3SOF

Quote from: eggman11 on April 13, 2007, 09:32:11 AM
David,

Are you going to update the status of the 3 stocks on fire portfolio this weekend? To Re-evaluate and discuss if the current 3 stocks are still the best 3 stocks.

Thanks,

Eric

My plan is to derive the new 3 SOF valuation model for all stocks of the Main Portfolio, and the 3 stocks with the highest estimated share price CAGR for the next 3 years will be the top three holdings of the Main Portfolio that therefore should be the ones bought and held at the 3 Stocks on Fire Portfolio.

But, I had a few problems in deriving NVTL's long term model, because fundamentals changed a lot recently and I need to know if that is a structural change or something seasonal or temporary, and the respective 2007 full year guidance.

Do you know what would be awesome in my opinion? Is to add another column to the Main Portfolio and the 3 Stocks on Fire tables, with the current estimate for the share price CAGR for the next 3 years. That way it would be easy to order holdings in terms of their reward/risk profile.

As far as I can tell SILC is still the most attractive stock in the Main Portfolio, and you're right, then why the hell it isn't present on the 3 Stocks on Fire Portfolio? Because I still need to make the model work for NVTL before knowing for sure that I should replace it for SILC in that portfolio. But, of course, I don't expect you not to own SILC just because it isn't in the Fire Portfolio, just in the Main, since it was obvious from my analysis that SILC was an extremely  attractive holding since the beginning.

I update the analysis on the 3 Stocks on Fire holdings everyday, since they belong to the Main Portfolio too, I don't see why I should make a special update for them.

The road map is to apply the new valuation model to all stocks of the Main Portfolio (the candidates too, of course) and then order the stocks from the highest to the lowest estimated share price CAGR and then hold the top 3 stocks at the 3 Stocks on Fire Portfolio.

This will take some more days, but it is being done, please be patient, it's not easy to know which ones are the best, for me they're all great, that's why I own them all.

Thanks for your suggestion.

In the 3SOF portfolio, according to your CAGR model, shouldn't GIGM be replaced with SILC.

Based on yesterday's closing prices:

GIGM Current price $14.41 Optimal selling price - $42.64     potential gain - 296%
SILC  Current price $23.49 Optimal selling price - $116.46   potential gain - 498%

I didn't do a comparison with the other stocks in the portfolio against the selling price of the 3SOF portfolio. There might be other cases like this.

I know you mentioned that you are considering adding the model data to the portfolio chart.

Quote from: eggman11 on April 17, 2007, 10:09:46 AM
In the 3SOF portfolio, according to your CAGR model, shouldn't GIGM be replaced with SILC.

Based on yesterday's closing prices:

GIGM Current price $14.41 Optimal selling price - $42.64     potential gain - 296%
SILC  Current price $23.49 Optimal selling price - $116.46   potential gain - 498%

I didn't do a comparison with the other stocks in the portfolio against the selling price of the 3SOF portfolio. There might be other cases like this.

I know you mentioned that you are considering adding the model data to the portfolio chart.

Yep, Ramsburg is working on that as I write, we expect it to be ready tomorrow or so. Then the stocks in the 3 Stocks on Fire Portfolio will be the ones with the highest profit potential in the Main Portfolio, given the difference between the current market price and the optimal selling price given by the valuation model.

Quote from: David Randolph on April 17, 2007, 11:28:17 AM

Quote from: eggman11 on April 17, 2007, 10:09:46 AM
In the 3SOF portfolio, according to your CAGR model, shouldn't GIGM be replaced with SILC.

Based on yesterday's closing prices:

GIGM Current price $14.41 Optimal selling price - $42.64     potential gain - 296%
SILC  Current price $23.49 Optimal selling price - $116.46   potential gain - 498%

I didn't do a comparison with the other stocks in the portfolio against the selling price of the 3SOF portfolio. There might be other cases like this.

I know you mentioned that you are considering adding the model data to the portfolio chart.

Yep, Ramsburg is working on that as I write, we expect it to be ready tomorrow or so. Then the stocks in the 3 Stocks on Fire Portfolio will be the ones with the highest profit potential in the Main Portfolio, given the difference between the current market price and the optimal selling price given by the valuation model.

Now that you have the new data in place. Are you going to update the 3SOF portfolio soon? Will you make regular updates to the portfolio? Possibly twice a week or something.

David,
  I understand the strategy you'd like to apply to the 3SOF portfolio as the 3 ones with the
highest potential out of the bunch in the Main. Does this imply you defy the idea of any short term trading in this portfolio as well?

  I thought playing with small capital and using stocks that are experiencing a technical explosion for whatever reason, may bring some short-term gains and, for some, help establish a more substantial capital. You'll always have new and current subscribers with modest investment amount that may need help to get on their feet.

  Could you please explain your exit strategy for the 3SOF portfolio picks and also reasons why you don't want to make short term trades as you've done in the past in this portfolio?

Thank you.

QuoteNow that you have the new data in place. Are you going to update the 3SOF portfolio soon? Will you make regular updates to the portfolio? Possibly twice a week or something.

Ok, every Tuesday and Friday I'll write a post about the 3 Stocks on Fire Portfolio holdings and strategy on this thread.

QuoteDavid,
  I understand the strategy you'd like to apply to the 3SOF portfolio as the 3 ones with the
highest potential out of the bunch in the Main. Does this imply you defy the idea of any short term trading in this portfolio as well?

Yes, no short term trading in the 3 SOF Portfolio.

QuoteI thought playing with small capital and using stocks that are experiencing a technical explosion for whatever reason, may bring some short-term gains and, for some, help establish a more substantial capital. You'll always have new and current subscribers with modest investment amount that may need help to get on their feet.

The best way for a small account to grow is to own the top 3 holdings of the Main Portfolio, that is, the 3 Stocks on Fire Portfolio. You say "playing" with small capital. That's not a way to grow a small account, most probably it is a way to lose one's money. If a small investor wants to be a bigger investor, the best way to do it is to start thinking and acting like big (or experienced) investors do.

QuoteCould you please explain your exit strategy for the 3SOF portfolio picks and also reasons why you don't want to make short term trades as you've done in the past in this portfolio?

There are two ways of selling the 3 Stocks on Fire Portfolio stocks:

1) The stock is also sold on the Main Portfolio;
2) There's a better stock (in terms of expected share price CAGR, or in terms of % to exit) in the Main Portfolio that will replace the existing stock

Reasons not to make short term trading?

1) There's a lot more stress and work involved in short term trading;
2) Results are good when my "hand is hot" and bad when my "hand is cold", in a never ending boom and bust cycle. 3 years from now the strategy of holding the top 3 stocks of the Main Portfolio would beat all my short term efforts, I have no doubt about it.

Honestly, just talking about short term speculation makes me sick, you have to let me grow as an investor.

Thank you

Thanks, David for the right to the point answers, as always!

In fact, short term trading makes me feel sick as well, in both cases, when I lose and when I win. I do value the effort in becoming a wise trader rather than a minute speculator. This is a great community to learn this. Hopefully, with the help of some of the silly questions, like mine, you'll be able to better see that what you do is right. 

For now, I will continue training my emotions to react like Jesse Livermore stated in the post that you made today, "reverse the fear and hope when they feel very natural".

There's another bad habit that I need to get rid of: smoking. As I was smoking a cigarette looking to the sea, it came to my mind that, when at short term trading, you're working for the market, instead of letting the market work for you.

I retired from short term trading. It's time to relax, study and apply a method to buy and hold the big winners of the future.

Quote from: David Randolph on April 18, 2007, 11:39:23 AM

QuoteNow that you have the new data in place. Are you going to update the 3SOF portfolio soon? Will you make regular updates to the portfolio? Possibly twice a week or something.

Ok, every Tuesday and Friday I'll write a post about the 3 Stocks on Fire Portfolio holdings and strategy on this thread.

QuoteDavid,
  I understand the strategy you'd like to apply to the 3SOF portfolio as the 3 ones with the
highest potential out of the bunch in the Main. Does this imply you defy the idea of any short term trading in this portfolio as well?

Yes, no short term trading in the 3 SOF Portfolio.

QuoteI thought playing with small capital and using stocks that are experiencing a technical explosion for whatever reason, may bring some short-term gains and, for some, help establish a more substantial capital. You'll always have new and current subscribers with modest investment amount that may need help to get on their feet.

The best way for a small account to grow is to own the top 3 holdings of the Main Portfolio, that is, the 3 Stocks on Fire Portfolio. You say "playing" with small capital. That's not a way to grow a small account, most probably it is a way to lose one's money. If a small investor wants to be a bigger investor, the best way to do it is to start thinking and acting like big (or experienced) investors do.

QuoteCould you please explain your exit strategy for the 3SOF portfolio picks and also reasons why you don't want to make short term trades as you've done in the past in this portfolio?

There are two ways of selling the 3 Stocks on Fire Portfolio stocks:

1) The stock is also sold on the Main Portfolio;
2) There's a better stock (in terms of expected share price CAGR, or in terms of % to exit) in the Main Portfolio that will replace the existing stock
Reasons not to make short term trading?

1) There's a lot more stress and work involved in short term trading;
2) Results are good when my "hand is hot" and bad when my "hand is cold", in a never ending boom and bust cycle. 3 years from now the strategy of holding the top 3 stocks of the Main Portfolio would beat all my short term efforts, I have no doubt about it.

Honestly, just talking about short term speculation makes me sick, you have to let me grow as an investor.

Thank you

I totally agree with you about holding for the long term. You previously stated" b]2) There's a better stock (in terms of expected share price CAGR, or in terms of % to exit) in the Main Portfolio that will replace the existing stock[/b] " Doesn't this mean that SILC should replace GIGM? (NVTL is currently unknown) and if so when would the change be made? would changes only be made on the Tuesday and Friday updates, not including any  fundamental changes.

QuoteI totally agree with you about holding for the long term. You previously stated" b]2) There's a better stock (in terms of expected share price CAGR, or in terms of % to exit) in the Main Portfolio that will replace the existing stock[/b] " Doesn't this mean that SILC should replace GIGM? (NVTL is currently unknown) and if so when would the change be made? would changes only be made on the Tuesday and Friday updates, not including any  fundamental changes.

The problem I have is I don't know if SILC should replace GIGM or NVTL. At today's NVTL update I'll make an effort to derive estimates for that stock, even without all the needed information.

SILC will replace GIGM or NVTL tomorrow in the 3 Stocks on Fire Portfolio. Happy?

Quote from: David Randolph on April 18, 2007, 12:33:12 PM

QuoteI totally agree with you about holding for the long term. You previously stated" b]2) There's a better stock (in terms of expected share price CAGR, or in terms of % to exit) in the Main Portfolio that will replace the existing stock[/b] " Doesn't this mean that SILC should replace GIGM? (NVTL is currently unknown) and if so when would the change be made? would changes only be made on the Tuesday and Friday updates, not including any  fundamental changes.

The problem I have is I don't know if SILC should replace GIGM or NVTL. At today's NVTL update I'll make an effort to derive estimates for that stock, even without all the needed information.

SILC will replace GIGM or NVTL tomorrow in the 3 Stocks on Fire Portfolio. Happy?

Don't change it on my account? I just want to see the 3SOF portfolio get a little more care and attention.    I have a concern about the model. Since stock price is a major factor. Everytime a stock makes a little move up, it might have to be rotated out of the 3SOF portfolio for a laggard with "more potential", because the stock price has went down. I think the 3SOF can't be totally objective, I think it it might ultimately have the be a combination of the model to determine "potential gain" and some subjective analysis to see if the stock in the current enviroment (market, company news and Economy). (i.e. - Stocks is consistantly hitting new highs - blue sky breakout, new contracts are signed, dollar is cheaper)

Thanks

Quote from: eggman11 on April 18, 2007, 12:51:51 PM

Quote from: David Randolph on April 18, 2007, 12:33:12 PM

QuoteI totally agree with you about holding for the long term. You previously stated" b]2) There's a better stock (in terms of expected share price CAGR, or in terms of % to exit) in the Main Portfolio that will replace the existing stock[/b] " Doesn't this mean that SILC should replace GIGM? (NVTL is currently unknown) and if so when would the change be made? would changes only be made on the Tuesday and Friday updates, not including any  fundamental changes.

The problem I have is I don't know if SILC should replace GIGM or NVTL. At today's NVTL update I'll make an effort to derive estimates for that stock, even without all the needed information.

SILC will replace GIGM or NVTL tomorrow in the 3 Stocks on Fire Portfolio. Happy?

Don't change it on my account? I just want to see the 3SOF portfolio get a little more care and attention.    I have a concern about the model. Since stock price is a major factor. Everytime a stock makes a little move up, it might have to be rotated out of the 3SOF portfolio for a laggard with "more potential", because the stock price has went down. I think the 3SOF can't be totally objective, I think it it might ultimately have the be a combination of the model to determine "potential gain" and some subjective analysis to see if the stock in the current enviroment (market, company news and Economy). (i.e. - Stocks is consistantly hitting new highs - blue sky breakout, new contracts are signed, dollar is cheaper)

Thanks

David,

I posted this yesterday. Any thoughts?

Thanks

Quote from: eggman11 on April 19, 2007, 09:01:56 AM

Quote from: eggman11 on April 18, 2007, 12:51:51 PM

Quote from: David Randolph on April 18, 2007, 12:33:12 PM

QuoteI totally agree with you about holding for the long term. You previously stated" b]2) There's a better stock (in terms of expected share price CAGR, or in terms of % to exit) in the Main Portfolio that will replace the existing stock[/b] " Doesn't this mean that SILC should replace GIGM? (NVTL is currently unknown) and if so when would the change be made? would changes only be made on the Tuesday and Friday updates, not including any  fundamental changes.

The problem I have is I don't know if SILC should replace GIGM or NVTL. At today's NVTL update I'll make an effort to derive estimates for that stock, even without all the needed information.

SILC will replace GIGM or NVTL tomorrow in the 3 Stocks on Fire Portfolio. Happy?

Don't change it on my account? I just want to see the 3SOF portfolio get a little more care and attention.    I have a concern about the model. Since stock price is a major factor. Everytime a stock makes a little move up, it might have to be rotated out of the 3SOF portfolio for a laggard with "more potential", because the stock price has went down. I think the 3SOF can't be totally objective, I think it it might ultimately have the be a combination of the model to determine "potential gain" and some subjective analysis to see if the stock in the current enviroment (market, company news and Economy). (i.e. - Stocks is consistantly hitting new highs - blue sky breakout, new contracts are signed, dollar is cheaper)

Thanks

David,

I posted this yesterday. Any thoughts?

Thanks

Any Thoughts on the above. I posted it a few days ago.

You mentioned that you would provide an update for the 3 stocks on fire portfolio on Tuesdays and Fridays. Will it be ready later today?

Thanks

QuoteAny Thoughts on the above. I posted it a few days ago.

You mentioned that you would provide an update for the 3 stocks on fire portfolio on Tuesdays and Fridays. Will it be ready later today?

Thanks

Yes, thanks for the reminder.

Quote from: David Randolph on April 20, 2007, 01:07:39 PM

QuoteAny Thoughts on the above. I posted it a few days ago.

You mentioned that you would provide an update for the 3 stocks on fire portfolio on Tuesdays and Fridays. Will it be ready later today?

Thanks

Yes, thanks for the reminder.

eggman11, you've been doing very well pressing the need for me and Ramsburg to have more love and care for the 3 Stocks on Fire Portfolio, that portfolio page isn't in the same league as the Main Portfolio page and that needs to be fixed.

We need a chart since inception, the closed trades table with the size of each position (of course, you know the positions in options were made with less than 10% of capital, instead of the usual 33.3%, but a new subscriber doesn't know that) and the 3 Stocks on Fire Portfolio page still has the old 3 Stocks menu.

I would like to write a brief history of the Fire Portfolio and its direction for the future, but for that I need the all history chart and the size of all trades.

I'll have to delay this report until Ramsburg makes the necessary changes, probably on Sunday we'll have it here, sorry for this.

But, you know that I update the analysis on all three holdings of the Fire Portfolio (CIMT, GIGM and SILC) everyday on this board, so the problem isn't with each holding, but with the overall strategy and future direction of this small and concentrated portfolio, right?

Give me a couple of more days, again, thanks for raising your voice on this subject.