The Shock Jock : Market Roundup

You give me a royal pain in the ass, if you want to know the truth.

– Holden (J.D. Salinger)

When I announced earlier in the week that I would no longer be commenting on HotCopper, I thought that would be the end of the annoying, low-intelligence comments mostly aimed at some degree of personal character assassination. Frankly, I was starting to get self-conscious about my elbow-patches, pocket protector and the Pyrex test tubes that I carry around in my back pocket. But now it seems that people get a kick out of emailing me those comments to poke me in the eye instead.

I’m ok with it – it’s mostly good fun and my vocabulary is expanding in ways that I had never anticipated. But there was one post on HotCopper today, that I simply cannot resist responding to. Call me weak :

Just out of interest, here are some share price comparisons at the date cbehrenbruch has written a (usually nasty and condescending) post versus price as at today’s date (on average 8% up). Make of it what you will……but I wouldn’t read much into what he has to say. Like a radio shock jock, its easier for him to raise a profile by focusing on and exaggerating the negatives. Pity, because if the blog were more balanced it would probably be worth reading.

Then the following table was produced  (screen snapshot):

 

I love it!

Unfortunately, it’s just not accurate and is a classic example of how remarkably innumerate so many people who pootle about with the stock market actually are. For those punters out there who read my posts and then try to work out what it means for your trading life (an activity, incidentally, I really don’t encourage) I have clarified my position and my “virtual” performance track record so that you can understand it clearly:

ASX Long Tail Sentiment

The rows in green are rows where my sentiment positively correlates with the stock movement since my post (not just the bump on the day). I have permitted myself the “discretion” of allowing no stock-movement (i.e. 0% price change) and a negative sentiment call to be a “positive” correlation, and I don’t think this is a stretch given how illiquid some of these equities are. The orange row for MEB I consider to be anomalous because the 5% “up” is within the statistical variability of the stock since the 1st of May (i.e. it is not a significant variation) but I have transparently called it out lest someone gets their knickers in a twist.

The only two that I cannot claim to have “called” right whatsoever are Cynata and Novogen. I think that’s pretty entertaining because they are both, in my view, the very worst examples of what ASX biopharma has to offer and I would not touch them with someone else’s barge pole. Unfortunately, I cannot rationally explain the share movement for either company based on the progress (ASX announcements) they have made. Notwithstanding the spectacular price movement, I still would not have invested.

Now imagine if you had a fantasy portfolio and you allocated $10,000 to each equity in the table (just on these 13 stocks) – so a total investment pool of $130,000. If you just “went for it” (ten grand on each) and invested per the dates of my blog but completely ignoring me, you would be up by 8%, as the HotCopper dude says. That’s pretty good for a portfolio effect considering some of the amazing swings! If you took a cash preserving strategy and held on to your money except where my sentiments were positive about a company you would be up 8.4% but you would have also exposed only $30,000 of your $130,000 of capital. If you had decided to spread your $130,000 across only my positive sentiments (equally), you would be up 36%.

… Oh, and yes, for those of you are mildly mathematical and are itching to poke me in the eye again, if you had spread the $130,000 across just CYP and NRT, you would be up 40%. If you did, then you are truly a stockmarket genius (or you got a great tip that I didn’t get). I cannot make that claim because it is not my “mock” trading strategy and it’s not in my DNA to invest in companies that I don’t believe in. I do occasionally pick solid bluebirds (like PharmAxis, not in that table incidentally) but prefer not to allocate a disproportionate trade to punts.

By the way, in case you are interested in portfolio strategies (and, like me, are hedge fund managers in a parallel universe). If you had gone out and on a blanket basis taken a simple long position on my positives and shorted on my negatives (including CYP and NRT, which I got wrong) then you would be up 9.6%. That’s a 15% portfolio boost with no leverage.

Get my point?

I guess what I want to know is this. Do I have to be only known as “Shock Jock” or can I be known as “Shock and Awe Jock?” I would prefer the latter if it is ok with you.

Let’s do this again in a year.

 

Awesome Photo Credit: Ryan McGuire. http://www.gratisography.com/.

6 thoughts on “The Shock Jock : Market Roundup

  1. Without a doubt the initial post was crap. And most posters would see it as that. Unfortunately you’ve taken this crap to a higher degree, crapola or crap squared or whatever. I thought your aim was to identify issues with Asx companies rather than get into a big swinging dick competition. I guess I could pick dates of trades which show me to be better than all of you.

    While I’m at it, I resent being called a punter, especially in your reply to Richard Treageus. I regard myself as a long term investor, a part owner of the company. Being called a punter shows, well, a large degree of arrogance on the part of corporate asx biotechs.

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    • Well, Peter – always a joy to hear from you.

      Firstly, I don’t believe I even referred to you in my reply to Treagus. Forgive me if I missed something. My comment about “punters” was because Treagus posted his telephone numbers in a public forum that was being tracked by a couple of hundred HotCopper users. So really, it had nothing to do with you whatsoever.

      Secondly, I merely corrected a factually erroneous table that simply implied (and nothing else) that I was not only wrong, but I was stupid. Wrong I can handle, stupid goes a bit far. I didn’t choose the companies (an incomplete list incidentally) and I didn’t choose any trading dates because I don’t trade on my comments and my comments are not intended to influence trades.

      I also said we’ll do it again in a year (i.e. I am not in the business of benchmarking trades).

      Thirdly, you ARE a punter Peter, because you were happy to throw rocks at me with everyone else. Plus “swinging d–k” is definitely punter talk. Perhaps you’ve been in the trenches too long and forgotten what good old fashioned sarcasm looks like.

      (i.e. on point #3, I am being sarcastic)

      Keep the flack coming, I enjoy it.

      Like

  2. Chris, I can do sarcasm and love it as much as anyone. My point was, in your reply to Treageus, you commented that you had deleted his phone numbers as he wouldn’t want punters contacting him (or words to that effect). I know you weren’t referring directly to me, but If in a a communication from you to a person like Treageus, you call investors punters, what does say about your attitude to people who are long term investors? Not only yours, but also senior corporate figures?

    Anyway must be doing well to get two replies from you! But you do understand that the first table on HC was crap of the first order and your reply compounded that?

    Still enjoying and learning from your blog and off to pleasure myself as its early in the morning for an HC poster. No big swinging d—s here though.

    Like

    • Regarding my use of the word punter – duly noted. I will be more judicious with its use and I accept your feedback.

      Nonetheless I was simply trying to protect his privacy a little and I didn’t see his willingness to provide his personal mobile in a public forum as a Rogers-esq invite to shareholders to have an informal chat.

      Like

  3. Pingback: Cynata Therapeutics : The Flip Flop | The Long Tail

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