Marketocracy update - year end 07 at Dec 28.

I think there might be another trading day left in the year next Monday, but I wanted to go ahead and review the year's Marketocracy investment results.

For the past 12mo, my main Marketocracy fund SMF is up 10.99%. A decent year overall, but it is worth noting that the fund actually declined 1.11% over the past 6 months. The past 6 months have been wheel-spinning. Not good.

For the past 12mo, my secondary Marketocracy fund SOS is up 9.64%, and virtually flat over the past 6 months.

While investing in similar stocks and having similar selection criteria, the secondary SOS fund is more aggressive in selling positions than the primary SMF fund by design - it's a test in sell strategy. Again like in past years I find that it's better to follow the SMF approach and ease out of positions slowly - to let them run a little longer. The SOS approach of selling more rapidly when my opinion of a stock changes just doesn't seem to be quite as effective.

The 10 largest holdings in the SMF fund are (53.4% of fund):
GRMN Garmin
LIFC Lifecell
GOOG Google
HANS Hansen Natural
CTSH Cognizant Tech
SAY Satyam Computer Services
INFY Infosys
HWAY Healthways
VDSI Vasco Data Security
NTRI Nutrisystem


The 10 largest holdings in the SOS fund are (65.95% of fund - the SOS fund is more concentrated at the top because I sell full positions faster here)
GRMN Garmin
VDSI Vasco Data Security\
LIFC Lifecell
CTSH Cognizant Tech
GOOG Google
HANS Hansen Natural
INFY Infosys
TRAD Tradestation
SAY Satyam Computer Services
CEO China National Oil

Marketocracy update

My main Marketocracy fund, similar to my real-life portfolio, has been getting it's clock-cleaned over the past month. As I'm writing this it's down 12% over the past month and down 4.5% over the past 3 months. Needless to say the portfolio isn't built to do well in down markets. This is probably one of the worst stretches I've had since starting the Marketocracy test.

Stock Holdings

I'm convinced that the "Average Joe" investor can beat market averages over the longer term. A statement like that probably needs some justification so here's some "best effort" play money mutual funds I've been running over at the Marketocracy website. Marketocracy lets me try out different investment strategies and monitor progress over time.

SMF is my initial and longest running fund. This is a best effort fund. Even though I started the fund in May of 2001, I really only started managing it properly sometime in the last half of 2002.

SOS is the other "best effort" fund I run and is a variation of SMF with a more aggressive sell strategy. SOS has been running since August 2003.

As you can see, both funds beat the S&P500 average by a wide margin over the test periods. Beware there is volatility in the methods I use, and the funds recently have tended to underperform in down markets - so as a result in my real life accounts I raise cash quickly when I get bearish.

I try to review my personal stock holdings at least on a monthly basis. My current stock holding in order of size of holding are:

CRDN - Ceradyne - primarily ceramic body armor
CTSH - Cognizant Technology - technology consulting (India)
GRMN - Garmin - Global Positioning System pioneer
HANS - Hanson Natural - Energy drinks
INFY - Infosys - technology consulting (India)
NGPS - Novatel - another GPS player
ASVI - ASV Inc - maker of tracked loaders similar to "bobcats" - this was a mistake by me on the buy but I'm holding at current prices. I was aware of the slowing home market but bought anyway.
CKFR - Checkfree - online billpay provider