Kapitall.com is a fun, stock trading game that would appeal to new investors as well as experienced ones. To more accurately measure an investment thesis against actual practice performance, tools offered by Kapitall will be incorporated on this site.
So far, three portfolios created have cumulatively returned 30.9%. Although the market continues to drift steadily higher alongside lower volatility and lower volume, the cash levels on the Kapitall portfolios have increased to take advantage of future opportunities.
To test Kapitall's tools for sharing information, below is a chart on Chesapeake Energy.B denotes 'buy' and S denotes 'sell.' E denotes 'earnings' and D denotes dividend payment.
Chesapeake Energy contributed about 4% gains in one of the practice portfolios:
As QE2 or quantitative easing via POMO unfolds in the United States, look for U.S. currency to weaken.
Companies in the energy and gold sectors will benefit as demand for these commodities increase. Credit easing will also increase risk tolerance, which will support expanded price-earnings multiples for the stocks (investors will be eager to pay a premium).
Therefore, oil and gold companies would be an area of interest for investors.
Sunday, January 23, 2011
Thursday, January 20, 2011
Get Rich... Slowly
Report on Business is an excellent source for news on the financial markets. Yet, one comment that stood out from one of its readers is worth re-posting.
Is obtaining wealth impossible? Is it difficult?
"Certainly the rich get richer, and certainly the knowledgeable get richer, BUT..one need not be a genius to invest in the market and make some reasonable returns .
For example...at the depths of the late 2008 "correction/recession/whatever your favourite term is..you could have purchase stocks in any of the big canadian banks. I'll take TD as an example because thats the one I bought. I bought at $43...I believe it went lower. It's now at over $75.....
The dividend is around 3% now...if you bought at $42 you would be making over 5% dividend on your cost...and that will go up from now. Big risk/ Nope..I think TD or BMo or CIBC or RBC will weather most storms...no matter what. I think that history has shown that the canadian banks are a good investment and safe...not foolproof..you have to buy low..but safer than most.
Am I a genius? HARDLY.. am I making 100% on my investments yearly and wearing fancy clothes..HARDLY..but I made a good percentage on the stock and I am making a good dividend and I don't plant to sell anytime soon because I think the dividend will go up and I can safely make 6 or 7 or 8 % every year off that stock for the dividend alone.
Hard to do?? HARDLY You can do it too...and you don't need big dollars to get started.....but starting is the key...."
Friday, January 07, 2011
Talent Is Overrated
T2 Partners published its annual letter to its investors. T2 under-performed the market in 2010 but has performed exceptionally well over the past 12 years. Below is a section from its annual letter worth repeating.
My emphasis is in bold.
Deliberate Practice and Review
We recently read an excellent book, Talent Is Overrated: What Really Separates World-Class Performers from Everybody Else, by Fortune magazine’s Geoff Colvin. In it, he argues convincingly that world-class performers in a wide range of areas – from sports, to music, to academia and, yes, to investing – aren’t born with innate supernatural gifts, but rather become great through a series of specific steps, most importantly, a lot of hard work and “deliberate practice.” This excerpt really resonated with us, because it’s exactly what we try to do to become better investors over time:
The best performers observe themselves closely. They are in effect able to step outside themselves, monitor what is happening in their own minds, and ask how it’s going. Researchers call this metacognition – knowledge about your own knowledge, thinking about your own thinking.
Top performers do this much more systematically than others do; it’s an established part of their routine.
Metacognition is important because situations change as they play out. Apart from its role in finding opportunities for practice, it plays a valuable part in helping top performers adapt to changing conditions…[A]n excellent businessperson can pause mentally and observe his or her own mental processes as if from the outside:…Am I being hijacked by my emotions? Do I need a different strategy here? What should it be?
After the work.
Practice activities are worthless without useful feedback about the results…
…Excellent performers judge themselves differently from the way other people do. They’re more specific, just as they are when they set goals and strategies. Average performers are content to tell themselves that they did great or poorly or okay.
The best performers judge themselves against a standard that’s relevant for what they’re trying to achieve. Sometimes they compare their performance with their own personal best; sometimes they compare with the performance of competitors they’re facing or expect to face; sometimes they compare with the best known performance by anyone in the field…
…If you were pushing yourself appropriately and have evaluated yourself rigorously, then you will have identified errors that you made. A critical part of self-evaluation is deciding what caused those errors. Average performers believe their errors were caused by factors outside their control: My opponent got lucky; the task was too hard; I just don’t have the natural ability for this. Top performers, by contrast, believe they are responsible for their errors. Note that this is not just a difference of personality or attitude. Recall that the best performers have set highly specific, technique-based goals and strategies for themselves; they have though through exactly how they intent to achieve what they want. So when something doesn’t work, they can relate the failure to specific elements of their performance that may have misfired…
…Since excellent performers go through a sharply different process from the beginning, they can make good guesses about how to adapt. That is, their ideas for how to perform better next time are likely to work
…They approach the job with more specific goals and strategies, since their previous experience was essentially a test of specific goals and strategies; and they’re more likely to believe in their own efficacy because their detailed analysis is more effective than the vague, unfocused analysis of average performers. Thus their own effectiveness help give them the crucial motivation to press on, powering a self-reinforcing cycle.
h/t zero hedge, market folly
My emphasis is in bold.
Deliberate Practice and Review
We recently read an excellent book, Talent Is Overrated: What Really Separates World-Class Performers from Everybody Else, by Fortune magazine’s Geoff Colvin. In it, he argues convincingly that world-class performers in a wide range of areas – from sports, to music, to academia and, yes, to investing – aren’t born with innate supernatural gifts, but rather become great through a series of specific steps, most importantly, a lot of hard work and “deliberate practice.” This excerpt really resonated with us, because it’s exactly what we try to do to become better investors over time:
The best performers observe themselves closely. They are in effect able to step outside themselves, monitor what is happening in their own minds, and ask how it’s going. Researchers call this metacognition – knowledge about your own knowledge, thinking about your own thinking.
Top performers do this much more systematically than others do; it’s an established part of their routine.
Metacognition is important because situations change as they play out. Apart from its role in finding opportunities for practice, it plays a valuable part in helping top performers adapt to changing conditions…[A]n excellent businessperson can pause mentally and observe his or her own mental processes as if from the outside:…Am I being hijacked by my emotions? Do I need a different strategy here? What should it be?
After the work.
Practice activities are worthless without useful feedback about the results…
…Excellent performers judge themselves differently from the way other people do. They’re more specific, just as they are when they set goals and strategies. Average performers are content to tell themselves that they did great or poorly or okay.
The best performers judge themselves against a standard that’s relevant for what they’re trying to achieve. Sometimes they compare their performance with their own personal best; sometimes they compare with the performance of competitors they’re facing or expect to face; sometimes they compare with the best known performance by anyone in the field…
…If you were pushing yourself appropriately and have evaluated yourself rigorously, then you will have identified errors that you made. A critical part of self-evaluation is deciding what caused those errors. Average performers believe their errors were caused by factors outside their control: My opponent got lucky; the task was too hard; I just don’t have the natural ability for this. Top performers, by contrast, believe they are responsible for their errors. Note that this is not just a difference of personality or attitude. Recall that the best performers have set highly specific, technique-based goals and strategies for themselves; they have though through exactly how they intent to achieve what they want. So when something doesn’t work, they can relate the failure to specific elements of their performance that may have misfired…
…Since excellent performers go through a sharply different process from the beginning, they can make good guesses about how to adapt. That is, their ideas for how to perform better next time are likely to work
…They approach the job with more specific goals and strategies, since their previous experience was essentially a test of specific goals and strategies; and they’re more likely to believe in their own efficacy because their detailed analysis is more effective than the vague, unfocused analysis of average performers. Thus their own effectiveness help give them the crucial motivation to press on, powering a self-reinforcing cycle.
h/t zero hedge, market folly
Monday, January 03, 2011
Kapitall gets $7.3 Million to Jump Start 2011
Kapitall.com was introduced in an earlier entry. It is described as an online investing platform that combines the world's friendliest investing experience with powerful yet simple tools to build your skills.
Most recently, Kapitall closed $7.3M in financing in December.
A number of practice portfolios were created in 2010. The performance of two of the portfolios were good, returning between 29 - 31%, additional portfolios were created so as to track its relative performance against the U.S. Index, the activity of stock picks made by hedge funds, and that of China.
The goal of this blog for the year will be to note and comment macro events, and to keep track of stocks selected and invested in the kapitall.com playground.
The link for kapitall.com is here. Facebook users can login and connect to facebook friends that way. Look up "Chris Lau" so I may "share" my stock portfolio holdings and activity.
Fig 1: Portfolio Performance versus other indices:
Fig 2: Performance for $10,000 portfolio
Fig 3: Performance for $100,000 Portfolio
A note of caution! Both portfolios are trades since June 2010. Positive or negative performance for 2011 will provide a better indication on the success of trades made in the Kapitall playground.
Most recently, Kapitall closed $7.3M in financing in December.
A number of practice portfolios were created in 2010. The performance of two of the portfolios were good, returning between 29 - 31%, additional portfolios were created so as to track its relative performance against the U.S. Index, the activity of stock picks made by hedge funds, and that of China.
The goal of this blog for the year will be to note and comment macro events, and to keep track of stocks selected and invested in the kapitall.com playground.
The link for kapitall.com is here. Facebook users can login and connect to facebook friends that way. Look up "Chris Lau" so I may "share" my stock portfolio holdings and activity.
Fig 1: Portfolio Performance versus other indices:
Fig 2: Performance for $10,000 portfolio
Fig 3: Performance for $100,000 Portfolio
A note of caution! Both portfolios are trades since June 2010. Positive or negative performance for 2011 will provide a better indication on the success of trades made in the Kapitall playground.
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