Stock Picking (Beat Boho) Contest - V2.0

[ERD50]

The last two times I took a hit in this contest it turned out to pay off in the end. ...

You are behind. It has not paid off. Then you change strategy again. C'mon, admit it, it's a mess!

-ERD50

 

[Boho]

You are behind. It has not paid off. Then you change strategy again. C'mon, admit it, it's a mess!

-ERD50

I'd been gaining faster than the S&P for over a year through hundreds of trades. I recall two trades within the last several months that made people think I messed up until it worked out like I wanted. One of them was:

This is the first time in the contest when I'm all in. Can't buy any more even on margin.

 

[SecondCor521]

To my black-and-white engineering mind, since the title of the thread is "Beat Boho" and the contest is three years long, the only statistic that matters is whether one's rank at the end of the three year period is higher than yours.

I don't wager, but if I did I would probably put real money on nunnun's rank being higher than yours and more than half of the participants at the end of the contest.

I also would wager that after the contest ends, if you're still around the forum, that you'll find some arbitrary metric that puts you in first place. Number of trades divided by the advance/decline line of the NASDAQ divided by butter production in Bangladesh or something.

Emphasis added. The below would be some examples of what I would consider to be arbitrary metrics.

I'd been gaining faster than the S&P for over a year through hundreds of trades. I recall two trades within the last several months that made people think I messed up until it worked out like I wanted. One of them was:

I still don't wager. (Well, a dollar or two on bridge games, but I don't count that.)

 

[SecondCor521]

Now:

VOO $268.65
SPY $292.44

Now:

VOO $274.32
SPY $298.80



Any new thoughts, Boho?

 

[ERD50]

Now:

VOO $274.32
SPY $298.80



Any new thoughts, Boho?

Wowswers!

HEADLINE: Stocks close at record highs ahead of July 4th holiday

This puts the trade at a full 5% down from the buy & hold position.


Will Boho see a pull-back below his short sell point? (cue dramatic soap opera organ music)

If that pull-back occurs, will Boho cover and break even? (cue dramatic soap opera organ music, one note higher)

Or will Boho wait for a larger drop, to turn the trade into a profit, leaving nunnun in the dust? (cue dramatic soap opera organ music, rising another note higher)

Or will Boho miss that drop, and watch the market rise again, leaving that potential profit in the rear view mirror? (cue dramatic soap opera organ music, rising another note higher)

Tune in at the end of each month, to follow this dramatic series of events! (organ makes a descending pattern, resolving at the opening chord).

Hopefully, he will have enough left to purchase some "Cheer" laundry detergent. His "shorts" might need it!

-ERD50

 

[Boho]

Wowswers!

HEADLINE: Stocks close at record highs ahead of July 4th holiday

This puts the trade at a full 5% down from the buy & hold position.


Will Boho see a pull-back below his short sell point? (cue dramatic soap opera organ music)

If that pull-back occurs, will Boho cover and break even? (cue dramatic soap opera organ music, one note higher)

Or will Boho wait for a larger drop, to turn the trade into a profit, leaving nunnun in the dust? (cue dramatic soap opera organ music, rising another note higher)

Or will Boho miss that drop, and watch the market rise again, leaving that potential profit in the rear view mirror? (cue dramatic soap opera organ music, rising another note higher)

Tune in at the end of each month, to follow this dramatic series of events! (organ makes a descending pattern, resolving at the opening chord).

Hopefully, he will have enough left to purchase some "Cheer" laundry detergent. His "shorts" might need it!

-ERD50

https://www.reuters.com/article/us-...d-high-on-rising-rate-cut-hopes-idUSKCN1TY1MV

"The defensive utilities .SPLRCU, real estate .SPLRCT and consumer staples .SPLRCS rose the most among the 11 major S&P sectors as the falling bond yields made stocks that pay high dividends more attractive."

I'm not clear on what causes a drop vs. what causes a rise with defensive buying. Seems to me it would have the same effect and be caused by the same things and the benefit to the defensive buying would be if the defensive stocks have some benefit at the moment beyond what makes them defensive.

Anyway, this is a rise in ALL stocks which complicates things even more.

"Traders currently see a 29.7% chance the Federal Reserve would cut borrowing costs by half a percentage point at its July 30-31 policy meeting, up from the 25% perceived chance on Tuesday and 24% a week ago. A cut of at least a quarter percentage point is viewed as a certainty."

But that's in response to a bad economy. I think right now any buy/sell/short position could work if you sell/buy back/cover at the right time.

 

[OldShooter]

... I'm not clear on what causes a drop vs. what causes a rise with defensive buying. Seems to me it would have the same effect and be caused by the same things and the benefit to the defensive buying would be if the defensive stocks have some benefit at the moment beyond what makes them defensive.

Just curious and more fundamentally: Whatever it means, how would Reuters know that it was happening? Maybe a billion shares traded today? Did they interview all those traders to understand their intent? IMO the financial press is just so much blather.

I tell my investment class that I could go home this evening and write three stories about tomorrow's market. They would start with sentences like: "Investors were spooked by the ECB's interest rate moves yesterday and sold off ..." "Investors ignored the ECB's interest rates moves yesterday and bought enthusiastically ... " and "Concern over the ECB's interest rates move yesterday left investors hanging and the market drifting ..." I could then turn in the one that fit and save the other two for another day.

The writers that I really love start out with something like "Buyers stayed on the sidelines today ..." -- completely ignorant of the simple fact that every trade has a buyer and a seller.

 

[ERD50]

...
I'm not clear on what causes a drop vs. what causes a rise with defensive buying. ...

I agree with you.

... I think right now any buy/sell/short position could work if you sell/buy back/cover at the right time.

I agree again (but Will Rogers beat us to it).

What's your next move, considering you are short and have admitted you don't know how to make a defensive play?

-ERD50

 

[Boho]

What's your next move, considering you are short and have admitted you don't know how to make a defensive play?

-ERD50

I know how to make a defensive play. I just don't know why people are choosing stocks instead of cash right now. I consider them both defensive. 100% cash is the most defensive but you don't have to go all cash. My open orders are:

VOO - VANGUARD S&P 500 ETF Qty: 1600 Buy Limit at $255.50 Current Price: $274.32
SPY - SPDR S&P 500 ETF TRUST Qty: 780 Buy Limit at $282.50 Current Price: $298.80
SPY - SPDR S&P 500 ETF TRUST Qty: 2000 Cover Limit at $291.00 Current Price: $298.80
VOO - VANGUARD S&P 500 ETF Qty: 2000 Cover Limit at $267.00 Current Price: $274.32

I have no other plans.

 

[ERD50]

I know how to make a defensive play. I just don't know why people are choosing stocks instead of cash right now. ....

... I'm not clear on what causes a drop vs. what causes a rise with defensive buying. Seems to me it would have the same effect and be caused by the same things and the benefit to the defensive buying would be if the defensive stocks have some benefit at the moment beyond what makes them defensive.

Anyway, this is a rise in ALL stocks which complicates things even more. ...

The two statements above, plus your 'performance' on this trade seem counter to your assertion that you know how to make a defensive play. Or is this like the Seinfeld quip about the rental car place - "You know how to take a reservation, but you don't know how to keep a reservation, and that's the most important part of a reservation'?

So yep, I guess anyone can make a defensive play, but can they profit from it?

... My open orders are:

VOO - VANGUARD S&P 500 ETF Qty: 1600 Buy Limit at $255.50 Current Price: $274.32
SPY - SPDR S&P 500 ETF TRUST Qty: 780 Buy Limit at $282.50 Current Price: $298.80
SPY - SPDR S&P 500 ETF TRUST Qty: 2000 Cover Limit at $291.00 Current Price: $298.80
VOO - VANGUARD S&P 500 ETF Qty: 2000 Cover Limit at $267.00 Current Price: $274.32

I have no other plans.

So if we don't see some dips of more than 2.6%, you will just ride it out, maybe forever? Of course, me might see a dip like that, no one knows, but I gave examples where it just does not happen, not even a dip at all. It would be interesting to see how many times/% a new high did not experience a 2.6% follow-up dip. Have you analyzed this? Seems you should have some idea of the odds before going all in.

Oh BTW, I believe I need to make a correction to your performance on this trade. It appears VOO went ex-div on the day you shorted it, and announced a dividend of $1.3860, so the B&H benchmark would have an additional 2000 * $1.3860 = $2,772.00, putting you behind by 5.5%, not the 5.0% I reported earlier.

With more divs coming in Sept and Dec. Tick-Tock-Tick-Tock.

-ERD50

 

[Boho]

With more divs coming in Sept and Dec. Tick-Tock-Tick-Tock.

-ERD50

I'm hoping to start buying by late summer. If the market doesn't drop enough by then and there's a trade deal, that would be a problem for me.

 

[Boho]

I gave examples where it just does not happen, not even a dip at all. It would be interesting to see how many times/% a new high did not experience a 2.6% follow-up dip. Have you analyzed this? Seems you should have some idea of the odds before going all in.

I didn't sell and short because of a random high in the market. I sold and shorted because traders were overly optimistic on a certain issue and bought on that, which means I had reason to believe the market was over bought. It happened to be at the same time people thought the market was over valued and a correction was coming and there was tension with Iran and North Korea and it was months into tariffs that were feared to have an effect even months earlier, and a bad economy and a possible impeachment.

 

[ERD50]

I didn't sell and short because of a random high in the market. I sold and shorted because traders were overly optimistic on a certain issue and bought on that, which means I had reason to believe the market was over bought. It happened to be at the same time people thought the market was over valued and a correction was coming and there was tension with Iran and North Korea and it was months into tariffs that were feared to have an effect even months earlier, and a bad economy and a possible impeachment.

Sounds random to me.

There's always a litany of potential pitfalls in the market. What's the expression, "the market climbs a wall of worry"? All those things are known, they are priced into the market to some degree.

Are you doing this with your own money too?

-ERD50

 

[Boho]

Are you doing this with your own money too?

No, but if I was trading with my own money I might make the same trades with a lower percentage of my money than I'm using in the contest. So I don't think I'd have all cash now.

 

[Boho]

I just saw:

503 Service Unavailable

The Stock Simulator is currently offline while we perform necessary backend updates.We apologize for any inconvenience and will have it back online as soon as possible.

Hopefully they're fixing things.

 

[Boho]

Third day with service unavailable. This isn't how normal updates work. There must be a serious problem.

 

[ERD50]

Third day with service unavailable. This isn't how normal updates work. There must be a serious problem.

1st trading day though. Have you contacted them?

-ERD50

 

[Boho]

1st trading day though. Have you contacted them?

-ERD50

Nope. They're not good at responding and they probably don't know when.

 

[Boho]

A health care stock or ETF was my choice of a defensive stock pick not long ago. It would have been nice if I kept it but at least I sold it for a profit. I can't say which stock it was because the game is still down and I forgot. I actually had two. One I bought on some specific company event and the other was for defense.

Now I'm waiting for any non-health care earnings report. I already knew health care could turn out good. I need bad news. And a working simulator.

 

[Boho]

The game is back. My pending trades are still there. Here's the ranking:

Current Rank	Previous day's rank	Account Value (USD)	Today's change in value	Overall%
1. kite_rider	1	$2,351,074.96	$0.00	135.11%
2. Spudd	2	$2,225,442.21	$0.00	122.54%
3. comsecga	3	$2,067,990.01	$0.00	106.80%
4. cfahey27	4	$1,229,615.67	$0.00	22.96%
5. DieWurst	5	$1,203,958.51	$0.00	20.40%
6. wrd58	6	$1,175,034.14	$0.00	17.50%
7. BohoII	7	$1,168,090.00	$0.00	16.81%
8. lbymfreddie	8	$1,160,301.72	$0.00	16.03%
9. wmc1000	9	$1,152,139.22	$0.00	15.21%
10. nvestysly	10	$1,134,409.27	$14.18	13.44%
11. easysurfer	11	$1,133,838.03	$0.00	13.38%
12. covert1	12	$1,075,169.74	$0.00	7.52%
13. RiskyBusinessC2	13	$1,044,478.22	$0.00	4.45%
14. t3ztam3nt	14	$1,002,849.51	$0.00	0.28%
15. guestperson	15	$1,002,000.01	$0.00	0.20%
16. monitorLizzy	16	$1,000,000.00	$0.00	0.00%
17. jmil07	17	$1,000,000.00	$0.00	0.00%
18. consvgmbl	18	$1,000,000.00	$0.00	0.00%
19. dixonge	19	$1,000,000.00	$0.00	0.00%
20. exnavynuke	20	$1,000,000.00	$0.00	0.00%
21. secondcor521	21	$1,000,000.00	$0.00	0.00%
22. natetheb	22	$994,538.83	$0.00	-0.55%
23. underwrite	23	$905,652.08	$0.00	-9.43%
24. sengsational	24	$900,408.90	$0.00	-9.96%
25. KCScubaSteve	25	$881,722.85	$0.00	-11.83%
26. ransil	26	$881,214.58	$0.00	-11.88%
27. lawrencewendall	27	$819,829.48	$0.00	-18.02%

 

[ERD50]

The game is back. My pending trades are still there. Here's the ranking:

Current Rank	Previous day's rank	Account Value (USD)	Today's change in value	Overall%
7. BohoII	7	$1,168,090.00	$0.00	16.81%

Per my calculations, that puts the B&H proxy @:

(1296706)⋅300.65/293 = (1296706 ⋅ 300.65) ∕ 293

≈ $1,330,562 versus your $1,168,090

You have a lot of catching up to do.

-ERD50

 

[Boho]

A couple percentage points from bad earnings, a couple more from no trade deal, and a couple more from more bad earnings is conceivable. At some point within that my four trades would execute and I'd be in good shape.

 

[ERD50]

A couple percentage points from bad earnings, a couple more from no trade deal, and a couple more from more bad earnings is conceivable. ...

No question that it is conceivable. I would not be surprised at all to see that kind of a drop from here. But I'm not going to bet on it, especially with w/o a hedge/protection in place

And you need more than "a couple" percentage points. Your BTC is ~ 3.2% ~ 3.3% below Friday's close.

... At some point within that my four trades would execute and I'd be in good shape.

That point is ~ 3.3%. It might come, it might not. You really should try downloading a decade worth of daily closings for SPY, it would be pretty easy to create a spreadsheet that marks all-time highs that never saw a 3% drop from that high. Just copy/paste a bunch of conditional min/max tests looking forward and backward, with one absolute ref to the bottom/top of the list, one relative ref to that day. I might do it myself out of curiosity, but you're the one placing the bet, you really should be the one doing the homework.

That could be very enlightening. And even if it indicated it was a good bet on average, I sure would not put all my chips on a single bet on it.

Plan B? With a short, you better have an exit plan, or your broker might provide one for you (margin call).

-ERD50

 

[ERD50]

....

That point is ~ 3.3%. It might come, it might not. You really should try downloading a decade worth of daily closings for SPY, it would be pretty easy to create a spreadsheet that marks all-time highs that never saw a 3% drop from that high. Just copy/paste a bunch of conditional min/max tests looking forward and backward, with one absolute ref to the bottom/top of the list, one relative ref to that day. I might do it myself out of curiosity, but you're the one placing the bet, you really should be the one doing the homework.

That could be very enlightening. And even if it indicated it was a good bet on average, I sure would not put all my chips on a single bet on it. ...

I started on this and it wasn't as easy as I thought. Looks like you need some 'memory' in the calculations so that once you go short, you cover only on the first dip. I'll look more later, it seems I should be able to add another column for that, but so far I keep seeming to need a variable to track it, it's kind of a toggle function. I have not used macros in ages, but might try that as a learning process. Or code it in Python.

Or maybe (OK, probably) just take a nap.

-ERD50

 

[Boho]

Here's a stat:

https://www.wsj.com/articles/where-...ng-rise-of-global-stocks-this-year-1500456603

Stock markets go up and down: It is a fact of life. Except in 2017.

Three major stock-market benchmarks in the U.S., Europe and Asia have avoided pullbacks this year, commonly defined as 5% declines from recent highs. Never in at least the past 30 years have all three indexes—the S&P 500, MSCI Europe and MSCI Asia-Pacific ex-Japan—gone a calendar year without falling at some point by at least 5%.

But I don't know what happened to Europe and Asia since then.