1st ANNIVERARY IN THE FRONT OFFICE
Part Two
THE FRONT OFFICE GORILLA GAME
Our Front Office Game began on Memorial Day weekend in
1998 with a hypothetical $10,000 in not real money. The
numbers below assume $8 commissions. Because the interest
earned on cash is insignficant, it is not accounted for.
The portfolio was begun with equal dollar amounts allocated
to each of the four stocks. Abiding by the rule that we
lighten up on chimps, some of Clarify's stock was sold one
month ago. Funds were used to purchase equal dollar amounts
of Remedy and Siebel Systems, the two candidates most likely
to achieve ultimate gorilladom.
Now, the comparisons:
Year-to-
History Date Quarter Month
Gorilla Game 39.66% 27.09% 5.39% 18.31%
S&P 500 17.23% 5.89% 1.20% -2.50%
Russell 2000 -5.25% 3.96% 10.32% 1.36%
As you can see by the above numbers, our game is looking very
good at the moment. Knowing that only 50 of the stocks in the
S&P 500 are doing as well as the index itself, I'm very happy
that our game is doubling the index.
However, we can't ignore that it hasn't always been that way.
Eight months ago (in October) our Front Office Game was showing
a 40% loss when the S&P 500 and the Rusell 2000 were showing
losses of "only" 10% and 25%, respectively.
That fact is just one example of the game's volatility. Take
a look at the huge swings we've endured in the last twelve
months:
May, 1998: Game begun
October, 1998: 40% loss
January, 1999: 40% profit
April, 1999: 4% profit
May, 1999: 40% profit
It is not unusual that individual stocks will have movements
of 10% and 15% in one day on seemingly no news (as happened
on Friday with Clarify.) The game has had many weekly gains
and losses of 15 to 25 percentage points.
The numbers below show the bigger picture for each of the
four stocks:
Current 5/25/98 5/1/99 Change
% of Buy Buy Average Current from
Stock Portfolio Price Price Cost Price 5/25/98
Clarify 14.3% $13.25 N/A $13.25 $32.31 143.87%
Remdy 30.6% $17.44 $17.50 $17.46 $19.00 8.94%
Siebel 47.9% $23.00 $38.44 $27.10 $45.53 97.96%
Vantive 7.0% $27.63 N/A $27.63 $10.88 -60.63%
Finally, the current tally:
Stocks $13,950.22
Cash $15.61
Total $13,965.83
Caveat: I own shares of Siebel Systems, have owned shares
of Remedy, and reserve the right to own short or long
positions in any of the above stocks at any time in the
future. In other words, do your own homework and don't
be influenced by me! :)
--Mike Buckley
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