Stocking Picking Contest - v3.0

[easysurfer]

No idea what happened, somehow the position limits had gotten set to 5%. I re-set them to 100% again.

Hope I'm not being a pest , but noticed that now I can't view the holdings of other contestants. Had no problem the other day. On the rankings page, was able to click to view what holdings everyone had.

I think there is a toggle (chosen by contest creator) to select whether to make portfolios public or not. I think maybe it got somehow defaulted back to not show.

Not that I'd try and use their strategy (I'm stubbornly using my own allocations in index funds), but taking a peek is part of the fun of the contest.

 

[NYEXPAT]

I joined,but won't be playing as it will not let me trade the ETF's and reverse ETF's I would be using.

Never mind, I got it figured out. Will try to start tomorrow if I remember to mimic my real trades.

 

[ransil]

Hope I'm not being a pest , but noticed that now I can't view the holdings of other contestants. Had no problem the other day. On the rankings page, was able to click to view what holdings everyone had.

I think there is a toggle (chosen by contest creator) to select whether to make portfolios public or not. I think maybe it got somehow defaulted back to not show.

Not that I'd try and use their strategy (I'm stubbornly using my own allocations in index funds), but taking a peek is part of the fun of the contest.

I had that problem too, looked everywhere for it.

 

[ERD50]

Universities Producing The Most Nobel Prize Winners tend to not use Indexing in funding their universities - I'm investing in this contest like a NOBEL prize winning university would do and eschew indexing.
2017 rank Institution Country Score
1 Princeton University US 3.25
2 Stanford University US 3.16
3 University of Chicago US 3.00
4 Columbia University US 2.83
5 Massachusetts Institute of Technology US 2.67
6 University of California, Berkeley US 2.25
7 Howard Hughes Medical Institute US 1.94
8 Harvard University US 1.78
9 University of California, Santa Barbara US 1.74
10 Technion Israel Institute of Technology Israel 1.66

.....

This does not include University of Chicago which has 10% of their endowment in hedge funds but another 40% of their portfolio is privately managed and 25% of the remainder is in a absolute return fund with a 1% fee. University of Chicago has underperformed nearly all other endowment funds last 10 years (earning 5.3% per annum).

But does it work for them?

Here's what I found on the Harvard Endowment fund (check my work):

https://www.harvardmagazine.com/endowment-18

1.0878 8.78% < Harvard 9 Year CAGR; the market in the same time was 15.03%
9
2.1328

2.1328 < Total Increase; the market in the same time increase 3.526x

A more conservative 70/30 mix did 2.869; 12.42% CAGR
Even a 40/40/20 (cash) to allow for liquidity for distributions beat @ 2.149 and 8.87% CAGR

It also looks like none of the passive investment profiles had a negative year.

http://bit.ly/2Jaxjj0 <<<< Portfolio analyzer for market returns


Harvard published fiscal year returns:

Ends June 30th
Fiscal 2018 _ _ 10.00% _ _ 2.1328
Fiscal 2017 __ _ 8.10% _ _ 1.9389
Fiscal 2016 _ _ -2.00% _ _ 1.7936
Fiscal 2015 __ _ 5.80% _ _ 1.8303
Fiscal 2014 _ _ 15.40% _ _ 1.7299
Fiscal 2013 _ _ 11.30% _ _ 1.4991
Fiscal 2012 __ -0.050% _ _ 1.3469
Fiscal 2011 _ _ 21.40% _ _ 1.3475
Fiscal 2010 _ _ 11.00% _ _ 1.1100
__________________________ 1.0000

-ERD50

 

[OldShooter]

A few things to remember:


1. It isn't the money managers who won the Nobels. Nobels are irrelevant in this context.


2. Large university endowments hold far more than stocks. For example,land and private equity, which are difficult to value. This makes annual reporting a bit of a game of liars' poker.


3. Admitting to their management that passive stock investing is a winning strategy is an existential threat at least to annual bonuses if not to their jobs. This is a huge impediment to professional managers' willingness to admit that their stock picking activities are little more than rolling dice and flipping coins.

 

[Running_Man]

A few things to remember:


1. It isn't the money managers who won the Nobels. Nobels are irrelevant in this context.


2. Large university endowments hold far more than stocks. For example,land and private equity, which are difficult to value. This makes annual reporting a bit of a game of liars' poker.


3. Admitting to their management that passive stock investing is a winning strategy is an existential threat at least to annual bonuses if not to their jobs. This is a huge impediment to professional managers' willingness to admit that their stock picking activities are little more than rolling dice and flipping coins.

The Nobel Prize endowment fund, stated goal is to achieve a yearly return of 3.5% greater than inflation. Also it is actively managed by a variety of asset managers and they are allowed and encouraged to engage in market timing activity. I find that quite interesting. Pay prizes for research on passive investing with funds earned from active investing.

 

[Spudd]

Hope I'm not being a pest , but noticed that now I can't view the holdings of other contestants. Had no problem the other day. On the rankings page, was able to click to view what holdings everyone had.

I think there is a toggle (chosen by contest creator) to select whether to make portfolios public or not. I think maybe it got somehow defaulted back to not show.

Not that I'd try and use their strategy (I'm stubbornly using my own allocations in index funds), but taking a peek is part of the fun of the contest.

Fixed it.

 

[easysurfer]

Fixed it.

Looks great! Thanks .

 

[easysurfer]

mods - please correct the join contest link

Hi,

Could one of the mods please correct the join contest link on the first post of this thread?

The correct link is the one Spudd originally provided and is:

https://www.howthemarketworks.com/register/152523

Didn't realize I didn't give a more direct link until now ... ooops!

Thanks.

 

[ERD50]

The Nobel Prize endowment fund, stated goal is to achieve a yearly return of 3.5% greater than inflation. Also it is actively managed by a variety of asset managers and they are allowed and encouraged to engage in market timing activity. I find that quite interesting. Pay prizes for research on passive investing with funds earned from active investing.

But does it beat the kind of passive investing that anyone can do? See my earlier notes, seems like even a 40/40/20 Eq/Fixed/cash passive investment beats their fund.

-ERD50

 

[jt999]

My Picks

I'm still tweaking - any thoughts on my picks?

As of Today:

(12%) MercadoLibre (MELI) - growth engine just getting started - Latin America Amazon-like play - latest quarter was fantastic.
(16%) - Home Depot (HD) - better operator than Lowe's and discretionary spending is still strong - such a consistent winner in my portfolio for years + home projects/remodeling season is in full swing.
(7%) - Walmart (WMT) - for defensive purposes in case market goes south
(10%) - Vail Resorts (MTN) - buy a ski resort operator in the spring you ask? Yes. Dividend rate increases - now up to 3% yield - more competition emerging recently to compete with their EPIC pass but still has a place in my portfolio. Look at the 10 year chart.
(9%) - Brookfield Infrastructure Operator - defensive-like MLP with 5% yield.
(14%) - Olin (OLN) - specialty chemical producer - been stuck but chart is flashing uptrend for this low-beta stock. Should be moving north soon.
(7%) - Netease (NTSE) - Chinese gaming stock has been plodding along but when it runs, it really runs - this is my moonshot play - no direct impact from trade skirmish
(15%) - Payments ETF (IPAY) - love this space - some top holdings include PYPL, V, MC.
(10%) - Nvidia (NVDA) - has been punished due to China exposure with trade tariffs impacting business + more muted interest in Bitcoin mining but betting on a rebound from these levels.


On the bubble:
Boeing (BA) - if the contest were ending next year (2020), this would be on the list - too many short-term overhangs to consider for 3 month timeframe.
Aerospace and Defense ETF (ITA) - great performer since the Trump election - 15% gains per annum. With Boeing being the largest holding and Lockheed elevated, taking a pass. My favorite ETF along with IPAY at the moment.
Disney (DIS)- I really want to believe in the magic - have made some good moves lately but can't get behind given the p/e ratio short-term. Would love to see them buy out remaining Hulu stake.
Alibaba (BABA)- would have to see the earnings reports next week to include. But overall, I love this stock.
Lululemon (LULU) - strong growth forecast but elevated P/E creates cause for concern - need to dissect supply chain for China exposure.
Ulta Beauty (ULTA) - my wife and daughter alone spend enough there to put a floor under the stock but need more convincing with strong YTD appreciation - Kylie Jenner affect wearing off?

 

[njhowie]

jt - you're putting way too much thought/effort into it. The beauty of this is that it is meant to be for experimentation. Go wild. You don't have to be sure of anything or choose a conservative approach that you would normally follow.

Just do it. No matter what you choose, you'll learn along the way and can then apply to real life.

 

[jt999]

Thanks Howie. I'll give it a go if I can figure out how to register and set up.

 

[easysurfer]

Since there were no takers, I made a contestant named "lazy_VTSMX_index_fund".
One investment. Namely, Vanguard's Total Stock Market Index (VTSMX) fund and letting it ride for the contest .

 

[ls99]

Since there were no takers, I made a contestant named "lazy_VTSMX_index_fund".
One investment. Namely, Vanguard's Total Stock Market Index (VTSMX) fund and letting it ride for the contest .

I have a good chunk of real change in that!

 

[target2019]

Since there were no takers, I made a contestant named "lazy_VTSMX_index_fund".
One investment. Namely, Vanguard's Total Stock Market Index (VTSMX) fund and letting it ride for the contest .

I was away, and had that thought when I saw the contest.

 

[easysurfer]

I was away, and had that thought when I saw the contest.

The lazy index not for me (too risky for me ), just a "contestant" in honor of nunnun from the previous contest.

 

[NYEXPAT]

The lazy index not for me (too risky for me ), just a "contestant" in honor of nunnun from the previous contest.

That should make it's way down the list pretty quickly!

 

[njhowie]

That should make it's way down the list pretty quickly!

Nope - it's beating most.

 

[njhowie]

Whoever is participating with id Commuter - quick suggestion - not a good idea to hold MINT for this contest ... cash balance is paying 3%, MINT is essentially fixed income/cash alternative at 2.8%. You're better off just keeping it as cash. If you're simply replicating your real life portfolio, then I can understand the MINT position.

 

[easysurfer]

Bo-ho! Bo-ho! Bo-ho!

Glad to see you had a change of heart and decided to join the contest .

 

[Boho]

Bo-ho! Bo-ho! Bo-ho!

Glad to see you had a change of heart and decided to join the contest .

Somehow I was able to join this time but I'm just messing around with this one. I just wanted to view the players. I expect this game to have many of the same problems as the other ones.

 

[easysurfer]

Somehow I was able to join this time but I'm just messing around with this one. I just wanted to view the players. I expect this game to have many of the same problems as the other ones.

So, you just couldn't resist peeking at the other players then. That's a start .

 

[jt999]

Cheers

I'm surprised nobody has commented on the picks I posted on 5/10 in this thread.

Since I posted, MELI's stock price has gone from 557.94 to 595.73...

up nearly 7% in 5 days (earnings report was a few weeks ago).

And NTES is up 5.5% since 5/10...

both very volatile but nice sugar high when they go up.

 

[NYEXPAT]

That should make it's way down the list pretty quickly!

Won't be long now!