Start up on $5000 with run away stock, Tim?

[centeron00]

I am new and reading admin's suggestion for start up with various % holdings in say 4 or 5 stocks whether UPM 2 or 4, and my main question is with a runnaway stock like Tim in the mix if i was to follow the instructions i would end up putting around $2800 in Tim and leave some amounts around $550 for other stocks. This seems lopsided and putting too much into one stock and too little on other bets and generally poor balancing. So how to start in this situation? Also does one wait until Monday and what exact time before starting in the first time to buy a portfolio in case there are some sell orders and new buy orders?

From last post on this virtual $5,000 portfolio and although a short time it seemed like mucho work to come up with a -7% return from April to Aug 24. Is there an alternative approach - strategy? I am assuming the huge rebound in Sept is what has turned the return back up (how much?) and appears to be on shoulders mainly of one stock Tim?  thanks

[bryanmcn]

Hi Centeron
Your reasoning is exactly why people should not trade with small mounts of money. $5000 is too little. $50,000 is the minimium because your brokerage fee, even at $10 a trade will cause too much slipage. (See the $5000 virtual portfolio posting.) Also, you will end up buying odd lots that are difficult to get filled.
If you insist on trading with such a small portfolio then you should follow the SSP exactly. Do not question it, don't try to second guess it. Only by trading it exactly will you get close to its performance.
That, as you can imagine, will be very difficult psychologically. Trading is 90% emotion unless you follow a system. The SSP system has shown it will work but you must be able to stomach HUGE drawdowns. (40% is not uncommon).

[owler]

I'm about to enter in with a slightly different strategy. I want to follow the UPM v4 with the next orders but instead of applying the recommanded performance weight ratio distribution, i intended to considere each position as a new one (e.g. default weight = 1 value) to compensate for the actual TIM over representativity in the portfolio that is clearly incompatible with the diversity principle IMHO.

Then, from there, I'll manage to follow the rebalancing rules based upon the virtual 5,000$ portfolio. Since my invest should be of 10k, i assume that is more appropriate to follow the  5k pattern than the 50k. Am I right?

Comments are welcome.

Rejean B

[bryanmcn]

Do the administrators have another opinion on how to jump on board?

It's unlikely that we will duplicate the SSP performance by entering with balanced positions. TIM is so heavily weighted now that any movement in its price impacts the portfolio.

Can the administrators tell us what the weighting is of the stocks in the V1 portfolio?

[Super Stock Picker]

Hello guys,

Here is the link to another post that explains the two different strategies you can use to jump in one of our portfolio:
Which is the best way to start following a portfolio?

I'll come back to you with a tool that helps to determine the current weights of the stocks in one of our portfolios.

[Super Stock Picker]

Hello,

As promised, here is an Excel sheet that allows you to find the weighting of the stock in our portfolios. You can modify it to match the portfolio you want and the stocks' last price update can be done automatically.

I have taken the example of the Ultimate Price Momentum v1 portfolio on date of today, January 11, 2008. This spreadsheet uses the MSN MoneyCentral addition to grab the company names and the last price automatically from the stock ticker. These functions come in an extension file that is an executable file. I have renamed that file's extension to "txt" to upload it on this forum. Please change its extension after the download. The correct full name should be "msnsq.exe".

As usual, do not forget that you need to be logged on the forum to be able to download the attached files.