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. 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]

Originally Posted by 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!

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%"



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]

Originally Posted by SportsDino

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

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

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]

Originally Posted by SportsDino

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]

Originally Posted by SportsDino

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
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

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]

Originally Posted by SportsDino

Suggest reading the help a bit if you haven't:
Virtual Stock Exchange → Help
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