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:
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/.