.87%
49 NELSON1234 -0.88%
50 JSIM -0.95%
51 KRISRYDEN -0.97%
52 CRKRANZ -1.11%
53 NORTHERNLIGHTSK05 -1.27%
54 NETWORM -2.02%
55 CURLEWS -2.13%
56 SWANLINBAR -2.20%
57 BEIGLEDOG -2.24%
58 JOEINIOWA -2.24%
59 DEATHTOTAXES -2.29%
60 KNOWLEDGEISKING -2.50%
61 WADEGARRET -2.54%
62 STEELEDGE -2.54%
63 SHMOLTON -2.67%
64 TMCAL6 -2.88%
65 2MORROWSGAINS -2.98%
66 SWB173 -2.99%
67 HWEB2 -3.07%
68 OLDPRO -3.26%
69 NSOMNIYAK -3.88%
70 RESEARCHER59 -4.14%
71 URSINEUS -4.50%
72 BUCFAN33617 -4.52%
73 ARNIE70 -4.53%
74 ROGUEDOLPHIN -6.04%
75 STOCKPEEKER -6.49%
76 LITTLEFISH -6.99%
77 MICHAEL T -7.31%
78 LBAS -8.64%
79 ABH3VT -9.70%
80 SWAMPBOOTS -10.42%
81 NUTSABOUTGOLF2001 -12.60%
82 CLIFFVB -12.92%

[SSKILLZ1]

Move Up/Down Using Consistency Standings (In Position Terms)

Obviously you Knew I just couldn't of left it there. My next question is in terms of Position who benefitted the most by using consistency standings compared to the regular way we look at things. Also who was hurt the most. Did you Move Up/Down (in position terms) from where you placed in the regular standings. Well it's Time to find out. I just want to say congrats to the person who benefitted the most from this statistic (Moving up the most places) KIPP440 move up 16 spots looking at it from this perspective. Anyways without further ado here is the info.

Note: - means you were negatively affected by consistency standings. Hope This Helps.

Stock Pickers Alias---Change In Rank
1 KIPP440 16
2 CWS9 15
3 BOBWINS 13
4 DIGITECH 13
5 STEVENRISK 13
6 STIFFLER68 13
7 PNNYMN 12
8 AVANDALAY05 10
9 CLEVERROX 8
10 FRUCTOSE 8
11 MR. SHEEP (Without $CASH$) 8
12 WORTHYLION 8
13 ZEN LUNATIC420 8
14 OTCBARGAINS 7
15 TIMHYMA 7
16 BLEUTIGREDANCING 6
17 DANLC 6
18 BBOTCS 5
19 CL001 5
20 GILEAD23 5
21 FINANCIAL ADVISOR 4
22 LINUSPOP 4
23 MSGI 4
24 SNAKEMAN84 4
25 VALUEMIND 4
26 ECOBLOT 3
27 LENTINMAN 3
28 LISG 3
29 NILES CRANE3 3
30 SSKILLZ1 3
31 BUCFAN33617 2
32 Mr.SHEEP 2
33 NELSON1234 2
34 SKIDOS 2
35 THREES 2
36 YIELDDUDE 2
37 RMIWA 1
38 RRUFFF 1
39 THEALICEMAY 1
40 DEATHTOTAXES 0
41 GIFF 0
42 JSIM 0
43 MIKE056 0
44 RESEARCHER59 0
45 STANU78 0
46 SWICK984 0
47 CRKRANZ -1
48 TBONE58X -1
49 WYOBUFORD -1
50 CURLEWS -2
51 FRANK VALUE -2
52 KNOWLEDGEISKING -2
53 MICHAEL T -2
54 MIKES97707 -2
55 NORTHERNLIGHTSK05 -2
56 STOCKPEEKER -2
57 SWB173 -2
58 10BAGGER -3
59 BEIGLEDOG -3
60 LITTLEFISH -3
61 SWANLINBAR -3
62 TMCAL6 -3
63 JOEINIOWA -4
64 2MORROWSGAINS -5
65 ROGUEDOLPHIN -5
66 WADEGARRET -5
67 BIGPIKE -6
68 KRISRYDEN -6
69 LBAS -6
70 SEEKSUP -6
71 URSINEUS -6
72 HWEB2 -8
73 STEELEDGE -8
74 NETWORM -9
75 SHMOLTON -10
76 CLIFFVB -11
77 NSOMNIYAK -11
78 OLDPRO -11
79 ARNIE70 -13
80 SWAMPBOOTS -17
81 ABH3VT -27
82 NUTSABOUTGOLF2001 -28

[SSKILLZ1]

Mr. Consistency Standings

The Methodology: I provided a Mr. Consistency stat in VMC PSL 1, but couldn't do it in contest 2 + 3 due to trades. Anyway I found a new way to handle the situation in VMC PSL 4, 5, 6, 7, 8 and beyond. Yes it it a different calculation then the one used in VMC PSL 1, but I still believe it shows a consistent stock picker, hence I'm going to call it Mr. Consistency standings.

Now first it is important to recognize that we start out with 6 position and end with 6 position. We may not have 6 different stocks in the portfolio, or the same 6 stocks we started with, but we still have 6 different positions.

From A calculation standpoint, we Take out the top performing and Worst Performing position of each person's PSL. We then Average the other 4 and we get an answer. I'm not going to bore anyone with the math behind it as it is very boring. But I believe this should give you a good idea of what I've done.

As you can see from a consistency standpoint. RESEARCHER59 was up 36.35% using the consistency standings. So congrats to RESEARCHER59 he is Mr. Consistency. There are 30/82 portfolios in positive territory using this stat instead of 29/82 the way we look at it to get a VMC PSL Champion. Well anyways I hope everyone enjoys this, I put a lot a work into this one, but I feel it is worth it.

Stock Pickers Alias---%Up/Down
1 RESEARCHER59 36.35%
2 RRUFFF 25.93%
3 CL001 20.41%
4 ECOBLOT 19.61%
5 LITTLEFISH 18.25%
6 NILES CRANE3 17.96%
7 SNAKEMAN84 13.69%
8 BBOTCS 13.56%
9 LISG 12.74%
10 LBAS 12.64%
11 ROGUEDOLPHIN 11.24%
12 NORTHERNLIGHTSK05 10.53%
13 SSKILLZ1 10.38%
14 LINUSPOP 9.83%
15 CLEVERROX 9.32%
16 CLIFFVB 7.68%
17 MR. SHEEP (Without $CASH$) 7.49%
18 BEIGLEDOG 7.26%
19 WADEGARRET 7.06%
20 10BAGGER 6.94%
21 FRANK VALUE 5.48%
22 MIKE056 3.78%
23 BLEUTIGREDANCING 2.10%
24 SKIDOS 1.92%
25 DIGITECH 1.88%
26 GILEAD23 1.67%
27 PNNYMN 1.26%
28 WYOBUFORD 0.82%
29 KIPP440 0.51%
30 Mr.SHEEP 0.38%
31 TBONE58X -0.34%
32 HWEB2 -0.59%
33 SWICK984 -1.61%
34 ARNIE70 -1.72%
35 DANLC -2.12%
36 STEELEDGE -2.30%
37 STEVENRISK -2.90%
38 BOBWINS -3.90%
39 MIKES97707 -3.95%
40 KRISRYDEN -4.00%
41 BIGPIKE -4.01%
42 SEEKSUP -4.35%
43 FINANCIAL ADVISOR -4.63%
44 STANU78 -5.47%
45 FRUCTOSE -5.72%
46 LENTINMAN -6.24%
47 ABH3VT -6.78%
48 CWS9 -6.90%
49 ZEN LUNATIC420 -6.91%
50 SHMOLTON -7.08%
51 NETWORM -7.50%
52 GIFF -7.86%
53 RMIWA -8.01%
54 OLDPRO -8.90%
55 TIMHYMA -9.64%
56 YIELDDUDE -10.04%
57 NSOMNIYAK -10.29%
58 SWANLINBAR -10.57%
59 STIFFLER68 -11.58%
60 JOEINIOWA -11.90%
61 CRKRANZ -12.06%
62 THREES -13.14%
63 AVANDALAY05 -13.16%
64 2MORROWSGAINS -13.68%
65 JSIM -13.74%
66 VALUEMIND -14.44%
67 OTCBARGAINS -14.76%
68 CURLEWS -14.94%
69 NELSON1234 -15.34%
70 TMCAL6 -15.94%
71 KNOWLEDGEISKING -16.52%
72 WORTHYLION -16.79%
73 MSGI -17.96%
74 URSINEUS -18.06%
75 THEALICEMAY -18.40%
76 NUTSABOUTGOLF2001 -19.25%
77 SWB173 -20.83%
78 SWAMPBOOTS -22.07%
79 BUCFAN33617 -25.41%
80 MICHAEL T -26.70%
81 STOCKPEEKER -26.76%
82 DEATHTOTAXES -35.50%

[littlefish]

LBASS (LOL, I like my fish theory so sorry for playing with your name there- hopefully no offense taken), closest I ever came to that athletic stuff was being on a crew team in college:)

PS- I'm sticking with bigpike winning the next one. And of course kudos to the stats guys SSK and Len.

[lbas]

Well Done Researcher. Kudos to you. You nearly lapped the field.

Littlefish, great finishing kick at the end. You must be a distance runner (swimmer?).

Skillz and lentinman, great job. Really enjoyed the contest.

[researcher59]

SSK: great stats as usual .... the 'trades used' statistic certainly confirms the value of making trades .... I used all four of mine.

[researcher59]

Special thanks to SSKILLZ1 and Lentinman for all the hard work they put into these contests as well as the main VMC board.

As a token of my appreciation for their tremendous contributions it's my pleasure to award each of them with an added year subscription to IHUB.

[SSKILLZ1]

% Move Based on # Transactions Used

Commentary: As you can see the People with 0 trades left performed the best, as people with 4 trades left performed the worst. Neither of these are a shock. I don't think the people with 1-3 trades used is an incredibly important stat, but it will be given anyways.

There are many reasons why people who used all their trades fair well, and those who don't use any don't fair very well. Here are two of my Ideas.

1) Trading More if you know what your doing just equals more success when it comes to microcaps. Trading enhances performances just yet another example of this, and another chance for me to knock long-term investing. That is always a good thing in my mind.

2) Some people get off to bad starts get disinterested, and just don't bother, as they feel what the point is.

4 Transactions Left: -8.59%
3 Transaction Left: +1.64%
2 Transactions Left: -0.33%
1 Transactions Left: +3.61%
0 Transactions Left: +4.75%