PSL6 RULE MODIFICATIONS:
There will be three modifications to the existing rules for PSL6. I would like to think we have them down pat now, but if the NBA and NFL can still be making changes after 60 years, I suppose we don't have to feel too bad if it isn't perfect yet.
1) Two units can be short. As in the past, a short position must be one of the indexes in the Ibox.
-- The reason for this is because many of us consider the markets to be (up to) very overbought. By having two short positions - both of which are double beta, you could conceivably have 3 longs, 1 cash and 2 (equivalent to 4 units) shorts. Or, for all intents and purposes, 4 short units versus 3 long units. This means you could (for the first time in a PSL contest) be short the market.
2) Maximum of four transactions. A transaction is a trade or unfreeze. We are no longer considering a freeze as a transaction. There is no limit on freezes.
-- The reason for this is because we have come to the conclusion that offensive maneuvers should be treated differently than defensive maneuvers. Trades or unfreezes are offensive because you are gaining a new stock. Freezes are defensive because you are merely protecting gains. In theory, you could freeze all six of your stocks, unfreeze 4 of them (4 transactions) and then re-freeze them. Thus, it is possible to have as many as ten freezes. This will give a lot more flexibility to everyone who wants it.
3) Minimum daily dollar volume of $5,000 traded for the previous three months on any original or new stock. I WILL BE HAPPY TO GIVE YOU THE DOLLAR VOLUME PICKS OF ANY STOCK YOU ARE UNSURE ABOUT.
The reason for this will be made clear. This explanation is not in any way designed as a criticism of anyone. However, it is important to make a link in order to make the point.
The two highest percentage returns that we have had yet in any PSL were in PSL5. DanLC and KIK both had returns of about 155%. It is our intention to mimic, with as much accuracy as possible, the real world trading during any 15 week period for the average VMC'er. 155% is not realistic, even if it is possible.
In both cases, the extreme returns can be chalked up to a single stock. In DanLC's case, it was PASW - which he froze at +460% 11 days into the contest. In KIK's case, it was WSHE - which he froze at +327% 7 days into the contest.
There is certainly nothing wrong with that. However, in order to mimic the group, we simply can't allow stocks that don't trade at least $5,000 per day average in the three months prior to the deadline. I WILL BE HAPPY TO GIVE YOU THE DOLLAR VOLUME PICKS OF ANY STOCK YOU ARE UNSURE ABOUT.
Below is a list of the top-25 stocks by return in PSL5 and the average dollar volume for each during the three months from October 12 to January 12 (deadline for PSL5 picks).
PASW had only $1,000 traded per day on average and WSHE had only $175 traded per day on average before PSL5. Two other stocks, IRAE and TELT would also not have qualified. 1. PASW 480% $ 1,000
2. ABAT 354% 39,000
3. UTVG 208% 33,750
4. VII 197% 31,500
5. TSSW 171% 5,000
6. GSHO 158% 11,500
7. IRAE 150% 4,400
8. WSHE 142% 175
9. DY.TO 116% 11 Million
10. OFI 109% 150,000
11. FSIN 104% 99,000
12. TELT 103% 2,000
13. DPDW 100% 80,000
14. ARSD 98% 105,000
15. TWOC 94% 21,000
16. IAGX 92% 6,000
17. IBIN 90% 30,000
18. AMLJ 87% 5,000
19. URRE 87% 1.4 Million
20. URZ 86% 750,000
21. HOKU 84% 510,000
22. JADE 81% 920,000
23. RNO 79% 1.1 Million
24. HQSB 79% 77,000
25. SLP 79% 194,000
The vast majority of stocks would qualify on the volume requirement, but the two that had the most affect on the outcome of the contest were the two lowest dollar volume stocks - thus, a clear and unmistakeable correlation between extremely low volume stocks and potentially unattainable results by the average VMC'er. Because of this, we are instituting a minimum $5,000 average dollar volume per day requirement in the 3 months prior to May 18th. And, even then, $5,000 is an extremely low number, but one that should eliminate much of the concern.
You can find the average number of shares traded per day for a 3 month period by going to the main stock page on Yahoo for any symbol. Here is the page I'm referring to on MKRS (for example) http://finance.yahoo.com/q?s=mkrs.ob. I WILL BE HAPPY TO GIVE YOU THE DOLLAR VOLUME PICKS OF ANY STOCK YOU ARE UNSURE ABOUT.
One last thing. Once a stock is approved by SSK or myself, it will not be unapproved if the dollar volume were to drop below $5,000 per day before the May 18th deadline. Once approved, always approved.
Len
