Lesson 5: I have had a lot of success with patient outperforms, and CAPS is starting to get mature enough that compounding returns help. For instance, Amazon.com is up 24% today as I write, but for my CAPS scorecard I am getting a Score of +44. That's because my gains are compounding on themselves, just like real life.This is so often overlooked Dave, that I just wanted to chime in and stress just how big of a factor this is going to be over time.You are right that CAPS is just starting to mature. As CAPS goes, I've been around longer than most, and I've been playing just a bit over a year and am already seeing this. What will happen 5 years out, or 10? Those who make good outperform calls on perennial outperformers will someday be racking up 100 points a day or more on 10% stock movements. Try doing that with an underperform call!The geeky side of me likes to think of underperform calls as the 'dark side of the force'. In the words of Yoda, in a way they're 'easier, quicker, more seductive'. Over time, though, it is the outperform calls that will prove themselves more powerful.Underperform calls appear to have the advantage for now precisely because CAPS hasn't been around very long and everyone's CAPS pick list is filled with what are effectively short-term calls. The more time passes, the more we'll see this change.I'm sure none of this is a new concept to you Dave, but I feel so strongly about this aspect of CAPS that I felt compelled to second your thoughts.Regards,Russell(a.k.a. TMFEldrehad)
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