Virtual $5,000 portfolio

[Super Stock Picker]

Here I propose to follow a virtual portfolio, as a real life example of the Ultimate Price Momentum v2 portfolio.

This portfolio starts on April, 30th with a capital of $5,000. Commissions are $9.95 per trade.

This exercise is an example of how a small portfolio can take advantage of our recommendations. Of course, the portfolio capital being limited, the positions are relatively small, and it will not be possible to follow the same weighting rule as the ideal portfolio. It would generate too small orders and would loose to much in commissions.

Here is the rule proposed to choose the number of positions in the portfolio. Based on those statistics, it appears that the portfolio holds 4.25 stocks in average, with a historical minimum of 2 and a maximum of 7. In order not to end up with a cash shortage too often, we'll get prepared to open 5 positions of $1,000. If there are less than 5 stocks on hold, we will have sleeping cash, if we have to hold more than 5, we will have to sell part of one or more positions to free cash.

Prices are recorded at the close of the session.

Next posts will show the orders executed to build this virtual portfolio and will keep track of the recorded performances. Updates will be done weekly, on Mondays.

[Super Stock Picker]

So, in this first update, let's see how this $5,000 portfolio is created:

- On the inception date, two stocks were already on hold in the portfolio: VNX (-5.51%) and ABT (+14.39%).
- One stock is to be sold, but we don't care about this one here.
- And three stocks are new buys: TIM, RMX and BLE.

As we have proposed to create 5 positions in this portfolio, we can allocate the amount to invest in those stocks by following our unbalanced weighting rule that takes into account the performance of the stocks since on hold in the portfolio. It is stated in the rules of this virtual portfolio that the weights are not to be rebalanced every week, but it is good to do it as a start.

Let's calculate the weights of each stock:
- VNX = 1 - 0.0551 = 0.9449
- ABT = 1 + 0.1439 = 1.1439
- TIM = 1
- RMX = 1
- BLE = 1

The total of weights being 5.0888, the amount to allocate to each stock is given by the following rule of three:
- VNX = $5,000 * 0.9449 / 5.0888 = $928.41
- ABT = $5,000 * 1.1439 / 5.0888 = $1123.94
- TIM = $5,000 * 1 / 5.0888 = $982.55
- RMX = $5,000 * 1 / 5.0888 = $982.55
- BLE = $5,000 * 1 / 5.0888 = $982.55

With the $9.95 commission fee and the closing prices on that day being TIM $3.47, RMX $2.28, BLE $18.00, ABT $18.20 and VNX $12.52, it would give the following 5 positions:
- VNX: 73 shares @ $12.52, value $913.96, cost $923.91. perf -1.08%
- ABT: 61 shares @ $18.20, value $1,110.20, cost $1120.15, perf -0.89%
- TIM: 280 shares @ $3.47, value $971.60, cost $981.55, perf -1.01%
- RMX:426 shares @ $2.28, value $971.28, cost $981.23, perf -1.01%
- BLE: 54 shares @ $18.00, value $972.00, cost $981.95, perf -1.01%
- Cash: $11.21

Virtual portfolio value is then $4,950.25 from a $5,000 capital. It gives a performance of -1.00% since April 30th, 2007.

[Super Stock Picker]

The value of the reference portfolio (Ultimate Price Momentum v2) on the day of the creation of this thread was 552.45 pts.

[Super Stock Picker]

So, the orders for today are:

Ultimate Price Momentum v2
Action    Ticker     Name
Buy    ML     Mercator Minerals Ltd.
Sell    VNX     Verenex Energy Inc.

One buy order and one sell order will keep the number of open positions to five. Close prices for those two stocks are: VNX $12.96, ML $5.97.

First, we sell our 73 shares of VNX at $12.96. With the $9.95 commission fee, it gives us:
73 * $12.96 - $9.95 = $936.13
That closes our VNX position with the following figures:
VNX: final value $936.13, cost $923.91, final perf +1.39%

Added to the $11.21 free cash we had before, that makes $947.34 to buy the new ML position:
ML: 155 shares @ $5.97, value $925.35, cost $935.3, perf -1.06%
Remaining cash is $12.04.

Now, let's summarize the content of the portfolio. We have the following 5 positions, included the new ML one:
- ML: 155 shares @ $5.97, value $925.35, cost $935.3, perf -1.06%
- ABT: 61 shares @ $21.99, value $1,341.39, cost $1120.15, perf +19.75%
- TIM: 280 shares @ $3.69, value $1,033.20, cost $981.55, perf +5.26%
- RMX: 426 shares @ $2.42, value $1,030.92, cost $981.23, perf +5.06%
- BLE: 54 shares @ $17.35, value $936.90, cost $981.95, perf -4.59%
- Cash: $12.04

Virtual portfolio value is then $5,279.80 from a $5,000 capital. It gives a performance of 5.60% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 591.55 pts from 552.45 pts. Its return is then 7.08%.

[Super Stock Picker]

So, the orders for today are:

Ultimate Price Momentum v2
Action    Ticker     Name
Buy    PAE     Peace Arch Entertainment Group Inc

As we have already our 5 positions open, we have to free some cash in order to be able to buy PAE.
This $5,000 virtual portfolio does not follow the same weighting rule as the Ultimate Price Momentum v2 portfolio so we sell some of the biggest positions in order not to create too small positions. The proposition is to sell $500 of ABT and $300 of TIM. That frees $800 to buy the new PAE position then.

With the close price of $22.99 for ABT and $3.95 for TIM, we do the following sells:
- ABT: 22 shares @ $22.99, value $495.83
- TIM: 76 shares @ $3.95, value $290.25

Adding those two sales plus the cash that was remaining in the portfolio that makes a total of $798.12 to buy the PAE shares:
PAE: 297 shares @ $2.65, value $787.05, cost $797, perf -1.25%
Remaining cash is $1.12.

We have now thw following 6 positions open in the portfolio:
- PAE: 297 shares @ $2.65, value $787.05, cost $797, perf -1.25%
- ML: 155 shares @ $5.97, value $925.35, cost $935.3, perf -1.06%
- ABT: 39 shares @ $22.99, value $896.61, cost $719.75, perf +24.57%
- TIM: 204 shares @ $3.95, value $805.80, cost $717.83, perf +12.25%
- RMX: 426 shares @ $2.35, value $1,001.1, cost $981.23, perf +2.03%
- BLE: 54 shares @ $17.18, value $927.72, cost $981.95, perf -5.52%
- Cash: $1.12

Virtual portfolio value is then $5,344.75 from a $5,000 capital. It gives a performance of 6.90% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 602.10 pts from 552.45 pts. Its return is then 8.99%.

PS: The attached Excel document has been used to get to those figures.

[Super Stock Picker]

So, the orders for today are:

Ultimate Price Momentum v2
Action    Ticker     Name
Sell    ML      Mercator Minerals Ltd.
Buy    FNI     First Nickel Inc.

Please also note that on May 15th, TCM has replaced BLE in the portfolio (the company has changed its name).

Thus, the update is quite simple to do as one position is closed and another one open.

With the close price of $5.69 for ML, we close the position as follows:
ML: 155 shares @ $5.69, value $881.95, cost $935.30, perf -5.70%

Adding the result of this sale plus the cash that was remaining in the portfolio that makes a total of $883.07 to buy the FNI shares:
FNI: 566 shares @ $1.54, value $871.64, cost $881.59, perf -1.13%
Remaining cash is $1.48.

We have now the following 6 positions open in the portfolio:
- PAE: 297 shares @ $2.84, value $843.48, cost $797.00, perf +5.83%
- ABT: 39 shares @ $23.87, value $930.93, cost $719.75, perf +29.34%
- TIM: 204 shares @ $3.39, value $691.56, cost $717.83, perf -3.66%
- RMX: 426 shares @ $2.16, value $920.16, cost $981.23, perf -6.22%
- TCM: 54 shares @ $16.76, value $905.04, cost $981.95, perf -7.83%
- FNI: 566 shares @ $1.54, value $871.64, cost $881.59, perf -1.13%
- Cash: $1.48

Virtual portfolio value is then $5,164.29 from a $5,000 capital. It gives a performance of 3.29% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 584.88 pts from 552.45 pts. Its return is then 5.87%.

PS: The attached Excel document has been used to get to those figures.

[Super Stock Picker]

Quite an easy update today as there are no change in the portfolio this week.

Let's just update the portfolio performances then:
- ABT: 39 shares @ $24.55, value $957.45, cost $719.75, perf +33.03%
- TIM: 204 shares @ $3.52, value $718.08, cost $717.83, perf +0.03%
- RMX: 426 shares @ $2.00, value $852.00, cost $981.23, perf -13.17%
- TCM: 54 shares @ $17.46, value $982.84, cost $981.95, perf -3.98%
- PAE: 297 shares @ $3.00, value $891.00, cost $797.00, perf +11.79%
- FNI: 566 shares @ $1.57, value $888.62, cost $881.59, perf +0.80%
- Cash: $1.48

Virtual portfolio value is then $5,251.47 from a $5,000 capital. It gives a performance of 5.03% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 596.59 pts from 552.45 pts. Its return is then 7.99%.

PS: The attached Excel document has been used to get to those figures.

[Super Stock Picker]

Hello,

A late update this week. Let's go back to Monday and update this thread with the data from that day:

So, the orders for this last Monday were:

Ultimate Price Momentum v2
Action    Ticker     Name
Sell    RMX    Rubicon Minerals Corporation
Sell    PAE    Peace Arch Entertainment Group Inc     
Sell    FNI     First Nickel Inc.
Buy    FNX    Fnx Mining Company

Let's then proceed to the three sales:
- RMX: 426 shares @ $1.85, value $778.15, cost $981.23, perf -20.70%
- PAE: 297 shares @ $2.63, value $771.16, cost $797.00, perf -3.24%
- FNI: 566 shares @ $1.51, value $844.71, cost $881.59, perf -4.18%

Now, we use around $1,000 of our free cash to buy the new FNX shares. Indeed, with our $5,000 capital in this portfolio, we want to be able to open 5 positions of $1,000 as per the rules we have set.
FNX: 26 shares @ $37.19, value $966.94, cost $976.89, perf -1.02%

After those four trades, the remaining cash of the portfolio is $1,418.61.

We have now the following 4 positions open in the portfolio:
- ABT: 39 shares @ $23.39, value $912.21, cost $719.75, perf +26.74%
- TIM: 204 shares @ $3.93, value $801.72, cost $717.83, perf +11.69%
- TCM: 54 shares @ $18.83, value $1,016.82, cost $981.95, perf +3.55%
- FNX: 26 shares @ $37.19, value $966.94, cost $976.89, perf -1.02%
- Cash: $1,418.61

Virtual portfolio value is then $5,116.30 from a $5,000 capital. It gives a performance of 2.33% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 585.40 pts from 552.45 pts. Its return is then 5.96%.

PS: The attached Excel document has been used to get to those figures.

[Super Stock Picker]

Late again this week... Let's go back to Monday and update this thread:

The order for this week was:
Ultimate Price Momentum v2
Action    Ticker     Name
Buy        HF         Hanfeng Evergreen Inc.

From last week, we had $1,418.61 in cash, so let's take $1,000 to open this new position:
HF: 92 shares @ $10.68, value $982.56, cost $992.51, perf -1.00%

We have then $426,10 left in cash.

We have now the following 5 positions open in the portfolio:
- ABT: 39 shares @ $22.86, value $891.54, cost $719.75, perf +23.87%
- TIM: 204 shares @ $3.82, value $779.28, cost $717.83, perf +8.56%
- TCM: 54 shares @ $17.97, value $970.38, cost $981.95, perf -1.18%
- FNX: 26 shares @ $34.31, value $892.06, cost $976.89, perf -8.62%
- HF: 92 shares @ $10.68, value $982.56, cost $992.51, perf -1.00%
- Cash: $426,10

Virtual portfolio value is then $4,941.92 from a $5,000 capital. It gives a performance of -1.16% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 561.45 pts from 552.45 pts. Its return is then 1.63%.

PS: The attached Excel document has been used to get to those figures.

[Super Stock Picker]

Late, late, late... Let's go back to Monday and update this thread:

The order for this week was:
Ultimate Price Momentum v2
Action    Ticker     Name
Sell      ABT         Absolute Software Corp
Sell      FNX         Fnx Mining Company
Buy       PSE         Pacific Stratus Energy Ltd.

So, we first sell the ABT and FNX poisitions as follows:
- ABT: 39 shares @ $23.25, value $896.80, cost $719.75, perf +24.60%
- FNX: 26 shares @ $34.69, value $891.29, cost $976.89, perf -8.69%

Then, we open the new PSE position using the available cash:
PSE: 66 shares @ $14.90, value $983.40, cost $993.35, perf -1.00%

We have then $1,121.54 left in cash.

We have now the following 4 positions open in the portfolio:
- TIM: 204 shares @ $4.15, value $846.60, cost $717.83, perf +17.94%
- TCM: 54 shares @ $18.47, value $997.38, cost $981.95, perf +1.57%
- HF: 92 shares @ $11.24, value $1034.08, cost $992.51, perf +4.19%
- PSE: 66 shares @ $14.90, value $983.40, cost $993.35, perf -1.00%
- Cash: $1,121.54

Virtual portfolio value is then $5,083.00 from a $5,000 capital. It gives a performance of 1.66% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 583.05 pts from 552.45 pts. Its return is then 5.54%.

PS: The attached Excel document has been used to get to those figures.

[bryanmcn]

Why are you holding so much cash? At over 20% of your portfolio it represents the single largest position! Shouldn't you be buying more TIM as per the strategy?

[Super Stock Picker]

bryanmcn,

Here is an extract of the rules we have set in the first post of this thread:

Here is the rule proposed to choose the number of positions in the portfolio. Based on those statistics, it appears that the portfolio holds 4.25 stocks in average, with a historical minimum of 2 and a maximum of 7. In order not to end up with a cash shortage too often, we'll get prepared to open 5 positions of $1,000. If there are less than 5 stocks on hold, we will have sleeping cash, if we have to hold more than 5, we will have to sell part of one or more positions to free cash.

As we only have 4 open positions now, we have a lot sleeping cash ready for the next buy.

Putting more cash in TIM would make a very small order, and we don't want this to happen in a low capital portfolio.

Your remark though would make totally sense in a bigger portfolio. You'll see it in the $50,000 portfolio. This week update is very late but on its way to be released.

[Super Stock Picker]

Right on time, for a change!

So, the order for this week was:
Ultimate Price Momentum v2
Action    Ticker     Name
Buy       WPT        Westport Innovations Inc.

Then, we just open the WPT position using $1,000 from the available cash:
WPT: 377 shares @ $2.62, value $987.74, cost $997.69, perf -1.00%

We have then $223.85 left in cash.

We have now the following 4 positions open in the portfolio:
- TIM: 204 shares @ $5.51, value $1,124.04, cost $717.83, perf +56.59%
- TCM: 54 shares @ $17.24, value $930.96, cost $981.95, perf -5.19%
- HF: 92 shares @ $11.98, value $1,102.16, cost $992.51, perf +11.05%
- PSE: 66 shares @ $14.70, value $970.20, cost $993.35, perf -2.33%
- WPT: 377 shares @ $2.62, value $987.74, cost $997.69, perf -1.00%
- Cash: $223.85

Virtual portfolio value is then $5,338.95 from a $5,000 capital. It gives a performance of 6.78% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 634.81 pts from 552.45 pts. Its return is then 14.91%.

PS: The attached Excel document has been used to get to those figures.

[Super Stock Picker]

This week, let's go back to Tuesday and use the close prices of this session as Monday was the day off for Canada Day.

The order for this week was:
Ultimate Price Momentum v2
Action    Ticker     Name
Sell        TCM       Thompson Creek Metals Company Inc.

So, we just sell the TCM position as follows:
TCM: 54 shares @ $17.40, value $929.65, cost $981.95, perf -5.33%

Now, we hold $1,153.50 in cash.

To summarize, the following 4 positions are open in the portfolio:
- TIM: 204 shares @ $5.65, value $1,152.60, cost $717.83, perf +60.57%
- HF: 92 shares @ $12.13, value $1,115.96, cost $992.51, perf +12.44%
- PSE: 66 shares @ $14.41, value $951.06, cost $993.35, perf -4.26%
- WPT: 377 shares @ $3.19, value $1,202.63, cost $997.69, perf +20.54%
- Cash: $1,153.50

Virtual portfolio value is then $5,575.75 from a $5,000 capital. It gives a performance of 11.52% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 664.16 pts from 552.45 pts. Its return is then 20.22%.

PS: The attached Excel document has been used to get to those figures.

[Super Stock Picker]

Back to the close of Monday's session to update this thread:

The orders for this week were:
Ultimate Price Momentum v2
Action    Ticker     Name
Sell       HF        Hanfeng Evergreen Inc.
Sell       PSE       Pacific Stratus Energy Ltd.
Sell       WPT       Westport Innovations Inc.
Buy        VRS       Allen-Vanguard Corp.

So, we just simply sell the 3 position as follows:
HF: 92 shares @ $12.89 value $1,175.93, cost $992.51, perf +18.48%
PSE: 66 shares @ $14.95, value $976.75, cost $993.35, perf -1.67%
WPT: 377 shares @ $3.00, value $1,121.05, cost $997.69, perf +12.36%

And buy the new one by using $1,000 from the available cash:
VRS: 123 shares @ $8.00, value $984.00, cost $993.95, perf -1.00%

Now, we hold $3,433.28 in cash.

To summarize, the following 2 positions are open in the portfolio:
- TIM: 204 shares @ $6.11, value $1,246.44, cost $717.83, perf +73.64%
- VRS: 123 shares @ $8.00, value $984.00, cost $993.95, perf -1.00%
- Cash: $3,433.28

Virtual portfolio value is then $5,663.72 from a $5,000 capital. It gives a performance of 13.27% since April 30th, 2007.
Over the same period, the reference portfolio, Ultimate Price Momentum v2, as risen to 686.63 pts from 552.45 pts. Its return is then 24.29%.

PS: The attached Excel document has been used to get to those figures.