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CAPS / CAPS Feedback
|Subject: Re: CAPS is not meant to be a mirror of performa||Date: 2/8/2007 4:10 PM|
|Author: rbgibbons||Number: 4843 of 9110|
The scoring system is clearly nuts. It has little relationship to anything that would be useful in investing in real life. In real life, I want to know who the players are with the top performing portfolios, so that I can look at their stock picks and see if they're attractive. In particular, I don't want to see 500 stock picks that the game-player is carefully cultivating until they hit the appropriate harvesting threshold.
So, I'd consider the CAPs rating as something similar to a score in a video game. They're quite indicative of how effective someone will be at killing dragons in a virtual world. But probably only marginally useful in determining how they'd do killing dragons in the real world.
Thus, the scores in CAPs have no value except for entertainment. If someone wants to spend their time gaming CAPs, it's no different from me spending time playing online poker.
The real-world value in CAPs is in identifying the 4 or 5 stocks in your own portfolio that are most indicative of your own investment strategy and then, trolling through the (reasonably sized, non-gaming) porfolios of people who like those same four or five stocks. In that way, you can actually identify people with similar investment strategies and interesting investment ideas.
Of course, the more people who game the system trying to get high scores, the less useful CAPs will be for identifying interesting stocks.
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