Changes To The Leader Board!
We’re heading into the last three months of the first
annual TradingMarkets Stock-Picking Contest. As you may
remember, the contest was open to everyone at the end of last year. All
you had to do was pick five stocks and hold them for the year and if
your portfolio had the highest performance, you would take home a $1,000
prize. One thing we knew ahead of time was that most of the contestants would
outperform the majority of the
“long-only-stocks-only-go-up-if-you-hold-them-long-enough” portfolio
managers. And how did we know this? Because of Rule #2 of the contest
which was…you had to be 5 years old or under to enter.
Without Further Ado, Let’s
Meet Our Contest Leaders
As a point of comparison, you should know that the
average equity mutual fund money manager was up about 12% for the first
nine months of the year.
In third place is a new name: Kristen Chan!
Kristen is up 63.7% for 2003. Not bad considering she’s 4 years old. Not
only can she pick stocks but she’s multi-talented. Piano, dance, and
travel are her fortes. Her parents told us she went to Boston this
summer, Dutch Wonderland, and Hershey Park. When I saw “Dutch
Wonderland,” at first I thought they meant Wonderland Park, which is a
greyhound racing establishment just outside of Boston. For a second
there, I was really, really, really
impressed. Great stock picker, plus a handicapper…she’d get thousands
of marriage proposals when she grew up! But, she’s obviously well raised
and too cultured to be seen at a place that
Don Zimmer used to hang out at when he managed the Red Sox (you
think I hold grudges?). In the meantime, this young lady is on a roll
and is outperforming the S&P 500 by 52% for the year. Nice job, Kristen!
In second place is Nick Rodrigues, or
as he likes to be called: “Mr. Nick.” Mr. Nick’s performance is solid,
as his portfolio has risen 75.6% for the year (and outperforming by over
five times the average MBA/CFA (and whatever other three letter
designations that impress people enough to hand over their money to “professionals” who
take a nice fee for replicating the performance of the SPYs) money
manager. Nick has a bright future, not only as portfolio manager, but
possibly as an athlete, too. His parents made a point of telling us he
bats from the right side. I only wish he had been available for hitting
duties for the Sox on Thursday night when the game went into extra
innings, but you can’t have everything. Keep up the good work, Nick, and
I only have two wishes for you. The first is that you continue to
outperform your money-manager friends by a 5-1 margin, especially the
ones who not only have the impressive titles, but who have also
graduated kindergarten (you’re just one-year away from the latter,
buddy!). And second, if you become major leaguer, you don’t get drafted
by either the Cubs or the Red Sox. Way too painful.
And in first place (again!) is Joseph Hetzer. The
average money manager is up 13% for the first three quarters. Joseph is
up 79.4%. What is more amazing is that the portfolio he picked to start
the year, has kept him in the lead right from the beginning. His big
winner? Nam-Tai
(
NTE |
Quote |
Chart |
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PowerRating), up 232%! How did he know to select this
stock? Well, being a father of a 5-year old, I know it’s sometimes tough
to get straight answers. And Joseph is playing his selection process
close to the vest. But considering he’s beating 99.3% of the money
managers in the world this year, he must be doing something right.
My goal is to get this information out of him before year’s end. But
first we’ll let him finish his first semester of first grade.
Nice job, everyone, and one last note. Most of the
year, my son Dylan was hanging close to last place.
He’s now moved up the pack a bit (a very small bit) and is up 9% for the
year. This performance is amazing considering that he inherited his
father’s ability (or should I say inability) to pick long-term
stocks. Fortunately, he didn’t inherit his father’s inability to hit
fastballs as he’s the only 5-year old in our community hitting hard
pitching over 100 feet in the air (something his father, the coach, is
still working on).
Again, nice job to all our contestants. The next
update will be at year-end, when we crown the 5-year old who kicked the
$*^%*$& out of most of the fund managers on Wall Street.
How To Use The TradingMarkets
Site – Part 2
Last week I mentioned that the TradingMarkets site now has over 30,000
pages of lessons, strategies, commentaries, indicators and more. In an
effort to help you further grow, I’ve begun the process of showing you
how you can better use the site.
In my
last column we looked at how to better use the
TradingMarkets Stock
Scanner, especially to find momentum stocks. This week, I’ll share with
you some of my favorite lessons on the site. I first wrote about these
lessons a couple of years ago and they remain amongst my favorite. Here
they are:
Money Management: Dave Landry’s Four-Part Series, “Money
Management – An In-Depth Look
Pt 1,
Pt 2
Pt 3,
Pt 4 ” In my opinion, money management is more important than
trading strategies. Dave interviewed a number of successful money
managers and traders who shared their best money management techniques.
The other lesson is Mark Boucher’s “My
Best Trailing Stop Techniques.” Both will go a long way to helping
you master this area.
Intermediate-Term Trading: Two from Loren Fleckenstein. “Using
Volume: The Key to Price and Liquidity” and “Calculating
and Using RS Lines For Intermediate Term Traders.” Neither lesson is
for beginners. They’re for those who understand the intermediate-term
trading game and want to review some of the core concepts (with a few
new twists) and key strategies.
Daytrading: Kevin Haggerty has many good lessons (as do others).
If you are looking to expand your daily stock hit and focus lists,
Kevin’s “Trade
Selection: Using Four New TradingMarkets.com Screens” will quickly
get you there.
Swing Trading: “Ten
Tenets of Swing Trading” from Dave Landry. Good solid advice from
the man who literally wrote the book on the topic.
Short Selling: Another from Dave. “Shorting
Stocks: The Art Of Playing Both Sides of the Market,” quickly became
one of the site’s most popular and talked-about lessons. This past year
has taught you that opportunities come on both sides of the market. This
lesson is for those who never shorted a stock. Read it, and in 15
minutes you will know how.
Options: Tony Saliba’s two-part
series on spread trading “An
In-Depth Look at Vertical Option Spreads,
Pt 1,
Pt 2” This lesson remains the most popular options lesson on TM.
Interest Rates: Tony Crescenzi wrote a heck of a lesson (in two
parts) entitled “Trading
Greenspan Pt 1
Pt 2.” This lesson teaches you how to read the Fed and how to trade
ahead of important economic reports and Fed Policy meetings and
testimony.
Psychology:
The Discipline Behind Translating Market Analysis into Results (Pt
1
Pt 2
Pt 3) from Mark Douglas. Mark is one of the true leaders in the
field of performance enhancement for traders, and his lesson helps
bridge the gap between living in the world of possibilities and living
in the world of high-performance trading reality.
Nightly Planning:
Always Plan For Trading Success…The Night Before, Dave Landry.
This lesson really struck a chord with the members. The trading battle
many times is won the night before in your preparation for the upcoming
day. Here is a blueprint to follow.
Interviews: Read my interview with hedge fund legend
Michael Steinhardt. Don’t read it for the strategies. Read into his
words when he talks about what is needed to succeed at trading at the
highest level. This man’s philosophy is not only applicable to trading,
it’s applicable to all professions in life. And it’s the same philosophy
that all men and women who achieved greatness embrace.
Enjoy the above lessons. Read them, learn from them, and most
importantly, apply them to your trading.
Coming Up
CME Pit Trader Rick Burgess will be holding a live 2-day seminar on
trading the e-minis. If you’d like to learn how to trade the indices
directly from this trading veteran, you can find more information
here.
Dave Landry has a new Interactive Swing Trading Course he is releasing in
two weeks. You can find out more about it
here.
Summary
Print out the lessons I referred to above and make them part of your
trading library. We have information on this site that you cannot find
anywhere else in the world. And the majority of it has been written not
by journalists, but by people who actually trade the markets for a
living. With their experience comes wisdom. And the goal is for you to
profit from their wisdom.
Have a great week trading (and the next time you see some “buy and hold”
fund manager brag about the fact that he outperformed the averages by
three percentage points, feel free to send him the returns of Kristen,
Joseph and “Mr. Nick”)!
Larry Connors
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