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|Subject: Re: 14 Ways to Use CAPS... and counting.||Date: 10/24/2006 12:22 PM|
|Author: TMFCramerica||Number: 3713 of 9111|
The CAPS Swiss Army Knife - Beginning Applications of CAPS
Here is a beginner's guide with specific applications of CAPS. Hopefully this will get your creative juices flowing on the range of possible applications. All of these probably fall within the scope of David's first 5 reasons – a learning tool, a factory for new stock ideas, a second opinion on stocks, tracking investors, and tracking wall street. Many of you are probably already expert users and have found more complex, nuanced ways of conducting research through CAPS. For begginers and those just getting their feet wet, dive in!
How can CAPS help me conduct stock research?
I am lazy. Boil all of this analysis down to something simple and straightforward.
Check out the CAPS one-to-five star rating on any stock of interest located at the top of the page right below the company name.
Who do you take me for? I'm not that lazy. Give me the overall quantitative data behind all the picks on this stock. Give me the juice behind the CAPS Rating.
Under “What the Community Thinks” check out the total number of outperform and underperform picks on the stock. Note the division of picks among all-stars as well.
Okay, okay. So these are the raw numbers. But what about recent sentiment on the stock given its current price? What's the current outlook moving forward?
Within the scorecard view, see the most recent picks on the stock. The default sort of the scorecard view is by start date so ticker pages will naturally show the most recent picks. Read the commentary by expanding the pitches. Be sure to take note of the player ratings of these picks as well.
What if I just want to see what the highest rated people think about this stock? Show me the opinions of the CAPS experts.
Click on the header of the second column – Player Rating. This will sort all of the picks by player rating. From top to bottom, you will have the calls of the top-rated players in CAPS. Take note of the relative distribution of green thumbs and red thumbs and be sure to read the pitches.
Okay. Forget the overall experts. I want to see the calls of people who have already been right on this stock. Show me the experts on this stock alone.
In the second-to-last column, click on the Score header to sort all of the picks on score. This custom list shows you the picks of people who have been right the most on this stock. They had the best performing calls to date. See if they are thumbs up or thumbs down and read their pitches.
What if I want to read the best commentary on this stock? Show me the highest-rated pitches.
Next to the scorecard tab, click the commentary tab. To the right of Sort by, click the “Recs” link to sort all of the pitches by the number of recommendations. The highest ones will bubble to the top and you can read away. Be sure to note whether they are a green-thumbs-up or a red-thumbs-down. Read the replies as well.
I'm a long-term investor. I want to know what people are thinking 5-10 years out.
Within the scorecard tab, click on the “Time Frame” column. The second click will give you picks sorted by the longest time frame. As always, be sure to check player ratings, start prices, and the accumulated score – as well as read the pitches.
I'm just about sold on this stock. I'm ready to make the pick myself – and also buy it in my portfolio. But, being the prudent person I am, I want to be thorough in my analysis. I want to see the opinions of everyone who disagrees with me. Show me what these people think.
Within the scorecard tab, click on the header of the fourth column – “Call.” The first click will give you all the outperforms; the second click all the underperforms. With all the underperforms at the top, you can see what players (with what player ratings…) are thumbs-down on your stock of choice and you can read their commentary by expanding the pitches.
Forget about the CAPS players. Show me the opinions of the real experts – the professionals.
Below the CAPS Players table is a Wall Street table with the aggregated picks of professional analysts. Mine this data just as you would the data of the CAPS players.
Say I find some stocks of interest. I want to check out other similar stocks that I might want to buy.
CAPS provides 2 neat applications here.
1) On any ticker page, under “What the Community Thinks” you can see what players bullish/bearish on this stock are also bullish/bearish on.
2) Below that, click on any tag associated with this ticker and see what other stocks belong to this category. Be sure to note the performance of that entire tag on daily, monthly, and yearly time frames.
I hate stocks. What about people? How can I follow and learn from great investors?
I'm on a player page. What should I do?
At the top of the table, check out the player's most recent picks and any associated pitches.
Without being overly redundant, here are ways to sort the data in the player's scorecard:
1) Sort on CAPS Rating – see the person's opinions on 1-star stocks and 5-star stocks. Read associated commentary.
2) Sort on time frame – see the person's short-term and long-term outlook. Read associated commentary.
3) Sort both ways on score – see what the player has been the most right and wrong about. Read associated commentary.
4) Within commentary view, sort on “Recs.” Read what the community believes to be the highest quality pitches from this person.
Okay. How can I easily track my favorite players. There are so many players within CAPS already and I just want to follow a few select players of interest.
That's what favorites are for. On your player page, within the Favorites tab, you will notice a link at the top entitled “View All Favorites.” This will bring you a nifty table listing all your favorites and important data points for your favorites. In the short-term, we also plan on beefing up this table by making these columns sortable and adding a few important columns. In the meantime, this page is the best way to keep track of all your favorites and see how they are doing on a daily basis.
I hate stocks and people. What about overall statistics?
Our Top Tens tab hosts a wide range of data on all aspects of CAPS. This information can be mined in a number of different ways, but just to get your creative juices flowing, I will make a few points:
1) Disappointing 5-star stocks: Note 5-star stocks that have performed poorly. Is there a reason for the poor stock performance? Or has the sell-off occurred for no reason? What are CAPS players saying now given the sell-off? Check the most recent picks and commentary on the stocks at the top of this list.
2) Most rated stocks: Among these stocks with the most picks, check for which ones have high CAPS ratings – 4 or 5 stars. These are stocks that a large portion of the community thinks will outperform.
3) Newly starred stocks: Moving forward, these will represent stocks with minimal coverage among investors and Wall Street. You get to take a look at what the opinions and commentary on these stocks are when less than 20 people have picks on them. Generally speaking, the less coverage on a stock, the greater potential for it to be misvalued. Research hidden investment opportunities among 5-star stocks within this list.
In addition to highlighting interesting data, the top ten lists provide users with a great way of identifying new favorite players to follow.
Forget about stocks, people and statistics. I want to produce my own customizable listings based on my preferences. What about advanced stock and player search?
Some of the most powerful ways to use CAPS are through customizable, advanced player and stock searches. The possibilities here are truly endless – and with time, we hope to beef up the searching capabilities even further; although in their current state, I think they provide a great window into the CAPS universe of data.
A few quick examples to illustrate the potential here…
Where else can you do a search for an investor who is beating the market by more than 100 score points (percentage points) with an accuracy between 80% and 100% and a high risk tolerance? As of now, only 6 such players exist out of over 11,000 investors – mpfd33, Graylord, TMFPeterJ, jtallenmd, HornedToad10 and sisyphus123. Amazingly, the same search with the small tweak of switching high risk tolerance to low risk tolerance produces 11 investors.
Or how about finding a 5-star stock with more than 80 picks that is down over 20% in the last month….Only 2 such stocks exist – LCAV and ASPV.
These are just a few possible searches among an infinite number of possibilities. Without CAPS, I'm not sure how one would even begin conducting these sorts of searches.
As you can see, the data within CAPS can be mined in a myriad of different ways. Whatever your personal investing profile, jump into this research platform and make it work for you. And continue sharing and discussing application ideas in this thread. Investors helping investors beat the market – Fools living the mission.
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