One Year Anniversary
I thought the following was sort of interesting. Feel free to read and disagree :)
I'm not sure if many of your are familiar with "Marketocracy". It is basically a web site where you can play "mutual fund manager". You start with $1 million cash, divvied up into 100,000 shares, so you start with a NAV of $10.
You have to follow certain mutual fund regulations, like diversification and such, but are allowed to buy and sell equities as you please (although shorting is not allowed unless you "run" a short only fund). They track your trades, you gains and losses, and give you a ranking compared with others using the site.
Hope I haven't bored you so far...anyways...
I signed up over a year ago. I let it sit inactive for a while, as I was busy with "real" trading. My Marketocracy NAV slowly dropped down to $9.92 due to "management fees".
Eventually I started actively trading on 5/10/2005. I basically selected equities using a screen for strong stocks on recent pullbacks, and limited purchases to stocks with high IBD rankings.
Most trading was done in bulk whenever I had an interest in checking the account. I would keep the strong gainers, and weed out the losers. Over the course of the year, I traded on a total of 38 days, or an average of a little over 3 trade days a month. More interestingly, I've only traded on 8 days since 9/26/2005.
I was lucky in picking some good stocks early on, like TS and HANS, as well as having a fair allocation to energy stocks. My "mutual fund" has shown a slow and steady gain in NAV since 5/10/05. In fact, I dare say it has outperformed most "real" mutual funds over that time period.
Ok, the results:
5/10/2005 NAV = 9.92
5/9/2006 NAV = 12.92
30.2 % annual gain
It's a pure guess, but I'm guessing that I put in less than 72 hours of work trading stocks in this Marketocracy account to get a 30% gain on a million dollar account over the course of one year.
Now....are mutual fund managers overpaid?? Discuss :)
Hoping to breathe a little more life into this board!
Cheers,
LoDo |
