The Misery Portfolio

[MJ DeMarco]

Let's see how we can turn $70,000 into ....

I created a "Misery Portfolio" with a $10,000 investment in each.

Citibank (8264 shares / $2.14 Basis)
Bank of America (2695 shares / $3.71 Basis)
Las Vegas Sands (4587 shares / $2.18 Basis)
AIG (22635 shares / $.4418 basis)
American Airlines (3236 shares / $3.09 Basis)
Ford (5319 shares / $1.88 basis)
GM (4673 shares / $2.14 basis)

March 3rd, 2009
Total Value: $70,000



In one month where will this be?

 

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[LightHouse]

Good question! I'm going to liven the mood up with $100,000 trying to stay optimistic, HAHA.

 

[bflbob]

In one month where will this be?

I'm in at $50,400 for a 28% loss!

 

[MJ DeMarco]

My shining star in this is LVS ... I'm betting the value will be $59,221!

 

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[bflbob]

My shining star in this is LVS ... I'm betting the value will be $59,221!

Sorry....already factored the "good ones" in! :icon_super:

 

[Rawr]

FAS TO $100.

so this to 90k!

Sorry, I just came back from FAS messageboard. We are all drunk there.

 

[Nathan]

What site are you using? Virtual Stock Exchange - Home ?

$62k

 

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[MJ DeMarco]

Value at Close ... 3/4:
$69,460.51

 

[andviv]

In one month?

$63,5667.77

 

[kidgas]

One month, $70,280.

 

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[randallg99]

I am compiling a wish list and none of these companies are on there.... the big kahuna is whether or not any of them become nationalized at which point that 10k for the stock immediately becomes zip

my wishlist is getting long but I started buying starter positions today in NLY and DRYS (again and again)

 

[Edge]

Total value in 1 month? I have no idea.

I do think it is a pretty safe bet that between now and then it will move at least 15% one way or the other. It might move 15% in the next 10 days but come right back to $70k by the time the 30 days is up.

I'd make money on this basket of stocks by understanding that it will be volatile, instead of trying to pick the direction.

 

[MJ DeMarco]

Value at 3/5
$60,561.42

See how this experiment shows how money "disappears!"

 

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[tchandy]

It's bringing back nightmares to when the whole crisis started last year. I saw my account go down, down, down, down, down, down, down, down, and down, etc, etc, etc.

Tom

 

[hakrjak]

What do you want to bet that one of the next big scandals will be:

Why people with 401k's have no mechanism for shorting stocks. They aren't even offered any funds that specialize in shorting the market. Everything is so rah-rah optimistic that it didn't even give these poor sheep a chance to move out of the way of the slaughter. People could have gotten rich with their retirements if only they had this choice.

- Hakrjak

 

[Russ H]

My bet:

In 30 days, MJ will be able to buy a new Lambo with what he has left (pic below).

OK, maybe I'm being overly optimistic-- it might not be a Murcielago . . .

-Russ H.

 

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[bflbob]

Value at 3/5
$60,561.42

See how this experiment shows how money "disappears!"

Crap! I may have been optimistic at $50,400.

 

[camski]

makes you wonder how this would turn out if you shorted all of those stocks instead.

 

[MJ DeMarco]

Value Mar 9, 2009
$59,191.58

 

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[Ron Solo]

almost at the break even point! woo! i really have no idea how this one's gonna turn out. most people will assume down the drain, but hey ya never know right.

 

[MJ DeMarco]

Value: March 12th
$79,260.69

The Dog in the Mix? LVS!

 

[kidgas]

10 trading days under our belts, and it has been a wild ride.

 

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[MJ DeMarco]

Value March 16th
$104,163.17

(Almost 50% Gains in 10 days!)

 

[LightHouse]

halfway through and my optimism has worked haha! We will see how the second half of this month goes. Are you long or short on the positions? (may have been answered, i'm assuming long)

 

[kwerner]

Sell, Sell, Sell!!!
Buy them back in a week or whenever it dips again. Got to ride the waves in this market.

 

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[unicon]

ROI being your greatest indicator it told you to exit, on an annual basis that is 1737% ROI.

Compare that to your savings account at 3 %

If this was real money would you pull the trigger?

The answer is that you would have to as your ROI would be cut in half in the next 10 days even if the stock price remained the same. In other words you would lose 869% just by not exiting.

It took me along time to learn the true importance of the ROI indicator and it cost me alot of money in the past (opportunity cost).

This asks the next question " At what point does one have to exit based upon an ROI number?"

If you cant exit at 1737% what would it be?

My historical computations would force a 100% liquidation of any stock at 3000% annual return.

The computation and exit should be based upon the daily loss of return by holding.

When a stock is going up and the market is going up people lose all consciousness and continue to second guess when to push the button, but computing the annualized return will tell you flat out how foolish you are for not pushing the button.

The next indicator is that a return such as the above that fast is the ideal to exit as the growth happened so fast after the initial purchase and are significant hard dollars. The above was 100% speculative so hedging would not apply, only a clean break.

The point is that the percentage ROI numbers speak so loudly, it also prevents insanity.

 

[CarrieW]

wow... I have been watching this thread and I got to tell ya this is not going how I had presumed lol...

very interested to see where this goes.

I read somewhere that most large gains in stocks happen very quickly (like a few hour rally on a few days over a period of multiple years) and that if you were not in the stock on those days you would have almost no gains at all.

remembering this Id agree with unicorn If this were a real money portfolio.

Idk about closing the whole position tho. Id probably take out just the profit on the trade(leaving my inital investment in tact) or a set percentace and leave something in the trade.

I told my husband exactly what russ posted earlier in the thread. fortunes are made in times like these. you just have to be prepared, watching for, and recgonize the setups. You know what they say luck favors the prepared. damn I wish I was prepared!



cant wait to see the conclusion!

 

[Edge]

Time to sell some calls against the misery portfolio?

 

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[MJ DeMarco]

Wait to you see today's value ... AIG up 50%, BAC 30%, C 45% ...

Great analysis Unicon, Speed+ ... When these gains happen so quickly, the ROI will naturally decline as holding period increases ...

 

[Rawr]

ROI being your greatest indicator it told you to exit, on an annual basis that is 1737% ROI.

Compare that to your savings account at 3 %

If this was real money would you pull the trigger?

The answer is that you would have to as your ROI would be cut in half in the next 10 days even if the stock price remained the same. In other words you would lose 869% just by not exiting.

It took me along time to learn the true importance of the ROI indicator and it cost me alot of money in the past (opportunity cost).

This asks the next question " At what point does one have to exit based upon an ROI number?"

If you cant exit at 1737% what would it be?

My historical computations would force a 100% liquidation of any stock at 3000% annual return.

The computation and exit should be based upon the daily loss of return by holding.

When a stock is going up and the market is going up people lose all consciousness and continue to second guess when to push the button, but computing the annualized return will tell you flat out how foolish you are for not pushing the button.

The next indicator is that a return such as the above that fast is the ideal to exit as the growth happened so fast after the initial purchase and are significant hard dollars. The above was 100% speculative so hedging would not apply, only a clean break.

The point is that the percentage ROI numbers speak so loudly, it also prevents insanity.

But can you really use ROI annual as any indicator at all? Stocks go up and down all the time - so say you are 5% down on the first day you bought - that doesn't mean you will lose 1825% of your money.

Wait to you see today's value ... AIG up 50%, BAC 30%, C 45% ...

Great analysis Unicon, Speed+ ... When these gains happen so quickly, the ROI will naturally decline as holding period increases ...

Well, of course it will, for it to increase the stock has to go up every day more than the previous day - which is impossible long term.

I am holding some of the things in this portfolio btw.