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Strategies & Market Trends : Value Investing
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To: jeffbas who wrote (12146)3/8/2001 12:41:17 AM
From: Paul Senior  Read Replies (1) of 78602
 
Trying it your way,Jeffrey, we get:

siliconinvestor.com

Equal dollar weighting would have enabled purchase of more shares of "our" big winner, low price stock GTSI. So the dollar gain is bigger (than with a 1000 sh. purchase); and this dollar gain overcomes less dollar profit on fewer shares that would've been purchased of ICIX and KEM.

Net result is that the portfolio shows a greater gain on invested capital (5 stocks x 10K/ea = $50k)

Personally, my belief is that we have several types of value picks in that portfolio, so I would not be using equal dollar weightings here. GTSI and BAMM were net/nets. I'd want to invest fewer $ in each of these selections than I would in stocks like KEM or LDP that I believe (rightly or wrongly) that I understand better. My original purpose in setting up the list was just to keep track of stocks 3 people here selected and to see if such selections continued to be winners. And maybe to quantify results by number of issues and percentage gain or loss. Having a portfolio and tracking its performance is difficult here because in every case, the 3 people who said they bought, bought at different prices. There is also more arbitrariness when one of the 3 people says he's selling. I have no rule to close out the position. I'm not even sure SI portfolios can show closed out position results.

Paul
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