my post from February 2021.

I got a bunch of CAPS points but ended the picks when it seemed apparent that I might have been wrong. But I’ve been dinking around with this SaaS group in CAPS and you can see that now.

So I proved that I can’t time the market. If I’d sold everything I would have missed out on an additional 6% upside (using NASDAQ as benchmark), big whoop. But I’d be pretty smug today. IF I’d owned them in real life and had actual conviction and was actually sticking to an actual plan, which is not the actual case. And that’s a big thing. It’s easier with nothing at risk.

Today marks the start of a recovery…not.
This is a tradable rally.
Happens every time…we may see NASDAQ up 15% from here, but then look out below.
It’s gonna get mighty ugly. A few of my SaaS picks “filled” in CAPS, but as soon as I score some points, they get a thumbs-down en masse.

If any of Saul’s acolytes are lurking on this board and you have not created a CAPS page, do so. Extremely valuable! I have been an All-Star two or maybe three times over the years, and that in itself is a valuable lesson, but one that you can only see over time.

There will be value in these names (ZS, DDOG, UPST, etc) eventually…or at least in enough of them for a high average CAGR over ten years, but not for a while.

to be clear, I neither hold nor trade any of these names in real life. Most of the stocks I hold are listed in CAPS, designated with a checkmark. I do not checkmark stocks I don’t hold.

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Gee, Rsndy. A blue Fools cap with a score of -97.

How do you manage that?

Not sure what you are asking there, Paul. Regarding CAPS generally, it’s been super valuable for me to test theories, check (long term) on suggestions that come my way from all quarters. I’ve done picks based on Denny’s recs, hohum’s recs, Mauldin recs, etc. You’ll see that almost every pick has my rationale, vague as it may be; I’ve tried to refine that over the years. But I don’t do it for other people, I do it for me.

About a year ago my CAPS score was in the 30th percentile, even though my accuracy has always been in the high sixties. My score is over 50% again and I haven’t done much but make some bad picks on SaaS names; though I’ve also made some good ones. None in real life. But what my climbing CAPS score does show me, assuming that I’m reading it correctly, is that there is a very definite turn in the market. When NASDAQ is up, my score goes down (no matter what Dow and S&P do), when NASDAQ is down 2% in a day, my score climbs a percent or two. As previously mentioned, I’ve been an All-Star at least a couple of times. Three of my badges (I couldn’t tell you for what) have also disappeared. Those don’t come for nothing, though most of them seem to stay for nothing.

CAPS doesn’t reflect my real world performance; sometimes regrettably, sometimes happily, but that’s the market right there. CAPS shows me that investments like GRMN, underwater on CAPS for the longest time, turned out to be a better investment than it feels (because I sold a bunch at too small a profit), while others, like RBCAA are still underwater but I am not at all unhappy with my return. We have to remember that the benchmarks are moved by very few names, so most have not performed as well as the FAANGs, but a good dividend and triple my money is nothing to sneeze at; it’s a solid and acceptable CAGR.

Lastly, I find it interesting that many of the top CAPS performers don’t have any recent picks. That is also an abject lesson in how the market works; especially over time.

when TMFDitty speaks through CAPS, I listen.

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CAPS was a nice idea that didn’t have the legs (or support) it otherwise might have*. As a tool for individual investors, it was pretty nice if used effectively i.e. you could express and update opinions on a holding, and even blog on your portfolio as a whole (I did for a time). The ‘notebooking’ aspect of the CAPS layout was really good, but underemphasized and underused. I did well in CAPS but … started to ignore it … and eventually closed it out.

  • Once could read this as ‘didn’t effectively monetize for TMF’ if they might care to.

Well now I have a blue hat; passed 2.7% of players today and have a tiny positive score.
That means that 60% of CAPS players have underperformed the market…or at least their CAPS picks have. That seems about right and why index funds are smarter for most (at least 60%) investors.

CAPS is still very useful…at least to me.