Please inspect your forecast for accuracy.
Name, Market, Entry, Avg Range, Direction Forecast
Mark Juviler DJIA 13300 245 down
Jim Sullivan DJIA 13300 245 up
Dennis - 2 pick basket GLD (Gold etf) 82.38 1.377 up
Dennis - 2 pick basket DXY (US Dollar Index) 75.505 0.52 down
Pam - 3 picks POT long vs DIA short - ratio 0.9423 0.036 up
Pam - 3 picks EMC long vs DIA short - ratio 0.1648 0.00528 up
Pam - 3 picks POT Potash Corp long 125.8 6.11 up
Ken McCue SPY 147.73 2.88 up (buy at 10:30AM, Nov 8)
Mike - 5 stockbasket ARAY Accuray 17.29 1.23 up
Mike - 5 stockbasket SUF Sulphco 6.14 0.74 up
Mike - 5 stockbasket CSCO Cisco 30.38 1.009 up
Mike - 5 stockbasket INTC Intel 26.89 0.63 up
Mike - 5 stockbasket ILMN Illumina 54.65 2.41 up
Ilene - FXF (Swiss France etf) 88.45 0.9247 up
Ilene - 2 stockbasket FLR 145.09 8.22 up
Ilene - 2 stockbasket SI (Siemens) 138.09 3.05 up
Ilene - watch only - Chinese Yuan 0.13425 0.0001 up
Tim West 30 year bond futures - USZ7 113 27/32 0.68 down
David Brandman JRJC (Chinese Finance) 38.2 3.38 down
Joe Boccuzzi FXC (Canadian Dollar etf) 108.11 1.05 up
Joe Boccuzzi SLT 25.09 1.38 up
Bob Gifford QQQQ 54.13 1.03278 short
Bob Gifford EEM (Emerging Mkt etf) 157.72 5.66 short
Stan Katz FXE (EuroCurrency etf) 146.78 0.83 short
We have 17 total bets for this month at $2 guess.
12 people at the meeting gave 17 total guesses.
Which means I collected $10 in additional bet money - so the prize pool is $34.
If you have a correction, tell me immediately.
Remember for next month, as we discussed at this meeting, you can use specific criteria to buy and sell, or to sell and buy, just like you would do with a brokerage firm. You can buy-limit, buy-stop, sell-limit, etc. You can be creative, but the idea is to capture the most "AVERAGE RANGES" during the course of the contest.
PORTFOLIO CONSTRUCTION:
Since our picks collectively made money last month and you asked me how I would construct a portfolio of these ideas - I will do my best to show you here although it may be confusing.
The first step is to divide the portfolio into slices. There were 12 people with 17 ideas, so we will divide the portfolio into 17 slices. 1/17 = 5.88% of the portfolio for each slice. That is "one way" to look at it. The other way is to say we will risk 0.588% of the portfolio per position. To achieve and define risk, I will use 3 "average ranges" as the stop loss point. The low-volatility positions will get more capital and the high-volatility positions will get less. For example: Gold via the GLD etf. GLD has 1.67% average range for the past 10 days. 3 times that = 5.01% loss to the stop out point which is where we want to lose .588% of the portfolio. That means the position size should be $58,653. With GLD at $82.38 per share, it means you would buy 712 shares. If you work out the entire portfolio, then we would lose 10% if all the ideas hit their stops. If all the positions hit 3 average range profits, then we would be up 10%.
Last month, for example, the average idea gained 0.36 ranges. Additionally, had we stopped out any idea that hit a loss threshold of 3 times its average range, then the group average would have been 1.76 ranges. 1 range = $4125, so the profit to the portfolio was 1.76 x 4125 = $7260 or 0.726% return for the month. Annualized return = 8.712%
So, why does 1 range = $4125? Because we had 8 guesses = split the 10% worst case monthly loss into equal pieces to make each position lose 1.25% for the portfolio. 1.25% of 1 million = 12,500. We furthermore want to stay in a position as long as it hasn't gone against us by 3 average ranges, so divided the $12,500 by 3 to determine the value of an average range. 1/3 of $12,500 is $4,125.
For next month I think we may just decide to do a round-table discussion of ideas. Mark Juviler might be available to give a short presentation on programming with tradestation and I'd be happy to do a review of QCharts. Mark has a laptop with wireless connectivity that would be helpful to show you the features and power of the software. Ken McCue has a speaker that could enlighten us about credit default swaps. Ken heard the presentation and he believes we would enjoy it.
For all of you interested in learning more about silver, I'd suggest you watch Jason Hommel on the video above courtesy of the link with YouTube to his "reasons why silver will double" or any other video by Jason Hommel. His website is http://www.silverstockreport.com and to view all of his past jewels of advice http://silverstockreport.com/ssrarchive.htm
To learn more about the fraud, search for Ted Butler Market Commentary at Google.
Have a great month!
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2 comments:
Ilene asked me in an email: "By the way, did you notice Siemens went up >12% today. I hope you calculate that from yesterday's close."
To which I replied the following in an email "Hi Ilene, Some big gap up in SI yesterday – fantastic.
Unfortunately I didn’t see the gap when I posted to the blog = I have to use the first available “entry” price from the time of the meeting, which for us would have been the opening price yesterday at 150.57. A great call you have made on Siemens."
TLT for 20 YEAR BOND
As of Nov 7th close, the average 10-day range that day was 0.727 and the market opened on Nov 8th at 90.65. As of now, Sunday Nov 18 with TLT at 92.41 = a loss of 1.76 pts = 2.42 average range loss for this idea to sell short BONDS. And this is using a 20 YR bond proxy as opposed to a 30 YR bond.
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