SSP's performance

[jeff]

looks like SSP could be wrong many many times, but when it caught 2 or 3 big fish, SSP's total performance will be completely changed.

since SSP had been wrong many times, and lots of times even with big losses, always buy high sell low, i lost confidence in SSP and stopped follow it. hence i also missed their recent nice picks. 

I wonder how others are doing?

[bryanmcn]

Hi Jeff
My account is up but no where near the performance of the SSP portfolio. The main problem I have is the risk that they take.

With a portfolio of some size (over $100k) and with the small price of the stocks they pick, we have to buy large volumes (over 10k shares) and that means large risk. For example a stock like HRG easliy moves 10% in a day so the draw downs are hard to handle psychologically. Increase the portfolio size and the stress level rises exponentially!

Maybe consider using a smaller account (like around $10K) and position size small enough so that the fluctuations aren't as big a percentage of your total portfolio. (Of course then you don't get the big gains either).

Bryan

[DCA]

Hi Bryan,

The strange thing about risk is that different people percieve it quite differently.  When I had a large portfolio and things moved up or down 10% in a day I did not worry much.  My main complaint at the time is that on some of the SSP picks my "buy" if I followed exactly would be more than the daily volume in the stock.

In the last year with the acquistion I made of a chunk of Pavac, I find that I worry more about the ups and downs of the little rump of holdings I have left in the public market.

Hi Jeff,

   That rump that I have left, excepting the tax loss debris I am holding has been mainly following V4 blindly since last November.  According to my Quicken I am up 36% in the trailing twelve months.  I have never perfectly followed SSP for long, and I have not in a while explicitly tracked the performance of the SSP picks, but even if I do not quite get the website posted return it has beaten the heck out of other services I have tried.

D

[garilou]

Hi DCA,
For me too, one of the reasons I cannot follow strictly the SSP strategy is the volume problem that we have discussed many times.
Another reason is that it proposes too many stocks that I never buy for ethical reasons: I do not buy gold,coal or sand oil stocks, or any other resources or prospecting stocks that I consider a nuisance for the environment or for the people who live around, (but I do short them when I can), especially when the company says its activities are in Africa!.

As for SSP posted returns, I have paper - or better said spreadsheet - traded them a lot, (strictly with the weighting rules), one can be pretty close, but:
1. they do not count the fees (often negligible I admit), but when there is too little volume, until you manage to get your shares, you may have to pay the fees 2 or 3 times: I always buy full lots.
2. with the weighting system, the volume of each stock depends on that weighting, and on the number of stocks in the portfolio.
When I "spreadsheet" followed them, I "bought" at a certain time of the day, with limit orders that might well have not succeeded, whereas they always use the closing price as reference.
Sometimes, I have done better then their results (it is always like that with paper trading).
If I pretended to have bought the recommended amount of some of the stocks, I stayed pretty close to SSP's returns, but I could see that I could not have bought them at the price I wrote in my spreadsheet,  always because there were not so many shares offered: had I bought to market, I would have paid much more then the closing price for the stock.
And when the order comes by email, sometimes too late in the night to place your order the day before, (but with my super spreadsheet I get the orders much faster), you want to buy right away, but you do NOT know the closing price!
But I find that this volume problem, although still there, is less disturbing then it was when we talked about it 2 years ago.
I do not know if SSP has introduced that factor in its recommendation program.
They had said they would.

About Pavac, I am maybe too curious, but how did you get to acquire "a chunk" of it?
It is not publicly traded. Are you part of the company? or close to it because of your profession?
-.-.-.-.-.-.-.-.-.-.-.

And Hi Bryan,
I agree with you that one should not put all one's portfolio in the SSP strategy, but as I wrote before, when I "spreadsheet" followed one of the portfolio, with 10K$, there were sometimes (rarely) VERY expensive stocks, and with the weighting system, I could not have bought more then 1 or 2 shares!

From all the amounts that I have tried, ideally - if one can affort it - 20 to 25 K$ are better, that is if one wants to follow the strategy stricktly, which I think not many do.

Have a good trading week all, or rest while the MTI is DOWN 

Louise

[DCA]

Hi Louise,

     Working as a consultant for several years gave me good exposure to many engineering/manufacturing firms along the west coast of NA.  Some of the fun things were flying down to California in February to train some staff of a Discovery Channel staff and being forced to eat good meals with fine wine, however, one of the other benifits is knowing what sectors and companies are expanding or cutting back well before it hits the newspapers.

     I would also hear about investment and job opportunities.  Pavac was a client and the timing was right.  So now I run engineering and operations and have invested much of my non-RRSP funds in the company.  This makes it the riskiest investment I have taken since I have put both my money and time into it.

[DCA]

Hi Louise,

     I agree with your assesment on the minimum portfolio size for truly following SSP.

     Since my SSP portfolio has been shrunk to 10% of what it was earlier I can not comment on if the volume issue has been fixed.

     As for general ability to follow SSP result I find that if the buy is issued during a slow movement period of the stock I can buy at a better price than the SSP price, however, if it moves fast I can then be delayed a day or two...

D

[garilou]

Hi DCA,
As for Pavac, my guess was right.
It is less easy to "take your marbles out" than a simple mouse click, but I am sure that with your good judgment, this will be a good investment.
I just hope that the company will not be affected by the not so great recovery of the economy.
But since it is a long term investment, I guess it might be a a better investment as trading on the stock markets!
At least you will also enjoy the time you spend working with them, and the good feeling that you can do something to improve the company's value, what we, simple investors or traders, cannot do, which can be frustating.
 
I do not know enough about engineering, but the products seem to very specialized and innovative.
Good luck!

As for your other reply, I do not quite understand what you mean by: "however, if it moves fast I can then be delayed a day or two..."
I have often read: "Do not run after your stock", but by doing so, I have experienced mixed results: sometimes I missed a good opportunity, other times, I could get the stock at my initial bid and make some profit, because the momentum was still good, other times, I got my stock at my initial bid, but the momentum had changed, and I when I got the shares, the price went lower.

It's not always easy 
Better said, it is never easy...
Louise

[DCA]

I just noted that it has been roughly 6 years since I started somewhat following SSP V4.  So I have attached here a graph printed out of Quicken showing the results with SSP stocks.

In true SSP fashion I have back-dated it a few years showing how my purchases of SSP stocks prior to my knowledge of SSP did.

What should be noted with a comparision of the pre-2006 with the post-2006 part of the graph is while I naturally tended to pick similar stocks as SSP, SSP is better at selling them at the right time.

D

[DCA]

Well it is now seven years and things on Oct. 1 is still itchy.
As can been seen on the attached the last quarter of 2012 managed to turn 2012 into a profit.  Fourth quarter has been generally better.  Once again I am showing a loss on current year to date.

Recent events with DND have been "enjoyable".  Ah, well that is a risk I have known many times with pharmaceutical stocks.  SRPT up 186%, ICAD 148% and VRX up 102% so I think I can survive the -23% that DND is currently at.  Still better than the -100% that this industry sometimes results in.

The average line on the chart is down to 31%.  Graph straight from Quicken.  Includes dividends and commissions, excludes margin interest, data fees and taxes.

D

[burd]

I am still following a SSP momentum portfolio. The tsx market has been horrible since 2008 and It shows in all the SSP portfolios. Does anyone think that the SSP model has stopped working since 2008 or is it just the market conditions. Most mechanical stock picking system do stop working as the ever evolving market changes. As SSP nears is 10 year mark with very impressive returns does anybody think the portfolio's will starts to move again like 2004-2008? or is that it? Any feedback would be appreciated.

Burd

[DCA]

The market does appear to be going sideways right now.  I use about six different strategies and allocate money according to recent performance.  SSP is losing ground, but I have always noted that it does best in a rising market.  I have another "stealth" picking system that is less momentum weighted than SSP and is doing better.  The best is when the same stock appears in the stealth and the SSP.  They, almost always, do the best.  Last year was my first negative year with SSP and this year is so far more red.

Right now options are king.

[burd]

  I did some research on different strategies using Canadian stocks(excluding venture exchange). I used a 14 year backtest of  value/momentum, GARP, small cap value, short term market timing and long term market timing strategies. All the tests show great performance from 2000-2007 and poor performance from 2008-present. Makes sense when the last 7 years have been a bear market. Good news is that things are starting to stabilize and volatility is low. What ever drives the next bull market, I believe the SSP portfolios will roar along to all time highs.

Burd

[fizikz]

Makes sense when the last 7 years have been a bear market.

 

Which bear market would that be? Since 2008, the market has bounced back strongly and made new all-time highs.