Value Microcaps Pick Six Lotto 01

[tmcal6]

Len, great analysis.

You simplified a complex analysis. I like to think I understand it, but I'm sure I miss some of the fine points. Statistical analysis is interesting and useful to illustrate important issues, which was the purpose of your analysis. I believe you admitted or recognized up front some limitations of the analysis, which are the inability to take into consideration the roughly 9,800 stocks that were not in the 194 picks, and the true effects of individual due diligence.

You were willing to bet that at least one of the 194 stocks will increase 500-600% and ultimately determine the winner. I agree there is a good chance of that. Any one of us would love to have just one of those stocks in our "pick 6" or in our actual porfolios for that matter. Question is, what is the probability that among the 194 stocks, there is not one that increases by more than 200%? Furthermore, what is the probability that someone has the highest % gainer at the end of 6 months, and still loses due to underperformance of the other 5 picks? I think there is a significant probability.

If you look at the old and new VMC index lists maintained by SSKILZ, in the old list there were only two stocks with gains that materially exceeded, 100%, FORD at 366% and CYDS at 1,158%. I think most of us chose our "pick 6" from stocks that we own, which are stocks that we have done DD and in many cases have been discussed on the VM board. We probably ignored some stocks we hold for Safety/Slow Growth/Dividend reasons and focused on 6-month price appreciation.

I hold all six of my picks. Combined they represent 40.6% of my portfolio, and they are #2, #3, #4, #5, #7 and #11 as ranked percentage weightings. I would bet that is not unusual, because most of us put our money where our mind and mouths lead us.

As a sheep, I certainly don't expect to win this contest. It would be nice, but I agree with you, not likely. I do however want to finish in the top 25%, and do that consistently in future editions of this experiment. If that happens, I am comfortable my portfolio will be doing OK.

Thanks for all your work Sheriff Len.