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No. of Recommendations: 5
I have to ask. Why should I care about CAPS? Seriously, the top player has hundreds of picks while he ran a quote for the last week or so from Buffet to the effect that diversification is for those who don't know what they're doing. Is the Fool seriously contending that he has made a real analysis of this many companies? Should I put my money where his mouth is?

Meanwhile, I can't pick stocks at the price I paid, only those which are available when the service is offered to me. So a Fool who was allowed CAPS months before I was games the system by banking accuracy and I'm supposed to follow these recs because they demonstrate “community intelligence”. All this while a stock like MMM has a total of 480:15 outperform to underperform rating and still has only 4 stars (“allstars” rating is 111:7).

Nothing against the leader or the Fool, but what good is this to me? If we could somehow find actual companies to buy I'd be excited, but I can't figure how this can make me money.

Flame on!

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No. of Recommendations: 10
RE: Nothing against the leader or the Fool, but what good is this to me? If we could somehow find actual companies to buy I'd be excited, but I can't figure how this can make me money.

Dear Tom,

I don't think you SHOULD necessarily care so much about the "gamesmanship" aspect that seems so prevalent in recent posts, and can be off-putting (There are people who have put in a LOT of time on this, and so naturally may be very invested in the best ways to measure score, etc).

BUT I very much think that this thing can be used to make money!! And I think that the magazine write up (link a few posts back), that suggests that a bunch of Fools could never come up with anything better than "professional" analysts, is off track. Here's why:

While it is true that some will pick by "piling on" TMF Eldrehad's coattails, some will be beginners, and some will just lob darts at the stock pages, there will be 2 kinds of folks who will emerge that I plan to follow. One will be those who are scary good overall at valuation, timing, and knowing when the "herd instinct" is wrong. The other particularly interests me: insiders in a particular industry (not company), who know that biz and will spot things that are taking off. With their knowledge of whatever business they are in, they will be able to tell what is going to be "real world good" and what is over-hyped. I look on this as a very deep "hidden gem mine." (I love Hidden Gems but there are only so many of them per issue).

I know nothing about oil or computers or fashion, but I am darned good in my field and can tell what has widespread application and staying power, what is an "also-ran," and what is "gee-whiz" but will only have minimal use because the disease is rare. My area doesn't scare me because it's WHAT I DO every day. Doubtless, there are CAPsters out there with similar skills in all areas, and THAT is what is going to give CAPs the "last laugh" on those who wrote the negative piece referenced.

My real-world plan is to troll through the little-rated stocks, read the pitches, and research more the ones with useful pitches from those who seem to have knowledge of that industry. I'll collect my own panel of "insiders" as I go. I'm not gonna blindly risk real cash just on a CAPs rec, but it's sure going to be a starting point for new ideas.

THAT's why I care! Don't get turned off by the whole rating system!
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No. of Recommendations: 3

I have to concur with oncqueen's point on the value of “insider” information. Direct access to people within industries that also have some stock smarts could prove invaluable. I'll give more weight to the opinions of those with a track record of high scores. When researching a prospective stock, I sift through what the CAPS community has to say about it.

I love the fact that CAPS holds the “experts” feet to the fire. I am amazed only 39 of all the Wall Street players are even profitable. It's like all the analysts and TV stock pickers were standing around telling the Emperor he looked fabulous and CAPS finally points out he has no clothes.

I also like that CAPS lets me see opposing views on stocks I like/dislike. After all, there are two sides to every trade. It's interesting to see what people on “the other side” are thinking. Should help separate the fool from the Fool!

To your point, I agree there are some drawbacks to the scoring. I feel your pain regarding not being able to pick stocks at the price I paid for them in my real portfolio. I under estimated the effect this would have on my CAPS results. Fortunately my real world return is much better than my CAPS.

Additionally, I am having trouble adjusting to all picks being equally weighted. In the real world I hold much larger positions in “safer” investment stocks than I do more speculative stocks. My CAPS portfolio just got shredded when a couple of my spec picks took a hit. It pummeled me from All-Star to no better than a coin flipper.


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