Evil Short Monster

[SportsDino]

Splitting off the stock market speculation game from the larger threads, so only people interested in my BS have to read it!

The game is to make a short term guesstimate of what is going to happen, we'll keep a running score of:
Correct, Incorrect

If people want to get more complicated, we can add a portfolio gain score, where you get a fictional million dollars and you assign dollar amounts to your guesses. I'll create a poll for whether people want to try that sort of game.

Even though 'short' is in the title, you can use any sort of financial instrument, even made up ones (if you can satisfactorilly describe it and the group decides it makes sense). Time limit is the only rule, all of your guess need to have a limit of 6 months from when the guess is made, to keep the game short term and able to be scored.

Make sure to surround your guesses with asterisk markers to separate commentary from things you want to have scored.

So to start off:

*****
1. XOM will be worth more than 67.2 in three months.
2. PCZ will be worth more than 23.0 in three months.
3. BP will be worth more than 38.2 in three months.
*****

Disclaimer: if you use this thread as a source of investment advice you are a moron and crazy!

[SportsDino]

*****
In SKF at 110.10, Wednesday 3-18. Expect it will hit 135 by 3-25.
*****

[lighthousekeeper]

OK I just bought 100 shares of SKF. I look forward to the $2500 profit next week. Thx for the guaranteed money!

[Flasch186]

ouch

[lighthousekeeper]

Seriously though, here's my first picks:

*****
1. XOM will be worth more than 0.01 in three months.
2. PCZ will be worth more than 0.01 in three months.
3. BP will be worth more than 0.01 in three months.
*****

i haxor'd this game already!

[SportsDino]

Were you not the one who got hurt by following Top 5 Stock Picks lighthousekeeper? Tsk tsk!

It is already down 5 from my prediction after all!

To make the game actually make sense, all of the hypothetical guesses need to be represented as a buy or sell at a real price (maybe we should put times next to guesses if the post time is not to be trusted).

All of mine so far were buys. And one at least seems to be heading the other way!!! Doh!!! :)

[Flasch186]

i predict, unfortunately, that not enough people will participate seriously in this thread to give it legs...at least not Hannah Storm like legs.

[sterlingice]

I suppose you're probably "playing the game" with real money. Otherwise, I'd say put some sort of constraints on yourself and start out a stock market game or portfolio at Yahoo or something and I'll follow along :)

SI

[Flasch186]

Well GE is popping this morning on the heels of an analyst meeting where theyre going through the books for clarity so of course Contra-Flasch works again. :banghead: tough to complain when I sell in the green but it is frustrating to miss this one because it doesnt look like it's coming back down for a while. BTW now would be a good time to sell :)

[SportsDino]

I could refashion this as the FOFC picks portfolio game, may make more sense. Fake money of course. I will admit I currently have real money on all of my picks in this thread, but may make some predictions I don't back with dollars.

I'm long on GE, I still think it has some upswing on the latest news, but ya there will be profit taking at some point. I did clean up my SSO near the 20.0 spike for some small change (playing a vague hunch things were gonna go up from last week, don't like to spend much on vague hunches or hold onto them very long).

I'll look into creating an imaginary portfolio somewhere that everyone can see without having to do log ins hopefully (or I'll take screenshots).

[lighthousekeeper]

Is there some site where we could have an fofc competition that would basically give us each a starting point of like $100,000 and auto track our gains/losses?

[SportsDino]

I played a site like that back in college (for a finance class competition), trying to remember what it was. Something like marketwatch or what not.

[SportsDino]

Working on setting up something on vse.marketwatch.com, should do the trick. Give everyone an imaginary million bucks, allowing most everything (except trading in stocks below a 1.00 which I might just remove given who knows if Citi is going to be a penny stock soon :P ).

Anyways, will try and provide some lead up time so that there is no claims of any unfair advantages due to someone starting early. Any interest on a start day?

----

In other news, I wish I had shorted Citi on that early morning spike (given that I'm assuming SKF is gonna go up it would be consistent with my overall thoughts). Oh well, can't get too greedy!

[lighthousekeeper]

Working on setting up something on vse.marketwatch.com, should do the trick. Give everyone an imaginary million bucks, allowing most everything (except trading in stocks below a 1.00 which I might just remove given who knows if Citi is going to be a penny stock soon :P ).

Anyways, will try and provide some lead up time so that there is no claims of any unfair advantages due to someone starting early. Any interest on a start day?

----

In other news, I wish I had shorted Citi on that early morning spike (given that I'm assuming SKF is gonna go up it would be consistent with my overall thoughts). Oh well, can't get too greedy!

i'm all for this. perhaps give it a week before starting? hopefully i'll learn a thing or two in the imaginary playground before dumping more real money into shit.

[Flasch186]

I hope you sold your GE today at the highs :)

[SportsDino]

I'm not running one of my long with spikes strategies on GE at the moment. If it stays over 7.5 and maintains dividends I'm ecstatic.... because its sitting in my long portfolio where I am not trying to doubt myself every ten seconds. Along with WMT which spiked over 50 as well, and numerous others that are going up and down with the profit taking and latest news, but nothing really shaking my long term view.

Lets just say I run a complex overall strategy, that varies quite a bit based on the particular play I'm trying to make. For instance, I knew we were due for some profit taking.. rather than change all my bets across my whole portfolio for a short term phenonmenon... I just loaded up SKF on Wednesday and set up short on BAC (at 8.3, gotta love auto trades on open), JPM (27.25), WFC (17.14). I missed the boat on Citigroup, but that is because I get nervous with stocks getting too close to a dollar in value, and it was flat leaving Wednesday while the other three were in the middle of upswings.

So rather than worry about the downturn I knew would be coming in my longs, I isolate my strategy and say: "How best do I extract some value from a short term downswing?" and do not let that interfere with my other plans. I'll likely liquidate these shorts today to avoid worrying about it over the weekend. When I go into next week, I'll have some cash reserves to play with and will probably continue to diversify my longs. If some of my researched guys are really beat on I'll probably pick them up today even rather than risk a weekend turn (give people a few days and you don't know what they are going to do in terms of short term variability).

I really, really think you need to go into your portfolio design with a gameplan, if you chase too much on the latest trend you are going to be playing catch up more often than not. I do have exit strategies for longs, but those are all based on news data rather than price... I'm looking for the overall health of a company, not whether analysts are expecting 1.05 per share or 1.15 per share... acquisitions and jobs are a much better indicator of production/revenues in my opinion, analysts tend to just tell things the companies want you to know or random ass guesses.

----

Actually, I did have a 13.0 spike sell on GE on auto, never got triggered. Maybe I should have set it for 10.5. But that was an 'irrational exuberance' order because I knew hitting 13 would lead to instant profit taking and I'd be able to load up again lower with high confidence.

[SportsDino]

I'm thinking April Fools day is a good time to start the virtual stock exchange game. If you would be interested in playing please give a quick yes/no vote on the upcoming poll.

[sterlingice]

I'll play but probably just to see how everyone else does. I know nothing and don't really plan on being an active player but I want to see others and usually you have to be signed up to do that.

SI

[SportsDino]

Ya, don't feel it has to be uber-competitive. I'll try and post screens for the general audience (and people can join the game whenever, although I'm disabling resets).

The goal is to spur discussion on how the economy works with the game as a backdrop to ask: "why did you just buy SKF?" or why did it work. What are the risks, and so on. It would even be cool if someone ran a conservative portfolio to give us a baseline on what you could do with fixed money investments or index funds with a lot less involvement than playing in equities.

[sterlingice]

I can handle that :)

"Say, what's your average rate of return"
"5%"
"What are you hoping for?"
"5%"
"What about best case scenario?"
"5%"

:D

SI

[SportsDino]

If you have not already, might be a good idea to create an account on vse.marketwatch.com and play with the various widgets they have so you have the basics down.

If you want to simulate the game conditions, give yourself a million, turn on every option, and try out various controls. If you have questions about how to setup a particular transaction I can probably walk you through it.

-----

Crazy investment jabber:

Liquidated all the short banks except for SKF, will settle for a nice 20%+ average on two days. If they continue to fall it will be represented in SKF, but reduces my short term exposure. Lighthousekeeper, if you really did buy some random ass SKF shares on my guess earlier this week you might want to consider locking that in Monday... $1500-2000 is better than waiting to see if I did a good guesstimate on 135.

Overall I'm seeing the upward trend I've been hoping for after the universal hammering of the first quarter. Will certainly be some backsliding here and there, but I think some companies have weathered enough bad news that people understand they are overall going to be fine.

I've taken a beating in trying to build a long portfolio, but after the past couple weeks they are almost all green, and ones I averaged after particularly vicious bad days (that i thought overreactions) have gone gonzo green. GE is my public example, even after the recent losses (up 27% averaged, buys at 11 and 6).

For the first time I am conceiving that the downturn momentum might not carry everything down again. Probably slide a bit, but I think the valleys will be a little shallower going through the second quarter, guess we'll see!

-----

Guess I'll do something new, just for fun.

IAU (gold Trust), I've been whining about inflation and the commodity crash for a long time, but when I look at the gold portion of my long portfolio... its up 30% since a little before the election. Most stocks are down over the same period.

Just wanted to mention that although inflation is just starting to seep back into the news (at least according to my random selection of counters on the word inflation) that I think the turning point was not the recent news, but pretty much clear and present danger of policies being formed last year (the bailout at any cost approach to governance).

Although to be fair, it may more be a result of gold being at its low point for the year. Same with silver, near 50% (with a lower proportion of my money in it, doh).

I've had these for months, but I think I might offload them on the next upswing to shake off the volatility and free up change for picking up growth stocks (I'm trying to figure out who is going to be relevant in 2-3 years, which is hard/risky stuff).

----


Oil is still a complete and utter mystery to me, but i've decided to double barrel XOM with more shares, with every intent of reducing that on the next spike of any note. My whole PCZ/XOM/BP play is based on a rough guess of oil prices bouncing faster than the economy does, and who will have cut the least productive refineries (these are billion dollar assets) while still having production/reserves to cash in on a price increase.

[SportsDino]

Bah government interference destroyed my SKF play, liquidated at 114 (little over 3% gain). Still, made a good amount Friday by jumping out of the banks. Although I guess I should be grateful for a random boost across the board since most of the companies I did pick up Friday went up nicely (but a few I was waiting to study more unfortunately are more expensive now).

Reloading oil on Friday worked out, XOM back up, BP up more, and PCZ skyrocketed from my reload at 24.

March will probably end up as a relatively bullish month. I bought up a lot of stuff at the low point on March 9th, and a bit more at the mini-nader of March 20th... despite the pop in prices looking at the volume I think people are still guesstimating which way things are going to go. Will probably go ahead and buy my strong longs, and leave off the shorting game entirely.

[lighthousekeeper]

Will probably go ahead and buy my strong longs, and leave off the shorting game entirely.

if you short SKF, that's like a double negative, right?

[Flasch186]

SKF IS the short, I dont think you can short it and if you could Im not sure that's smart since, AFAIK, there is an equal and opposite ETF to be long the same sector.

[SportsDino]

Technically you can short the SKF (assuming you can make the trade), but it makes a whole lot more sense to just grab the long fund. XLF is a straight up long fund, UYG is the double leveraged long proshare (or basically the somewhat inverse of SKF, note these are managed funds and not an index).

Probably at the very least you should read:
ProShares ETFs – Ultra Financials – UYG – Overview (http://www.proshares.com/funds/uyg.html)

Obviously UYG is having quite the day, although you would think BAC, C, JPM and others all around 15% that being double leveraged it would be over 15%. Thats how you know it is a fund, and not a simple 2x index.

[SportsDino]

Cleaned up all PCZ at 30.5 earlier, appears a merger going through was cause for the odd price jump (relative to sector). Felt it was a solid company, but don't have enough data on its new owner (SU Suncor).

Currently XOM, BP, and DIG (proshare oil) make up the majority of my oil game. Back to the drawing board on finding emerging companies in the area (PCZ was my bet in that area as a potential growth machine).

[SportsDino]

All right final question before I finish configuring this and sending it out tonight, how long do we want this to run? I think you need at least a couple of months. I don't think any of us are really seeing this as a competition so I think I'll just create a blanket 'year' duration... but if people are interested in a 'winner' we can probably shorten the term so this doesn't drag on too long before you have the chance for claiming victory.

[sterlingice]

Yeah, my thought would be either 6 months, 8 months (until Dec 31st), or just do the full year. Then again, I'm going to just buy something like $1 million in treasury bonds and call it the "steady portfolio" or I could buy an index fund as mentioned previously.

Any thoughts as to which one I should do? I'm leaning towards an index fund as it has an interesting component to it and has a useful purpose as a baseline.

SI

[SportsDino]

At its simplest, an index fund is a bet that the overall market will increase. It does not offer a fixed return (like a CD would for instance). Treasuries have a fixed return from when you buy them, and basically would represent holding cash (or the government debt). They would represent the simplest strategy (i.e. no risk other than inflation eating away at your wealth).

We can easily create a comparison to any particular index fund or treasuries on the fly if we really want to, just look at the DJIA for instance at the time the game starts, the time it ends, and compare the percent gain against our portfolios.

If you are playing the 'low-risk' game, I would suggest treasuries or certain other bonds. Index, despite the media hype, has all the risk of what I do... you are just making a bet over a giant pool of stocks so in theory your risk is diversified, but not eliminated. However it is an easy strategy if you think that in general the price of all stocks within an index will overall go up over a year. Depends on whether you think the economy can keep crashing anymore! I'm personally hoping overall it will not, so an index play might be a good strategy... Just want to make it clear that it is making a guess on the market, as opposed to knowing what your cash flows will be with treasuries.

[sterlingice]

Well, that's what I was trying to decide between- index fund or some sort of bonds. I'm not trying to play this to win- I just wanted to have another "marker" in the pool to rate how everyone else is doing against what I'm doing - either a constant increase or the market default.

SI

[Flasch186]

where am I supposed to go to register?

[SportsDino]

Virtual Stock Exchange - Home (http://vse.marketwatch.com/Game/Homepage.aspx)

I'll give the portfolio login details later today. You won't be able to do much until the start date so you may want to create your own small game to play with the tools.

[lighthousekeeper]

Were you not the one who got hurt by following Top 5 Stock Picks lighthousekeeper? Tsk tsk!

actually, i went in on 2/17 and out on 3/23 up 6.1%, which beat the major indices (and not bad for a 5 week gain). but i do recognize the stupidity of making individual stock plays when you don't have enough knowledge, so i pulled my money out and am pouring it all into beer tents.

[SportsDino]

In my experience, investments in beer ALWAYS beat the markets.

----
Market babble:

Locked in gains on my spike portions of XOM and BP yesterday morning, just under 10% up from initial purchase. Mostly trading in some sure cash which I'll probably use to diversify further... and get back in those stocks at a lower price some point in the future (if there is a weekend downturn). If there is no downturn, well that is the downside of spike selling, but I do still have half my shares in those positions for a long term play. (So I'm happy either way really as long as it continues to trend up)

I don't have confidence in specific banks, but I think if the banks slide the UYG down under the 2.5 or 2.25 range I might grab up some for a spike play. I think its slightly safer to start playing bank upside volatility rather than the downside I've been dancing with so long.

Across the board I've been locking in some money on my fastest growing March 9th longs starting yesterday at open. At least I think are guaranteed for a downswing such as PAAS (3/10 at 13.0, 3/26 at 19.0), TGT (3/9 at 25.5, 3/26 at 34.4), and assorted others. This is purely to get in on profit taking early and reload the exact same position at a discount, likely as soon as next week. For positions I think have been overly battered I'm just holding onto them (say GE), don't want to worry about when I'll reload.

[lighthousekeeper]

In my experience, investments in beer ALWAYS beat the markets.

I've already managed a 25% increase in beer gut YTD!

[SportsDino]

Use the information and directions below to join the game.

Game ID: FOFCChallenge
Game Password: tarptrout

Open this link and read the competition summary:
Virtual Stock Exchange - Home (http://vse.marketwatch.com/Game/StartViewGame.aspx?id=FOFCChallenge)
Click on the 'Join Game' link.
If you are an existing Virtual Stock Exchange member, enter your Email address and Password in the login panel and get set to trade. If you are a new user, follow the link to register - it's easy!
Follow the instructions and start trading!
Join now, and see if you can win my Front Office Football Portfolio Challenge competition! The more participants the higher the level of competition. Can you master the market?


-----

Game starts in two days. Should be interesting times in the market this week, feel free to join at anytime.

[Fidatelo]

I'm in.

[lighthousekeeper]

in

[lighthousekeeper]

bump - i would have thought that more fofc'ers would join in this game - it should be fun.

[Fidatelo]

Is there no way to buy index funds? I can't seem to buy NYA or INDU which is disappointing.

[SportsDino]

The game won't let you get anything until it starts. If you are using a test portfolio and having problems that would suck. I'll try and test it out with a test portfolio tonight see if I can do it.

[sterlingice]

Try to post the ending Dow today so we have an index of how the market has been during the game.

SI

[lighthousekeeper]

awww yeah - we got quiksand to join.

[Flasch186]

for reals though, Ill be buying SDS today, a little bit.

[SportsDino]

I'm having trouble buying an index fund in my test game as well. It seems the software may not be quite as smart as I would like (get what you pay for, which was nothing in this case, so there ya go).

However, it does seem to support Proshares/iShares, go figure (even though they do not appear in the symbol lookup).

Sorry, it really should support the popular index at least, odd that it does not. I'm trying to find a workaround.

I'm going to post the closing S&P, DJIA, and NASDAQ numbers today. For game purposes I'll be using Eastern Time Zone if I ever mention a time.

I'll put those numbers into the game description as well, and update the description with market performance to date every week or so, in case you want to compare to those three. If anyone has some others they want tracked as benchmarks let me know, I'll cover up to a half dozen or so.

I'll try not to spam too much, but I'll put up some basics tonight. I am not allowing resets, so I suggest take your time, don't feel like you need to invest all 1,000,000 right away as soon as it opens. Be careful at the start to make sure you use the trade options correctly so you don't accidentally buy one million shares of Enron!

[SportsDino]

Suggest reading the help a bit if you haven't:
Virtual Stock Exchange → Help (http://vse.marketwatch.com/Game/Help/Overview/Welcome.html)

Couple highlights:
- This is not instant, there are delays (such as 20 minutes) between requesting a trade and it actually being placed. Also the price of the trade fluctuates from where you hit 'buy'. Think of it as a computer broker needs to go buy your shares and he takes the price he can get on the exchange which depends on when he finds a seller. If you are very concerned about short term price fluctuation, I suggest using limit orders, which basically says: buy 100 shares, but only if the price is less than or equal to X. If you use market price, and the price goes from 55 to 1500 in 20 minutes, well you are probably gonna be screwed. That should be rare, but just a warning.

- It trades on US time, so after the bell any orders will be placed tommorrow. Same for weekends.

- It only works on stocks and mutual funds, sorry I can't find a workaround. If you want mutual funds targeting a particular index I can help find them probably. It also does not do government backed securities or bonds, doh. It does do bond funds though, like IMS or MHF (municipal bonds). I know its not exactly the same thing, actually I could go into a long rant on exactly how it is not, but those are the only options we seem to have to play with.

- I can't find the options contracts, so I assume we can't do those either. I swear last time I played this it had more flexibility. Nothing is funner than buying puts, but sadly we can't do that.

If people want a detail breakdown of how the trade gizmo works I'll put up a walkthrough video.

[lighthousekeeper]

Suggest reading the help a bit if you haven't:
Virtual Stock Exchange → Help (http://vse.marketwatch.com/Game/Help/Overview/Welcome.html)
If people want a detail breakdown of how the trade gizmo works I'll put up a walkthrough video.

hmmm you must think we're dumb.

btw, i'm trying to buy 1 million shares of Enron and it's not working - can you help? :)

[sterlingice]

So we don't forget, ending numbers for today:

Dow 7,608.92
Nasdaq 1,528.59
S&P 500 797.87

SI

[lighthousekeeper]

btw: thanks Sportsdino for taking the effort to set this up.

[sterlingice]

Hm... I set up a trade last night which should have gone down by now since it's after 9am, correct? Instead, it's showing as "pending"

SI

[Fidatelo]

Hm... I set up a trade last night which should have gone down by now since it's after 9am, correct? Instead, it's showing as "pending"

SI

Your trade appears to have gone through from what I can see.

That said, the news events about your fund you bought seem to indicate it was being closed down by March 27th? So is it still active? Or will it's price just remain static?

[sterlingice]

D'oh- looks like it went through. And, yes, that was dumb. I was just trying to get a standard S&P 500 Index fund to use as a benchmark for everyone else. I did a quick google search last night but I guess I grabbed an old one. Anyone have a currently active symbol that I could use?

SI

[SportsDino]

Best and Worst S&P 500 Index Funds by Cost at SmartMoney.com (http://www.smartmoney.com/investing/economy/best-and-worst-sp-500-index-funds-by-cost-23549/)

Some of those seem to be valid in the trade gizmo.

Wish I woke up early enough to place market open orders (it wouldn't let me do anything yesterday because it was before start date). Already would have 1-2% probably just buying up some of my public pics.

Have not really built this up yet very smart-like or anything, takes a while to assemble a portfolio. Just thought I'd put my fake money behind some of my previous picks (granted I got into most of these positions at lower cost than this, I still think they are going to trend up overall).

[sterlingice]

That was the exact article I took it from (see how they mention ETrade's in the second paragraph) :p

SI

[Fidatelo]

I just put through my first couple trades, I chose "Day Order" for duration, what does that mean exactly? I hope it doesn't mean it's going to sell it at the end of the day?

[SportsDino]

Day Order should only have an impact if you are using Stop/Limit orders (you set specific prices for the transaction to execute at). If that price condition is not satisfied during the trading day the order is automatically cancelled at the end of the day.

If its good till cancelled, that order will stay in the system until it executes.

If you are not using stop/limit it should not have any real effect.

[Fidatelo]

Ah ok, I don't think I set any kind of limit on it. Thanks, SD.

[SportsDino]

Ignore my heavy trade volume at the moment, testing out functionality with some short term plays (stops, limits, so on). A lot of these will clean up by end of day, but I figure I'll play a little short term volatility and make a buck while seeing the responsiveness of the controls.

One thing to mention, cancel is not very reliable, so again I suggest being very slow in making your transactions. As it is I now have WMT both long and short, doh! So if you have a pending order, beware, even after hitting cancel it can still execute.

[Fidatelo]

My orders have been pending for a long time now, coming on close to an hour I think. Not really the 20 minute response time I read about.

[lighthousekeeper]

made $12,000+ today...not bad for a newbie.

this game's got a reverso-feel to it: when you do well in the game, you kick yourself for not doing that in real life. when you do poorly in the game, you feel good that it's only fake money.

[Fidatelo]

I don't get why my orders didn't go through all day...

[QuikSand]

Wish I woke up early enough to place market open orders (it wouldn't let me do anything yesterday because it was before start date).

Me, too. I tried to buy 150,000 shares of HL last night at 2.00. Dang.

[SportsDino]

The trades depend somewhat on volume, so 150,000 shares might be too much to process for HL at any point in time yesterday. I'm assuming the volume restriction is to prevent trading too much in unrealistic situations.

[QuikSand]

Me, too. I tried to buy 150,000 shares of HL last night at 2.00. Dang.

My problem was that when I had time to fuck around with this thing, our "game" technically had not started yet, so I was banned from doing anything. I believe had I logged on at 9:30am, I woudl have been able to make the trade, but alas.

[Fidatelo]

Looks like my trades went through this morning, not sure why it took so long. Definitely not a case of volume as I bought a total of 600 shares.

[SportsDino]

Not sure why it clunks around so much, obviously its not as responsive or useful as normal tools.

If you make a trade after hours it will wait until tommorrow to do it.

I was caught by the game being locked before the first day as well. Wish I did a little more pre-game prep and testing to warn people of all these quirks.

[sterlingice]

I have a limit order to buy a different index fund if it goes back down to the price it was at on the day we started. Hopefully we don't ever see that and it's all good but I suspect my order will be filled at some point this year

SI

[Flasch186]

In real life I had to buy some more short SDS today on the massive up run. If it should continue tomorrow Im not sure Ill buy more until it gets below 65 but Im feeling good about a short turn gain when this market comes back to earth.

[SportsDino]

I'm slowly getting my portfolio closer to my real life one.

I own about half of those in there now, although the big difference is I bought on March 9th-10th. Obviously there has been a run-up and I've been waiting for downswings to load up, but for simplicity sake I just bought a bunch I'm looking at in the game.

In real life, of those I have:
DIG, MSFT, FUN, GE, XOM, BP, WMT, TGT, SUN, PFE

I've had PAAS, JPM, MCD in the recent past.

Certainly no where near professional yet, but I think I'm going to clean it up a little at a time since right now I'm sort of in maintenance mode on my stocks so its hard to evaluate in the context of the game. (In real stocks my strategy is that the prices are going to stay higher than my intro point, I have no guesses about the current prices or short term behavior, and in fact burned a lot of money the first day on a childish speculation move on Ford/GM).

[SportsDino]

So back to guessing how this market works. We are in a new week, S&P has dropped bout 2%, although that is from a closing Friday spike.

One thing I've noticed, and hate, is financial news sources. If you read from Wednesday to Friday, almost everything is a massively rosy article. If you read today, everything is doom and gloom. Despite that the facts referenced today, was the news released last week (but not commentaried, or explained away in rosy articles)!

Is this a sign of media manipulation of the market? Or do they print articles based on which direction the market last jumped?

In the first, conspiracy most foul!!! In the second, simple minded policy (probably to explain symptoms rather than analyze causes), but with the unfortunate side effect of contributing to one way momentum shifts (i.e. boom/bust patterns).

I've seen this pattern so often (I store half the internet it feels like some days) that I'm certainly curious. It seems we have sort of a short term loop we are running, which is broken by long term events of signifigance (such as quarterly reports) and the occaisonal spike off some random news source (like a government bailout) which is often unpredictable which direction it will push things in.

I will say the general correlation of the market long term is roughly to the quarterly reports, if overall things have gotten better, prices have increased, and when worst, they've exploded... but it is an interesting phenonmenon. At the very least, it increases the tendency to try to time short term market highs/lows, which is fundamentally unsound (coming from an academia perspective), but seemingly a large portion of the industry.

-----

So if the above is true, watch this weeks news and discuss what you see. If the theory holds, it will be mostly negative oriented, and the stocks will truck on down along with it. If that occurs, then the interesting thing to observe is when the news turns back to rosy, and how it does so, in order that we might find out why (does it predict the market or lag it being my chief concern).

[SportsDino]

Apparently the site will cost average for you if you buy the same stock twice (as long as the type of order is the same). Some of my limit orders have executed and it shows only one entry.

This may be confusing if you had an entry that was negative and then is less negative despite the price continuing to be less than you originally remembered entering.

[sterlingice]

My "oh it's fun to keep money in a mattress fund" is in 2nd place :)

I still have a buy order to pick up an index fund when it gets back down to where it was when we started but the S&P is going to have to drop about 7.5% to get back down there.

SI

[Flasch186]

My short took an ass kicking in the game and in real life today. I havnt changed my 1-2 month opinion of the markets however.

[SportsDino]

I'm experimenting with an SKF play in the game (that I am not doing in real-life), I think the banks have risen too far and too fast. My real action lately has been locking in gains from early March with an eye to reload later, and buying small stakes in a variety of places to have more coverage. Thing is I have a time limit on this valley of lowness we're all dreading... I want to have my spots locked up well before the second quarter data comes up.

Right now I'm waiting for the shocker piece of news that will disrupt the big bank circle jerk. Hoping I get wind of it before the general market and can line up a real money short, but until I find something that is more than just my random speculation guess I can't load real money behind it.

Without the SKF/bank plays I think I would be hovering back at 1,000,000 again in game, after losing 25,000 my first day goofing around with things. Still don't like my portfolio set up, but its a weird time to buy right now (I bought my stuff at a massive low, so to me everything seems on the verge of a downturn right now). Eventually I'll have to break down and just match my long portfolio in the game, cause I don't have the brainpower to run separate calculations for real life and game.

[Flasch186]

well since the game is play money I didnt average in to anything and just dumped it all in on HD for an end of year housing stabilization and my short term short. eh, it's a shot I can risk on play money...

in the real world I continue to average into (or attempt to) on my longs and short.

[SportsDino]

So back to commentary, what is going on with the banks?!

My last note was a mention of an experimental SKF gimmick, I basically bought in the game off a random guess, and then went and did some research (obviously I suggest quite the opposite and was burned for 25,000 in funny money!).

So what I learned...

The banks I studied are staggering their charge offs, which is a fine tactic, no point in using up all your red ink all at once!

The surprising thing is inflows being larger than anyone expected, a lot of this in my opinion can be traced to large deals of money from AIG (particularly to some big banks) , and bailout money used to fund mergers, and rearrangement from those mergers being magicked into short term profit (structure profits up in time, push downsides back in time).

When it comes to merger news, when you hear 'higher than expected returns' from the merger, this is almost always the case. Its pretty simple to trace out, even with limited information, as you the benefits from cost reduction and supposed increases in revenue from market share don't appear in the first quarter of the merger!

Now is it bad that banks are showing a profit? A little bit yes, but mostly no. It is a heavilly subsidized profit is the main thing to remember, it is not like overnight these banks went from being morons to financial wizards, rather they have always been badly behaved wizards and with a little bit of muscle from Uncle Sam anyone can finagle a profit out of it. Some economists, and many clueless media commentators and conservative/liberal politicians (and some board members) are perfectly fine with the government basically sponsoring a fairy tale. Ultimately that argument comes down to the essential point 'the sheep are dumb and easily herded' which I cannot disagree with.

The downside to this is without some control or self-restraint we will dig an even deeper hole and cause a bigger bust in the future. As it is, this most recent bust is subsidized most likely by the post baby boomers (and foolish boomers) retirement funds, who most likely took the biggest losses in the stock crash, and probably are not getting their money in at the bottom quickly enough.

So some predictions:
Bank numbers will beat estimates, note most of these estimates are LOW (relative to prior year is the most easily verifiable basis). Bank stock prices will climb slightly after those announcements, and likely plateau (after volatility) at some point over the closing March numbers.

In my opinion, with banks successfully covering their problems (cross my fingers in hopes that they solve them with the extra time), and my earlier statements to the effect of an improving second quarter (see my comments circa February/March is where I got on the coming rebound train)... I think overall the next couple months will be stable to positive (note we already have jumped a large percentage since early March, so we may already have seen the best of the rally, it does not necessarilly have to sustain an upward direction, that is a very short term thinking approach).

My real portfolio was reloaded during a recent drop. Note I incorrectly predicted a short term downswing, and kept waiting for it to do my reloading... and all I managed to do was lock in some of my gains, only to reload at a higher price eventually anyway. Overall its not so bad, basically you need to see that as lost opportunity as really it did not cost me a single cent to do what I did, it just meant I didn't have the long as it was appreciating. That is something I learned a long while back, ignore beating yourself up over the times you should have bought but didn't and missed out, as in the end all that matters is after you buy that it goes up.

A more recent lesson is to not rely on short term volatility to try and game a few extra dollars, when all your data says there is a dominant trend at play. Basically I was complicating my position too much, having a 'this will be a great second quarter relative to the last couple' at the same time as 'I'm betting their is going to be profit taking and a downturn followed by a reversion to my earlier trend'. Although just to be safe I still think I should have liquidated my massive gains over that month, even though it means reloading high (after the news that this may be a sustained rally instead of a rally amongst fear and panic). Sort of back to my philosophy of 'you don't lose money if you always sell when its green and don't get too greedy'. Again, a battle of having the sure money, versus continuing the bet, you can always make another bet later (which is what I did with the reload) even though you are missing the implied opportunistic bet in the middle by just holding your original bet.

I'm in a chatty mood obviously, but I'm sure I could rattle off a few pages on an analysis of splitting one long transaction into multiple transactions over time (and information release), and how the simple common thought would be they are the exact same thing except the second one you are thinking too much, but how they have completely different risk profiles. It boils down somewhat similar to a hand in Texas Holdem, do you go all in on the flop with the 65/35 hand (i.e. buy and hold the long stock for the whole period), or do you bet something less on the flop and bet again or fold on the turn (i.e. buy long, sell on spike, buy again at new price after information event has occurred). Maybe that is too geeky of an analogy, but I'll leave it at that since I doubt anyone really cares.

The main point of this post: Information and its manipulation is a primary bit of knowledge you should be aware of when playing or even just trying to understand the stock market. Ultimately stocks are an abstract representation of cashflows over time, studying how the cash can be manipulated is a useful skill because it can tell you for instance how far a bank can finesse its balance sheet before it will inevitably need to show a bad quarter (and suffer losses in its stock price as a result). And this can all be negated by an odd third party (like the guvmint!) injecting capital into the situation.

[lighthousekeeper]

Current Rank Nickname Net Worth Total Return
1 lighthousekeeper $1,092,758.85 +9.28%
2 QuikSand $1,003,082.70 +0.31%
3 SterlingIce $999,980.10 +0.00%
4 Fidatelo $994,897.30 -0.51%
5 Flasch186 $987,355.10 -1.26%
6 SportsDino $960,094.20 -3.99%



This stock market thingamajig's a piece of cake! 9% return after a couple weeks? Time to take the rest of the year off.

[SportsDino]

That is a good job. If you convert to cash only now you could call it a year, 90,000 is better than most salaries I'm sure.

Meanwhile, I've lost 40,000, I'm practically in the poor house! I should quit before I lose my shirt! :)

[Flasch186]

today should be a good day for me.

[lighthousekeeper]

That is a good job. If you convert to cash only now you could call it a year, 90,000 is better than most salaries I'm sure.

Meanwhile, I've lost 40,000, I'm practically in the poor house! I should quit before I lose my shirt! :)

if i only had a cool million IRL to play with.

[lighthousekeeper]

Am I the only one still playing this? Kinda takes the fun out of kicking everyone's ass if I'm the only guy playing.

[Fidatelo]

I'm still playing, check every day, I'm just unsure of what to do right now.

[lighthousekeeper]

I'm still playing, check every day, I'm just unsure of what to do right now.

pro tip: buy low, sell high

[SportsDino]

I haven't been giving it as much attention as I probably could. I've taken on multiple projects all at once and am knocking them out one by one so I can focus.

Overall, I wish my game portfolio was more diversified to reflect my real portfolio, but I've been too lazy to enter a bunch of transactions. I kind of want to add some commentary when I make picks as well, just to spark much whailing and gnashing of teeth!

[QuikSand]

It's pretty hard to focus on stuff like this when there's nothing really at stake. I have played a number of stock market games before, and it's alluring... but every time I (and most everyone) ends up in the same place, just sitting around.

I've actually been semi-actively watching the markets these last few weeks and have made some real trades, but all I did here was stagger my buy-ins a bit, that's all. Have yet to actually do anything in this game, really, and candidly I probably won't.

So it goes. Get some money on the table, and I'm engaged. Without the money, it's like playing poker for jelly beans.

[QuikSand]

Anyone still following this? One of my holdings (both in real life and in VSE) popped pretty big time this week, and when I sold my real shares, I had a little bell go off about this game, where I hold it (CELG), too.

I guess I'm basically in buy-and-hold mode, as I haven't made any transactions since loading up my VSE portfolio. *shurg*

[SportsDino]

I completely stopped paying attention, I was about 30K in the hole, am now 30K up after doing nothing but sitting on my longs.

Only one down currently in my portfolio is WalMart, which is above my real world entry price of 46.5, and in the game loaded up at the wrong point.

My biggest problem was messing around too much early with gamey behavior instead of replicating my bread and butter strategy and bringing up discussion on the whys and hows.

I will say that a few of my guesstimates are pretty much going as planned:
- My oil prediction holds on BP, XOM, and DIG.
- March was the turning point for the decline, turning off the shorts was the right thing to do even though it made me tons before that. (play the facts, not your past performance...)
- Market still has signs of softness in my opinion because of jobs. The market value on stocks has bounced, but it can't soar unless the true economy pulls its head out of the sand (yes I know folk disagree with me on this point, but it is central to my thinking that it is trend breakers, not trend followers, that define how the economy functions and who is rewarded).

I probably should fire up my involvement again, but I don't really have the time, and it doesn't seem all that exciting or brilliant to just report on 'yep still holding all these stocks I bought back in March'. Never mind it was the against the trend at the time, right now everyone would just think I'm spouting what is common knowledge. The 'fun' is in predicting something that other people don't believe because the 'common sense' tells them one thing... and then the prediction comes through. But I am disenchanted at how rapidly the media and the politicos and companies are quickly forgetting all the lessons they were spouting as being learned during the downturn.

[Flasch186]

nope

I totally forgot about it while doing the real thing. Ive actually continued scaling into my short position since that game started getting hurt all the while but I do believe the S&P goes back down into the 800's (which is a higher level than I first anticipated retouching) but Ive been wrong this whole way. Fundamentals dont mean shit.

[sterlingice]

But I am disenchanted at how rapidly the media and the politicos and companies are quickly forgetting all the lessons they were spouting as being learned during the downturn.

I know this probably isn't the thread to get into this, but it's scared me, too. I figured it would happen but I can't believe how quickly and how easily it's going to happen again.

SI

[QuikSand]

*shurg*

I'm declaring time to sell on Helca Mining (HL), one of my big kills in this game (and personally). Bought at around $2 when we started this thing, it's up north of $6 now and, in my view, pretty overbought. Back when I went long on it personally, I was thinking that a target range of $4.50-$5.50 was reasonable... time to ring the register.

[SportsDino]

Ha, I stole HL from you, I sold off at 3.2, 4.8, and am timing my next exit. I think I'll follow your lead shortly... my model is riding a gold wave at the moment, but you are never wrong if you cash out at the end of the day!!!

[MalcPow]

I'd bet about a billion dollars that Quik will be back on Hecla soon enough. You can't fight true love.

[SportsDino]

Ha, I'd advise against falling in love with a stock, they tend to cheat on you even more than women! Really, these are for the most part imaginary votes of confidence in the cash flows of an entity so far distance from actual cash flows as to be ludicrous at times. Going with the 'load up whenever you know something has to go in some direction' and 'sell whenever it spikes too good to be true while you are in the deep green' has not failed me. You give up the value if it keeps soaring... but avoiding loss is the first goal, and I think throughput of your money actually increases if you can rotate a lot in your portfolio (assuming some of your picks on average are currently underestimated and some of your picks are overestimated, then your profit and edge comes from correcting your estimations faster than the crowd.... on top of accumulation of value of the stock itself over time).