Kurlack's "table-pounders" v. "the others" - AMAZING NEW STUDY!?
Sweating bullets in a steaming hot brownstone, already through your first pot of coffee, flipping back and forth between the Replacements' "Let It Be" and sports talk radio, and suddenly it hits you...
What happens if you take the three stocks that Tom Kurlack (a.k.a. "influential Merril Lynch semiconductor analyst") seems to have pounded the table the hardest on (at least if you've been watching CNBC), MU, INTC and TXN and compare their performance to those of the remaining SOX stocks over the quarter up until Friday?
Any guesses?
Let's run the numbers (using data posted by LD a while back, hitting the message link should get you there - if anyone really cares):
Scenario #1 - Buy 100 SHARES of each:
begin end in out-1 comm. out-2 net %
AMAT 46.38 72.75 4638 7275 -39.9 7235.1 2597.1 56.00%
VLSI 17.31 25.25 1731 2525 -39.9 2485.1 754.1 43.56%
TER 28.88 41.44 2888 4144 -39.9 4104.1 1216.1 42.11%
MOT 60.5 76.88 6050 7688 -39.9 7648.1 1598.1 26.41%
NVLS 69 85.88 6900 8588 -39.9 8548.1 1648.1 23.89%
LSCC 45.75 56.25 4575 5625 -39.9 5585.1 1010.1 22.08%
ADI 22.5 26.63 2250 2663 -39.9 2623.1 373.1 16.58%
LLTC 44.25 50.25 4425 5025 -39.9 4985.1 560.1 12.66%
NSM 27.5 30.25 2750 3025 -39.9 2985.1 235.1 8.55%
LRCX 33.75 36.5 3375 3650 -39.9 3610.1 235.1 6.97%
XLNX 48.75 47.88 4875 4788 -39.9 4748.1 -126.9 -2.60%
LSI 34.75 32.5 3475 3250 -39.9 3210.1 -264.9 -7.62%
AMD 41.5 35.75 4150 3575 -39.9 3535.1 -614.9 -14.82%
total 52082 61821 18.70% 61302.30 9220.30 17.70%
INTC 139.13 142.25 13913 14225 -39.9 14185.1 272.1 1.96%
MU 40.38 40 4038 4000 -39.9 3960.1 -77.9 -1.93%
TXN 74.88 85.63 7488 8563 -39.9 8523.1 1035.1 13.82%
total 25439 26788 5.30% 26668.30 1229.30 4.83%
How 'bout that?
100 shares each of INTC, TXN and MU got you 4.83% after-commissions (c'mon, whose still out there paying full-service?)
100 shares each of everything else got you 17.70%
Scenario #2 - $100,000 invested equally across each basket
(sorry about the obvious "column issues", I just pasted the data out of Excel)
begin end shrs. gross in out-1 comm. out-2 net %
AMAT 46.38 72.75 165.9 7692.308 12065.87 -39.9 12025.97 4333.67 56.34%
VLSI 17.31 25.25 444.4 7692.308 11220.71 -39.9 11180.81 3488.51 45.35%
TER 28.88 41.44 266.4 7692.308 11037.70 -39.9 10997.8 3305.5 42.97%
MOT 60.5 76.88 127.1 7692.308 9774.94 -39.9 9735.043 2042.74 26.56%
NVLS 69 85.88 111.5 7692.308 9574.13 -39.9 9534.226 1841.93 23.95%
LSCC 45.75 56.25 168.1 7692.308 9457.75 -39.9 9417.846 1725.55 22.43%
ADI 22.5 26.63 341.9 7692.308 9104.26 -39.9 9064.364 1372.06 17.84%
LLTC 44.25 50.25 173.8 7692.308 8735.32 -39.9 8695.424 1003.12 13.04%
NSM 27.5 30.25 279.7 7692.308 8461.53 -39.9 8421.63 729.33 9.48%
LRCX 33.75 36.5 227.9 7692.308 8319.08 -39.9 8279.18 586.88 7.63%
XLNX 48.75 47.88 157.8 7692.308 7555.02 -39.9 7515.122 -177.18 -2.30%
LSI 34.75 32.5 221.4 7692.308 7194.24 -39.9 7154.337 -537.96 -6.99%
AMD 41.5 35.75 185.4 7692.308 6626.50 -39.9 6586.599 -1105.7 -14.37%
total 119127.06 118608.4 18608.5 18.61%
INTC 139.13 142.25 239.6 33333.33 34080.84 -39.9 34040.94 707.605 2.12%
MU 40.38 40 825.5 33333.33 33019.65 -39.9 32979.75 -353.58 -1.06%
TXN 74.88 85.63 445.2 33333.33 38118.77 -39.9 38078.87 4745.54 14.24%
total 105219.25 105099.5 5099.56 5.10%
The table pounders seemed to have returned 5.10%
The non-table-pounders? A mere 18.61%.
I'd run scenario #3 - which, without going into detail, would involve use of my upstairs neighbors' parrot, but it's a little too early (not to mention too messy).
What does it say about the quality of sell-side Street research when using random bird droppings stand a decent chance of getting you a better (albeit fowler) return in a given industry sector than someone who is supposedly one of "the best and the brightest"?
Maybe next weekend somebody will ask the question "hey, what if you were one of the institutional investors listening in on the conference call of 5/7 and you actually went out and bought his top three?" versus "what if you went to Dunkin Donuts and just asked the counter-lady to pick a chip stock for you?"
Any guesses?
Good trading,
Tom |
