Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
First off, let me say I'm completely on board with statistical analysis to help screen stocks. The more refined I can get my data the better, but only as a place to start. With that said, I have a concern about the CAPS system as it relates to the scores and how the higher rated players are weighted when it comes to rating a stock.

I know no one on these boards so I'm not pointing fingers or passing judgment. However, it seems, at least on the surface, that one can become highly rated rather quickly by closing winning positions and "locking in" accuracy. Look at the highest rated players and see how many ended picks have been accurate versus the number active that are accurate. It appears that the system can be manipulated toward higher accuracy, which in turn gives a player a better score.

Granted, those players made an awful lot of accurate picks, and I see no fault in closing a pick once your opinion of the underlying stock has changed, but many are being ended in relatively short order as compared to the time frame of the pick. I also know the time frame has no bearing on the pick in CAPS, it's just there for reference. I would find the players closing winning positions to be more honest, however, if the time frame chosen when the pick was made more closely matched the time frame the pick was active in their CAPS portfolio.

I have been a Fool member since 2001 or so, and only just began rating stocks myself, so I do not see myself as a guru or even a good stock picker. I do, however, own most of the stocks that I rate.

This is not a rant or a call to arms, just one Fool's view of what might be a CAPS flaw.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.