No. of Recommendations: 139
No, I'm not getting out of MI. But things are changing in my portfolio (as they always do), and the Cherry Tree isn't what it once was. Today I started moving some accounts around, and the only thing I'm holding right now is the two HTD screens in my 401k. I'll be getting back in to some of the other screens when things are settled, but with less money and fewer screens (perhaps only ProjRRS).

The Cherry Tree has been whittled away over the last seven years by a combination of losses and spending. I can't say it's been a rousing success, but it's always been money I can afford to lose. That's getting less true these days.

Let's start with a recap of last Friday's results, just the totals:

Screen Start Date 25 Aug 2006 Week YTD TTM Life Ann'd Low
8/18 4/15/05

Total 1 Oct 1999 86553.06 -2.13 1.5 10.0 -59.2 -12.2 20.8

S&P 500 1 Oct 1999 1295.09 -0.55 3.7 7.5 -2.8 -0.4 13.3
QQQQ 1 Oct 1999 38.32 -1.21 -5.2 -0.4 -35.7 -6.2 10.3

Value @ Top 23 May 2002 8188.30 0.20 38.2 52.7 130.1 21.6 66.4
ProjRRS 1 Oct 2001 8234.91 -2.47 -9.3 -3.9 158.7 21.4 15.9
Screamers 13 Oct 2003 8320.10 -3.05 -16.4 10.6 55.0 16.5 22.5
SOS-EG5 4 Feb 2002 9201.11 -1.37 -1.6 15.6 76.3 13.3 33.3
YEYPayout HTD 17 Oct 2005 30275.80 0.74 4.1 9.5 11.2
RSWEPS HTD 28 Feb 2005 22332.84 -6.37 -23.3 -19.0 -38.5 -27.9 -6.8

For seven years' work, I have a 60% loss. Combine that with constant raiding of the investment fund, and that's a lot of money gone. The investments have yielded a scary -12% CAGR, but really I've done better than that: some of the money I took out went to a decent increase in my home equity, and some went to buy a couple of cars (ni 2000 and 2005). All of these moves have proven to be good investments: they've left me with less money to apply that -12% to.

I failed to make money, and failed to beat the market (which over this time has also failed to make money ,but not quite so spactacularly). <> shows the Cherry Tree's final run, which wasn't bad for the last couple of years but failed to make up for earlier losses.

During this portfolio's twisted tenure, I've invested in more than 51 different screens - there were more, but some got rolled into others in my accounting. Of these 13, or 25%, made money. Suprisingly, only half the winning screens made in into 2006. I expected that I'd have done more to hold on to winners, but there were a few that I decided to let go when they appears to be on a shaky foundation but before that foundation gave way. The best example of this would be RSS-Opt, an option-turbo version of my RSS screen which got a 825% CAGR for its 5-month life. I've collected my 5 best and worst screens (by CAGR) at <> and <>. Not surprisingly, two of the losers (as well as one of the winners) used options.

Screen Start End CAGR GSD gain

RSS-Opt 10/1/01 3/18/02 825.4 117.3 117.3
Freshmen 10/1/99 12/29/00 86.4 127.4 117.2
Net-Net 12/16/02 1/3/06 40.1 32.4 179.9
Pixie 1/5/04 6/14/05 27.8 37.3 42.3
RSO_Annual 11/30/01 12/2/02 27.2 51.4 27.3

OO-Opt 4/28/00 3/18/02 -84.7 270.0 -97.1
Options_(PEG) 1/10/00 11/18/02 -77.6 816.3 -98.6
Russian 3/31/00 2/20/01 -75.2 164.5 -71.2
Cap_RS 12/29/00 1/22/02 -70.9 124.0 -73.1
OO 4/28/00 3/18/02 -65.4 149.7 -86.5

When the Cherry Tree began in October of 1999, it was a collection of three annual and five monthly screens (and one soon-discarded weekly). Since then it's been tweaked and re-tweaked beyond recognition. But let's go back in time ( and see what would happen if I have never tweaked the thing. OK, not quite: I'm getting rid of the weekly Bullet (that I was on the verge of letting go when I began my reports) and the Foolish 4 (which didn't last long either, and I can't find recent picks for). Also, even though I ran by annuals on a December Cycle, I'll see how they did on an October cycle since that's when the Cherry Tree began. Scaling each screen according to the amount of money I had in it when I began, I'm left with this big blend:
If I have stopped the experimentation right then, it looks like I would have ended up with a 1% CAGR. OK, a little less to account for trading costs, probably right around the S&P 500's -0.4%. Not a gain, but not a loss. Not ahead of the market, but matching with it (and beating QQQ nicely). Of course, it's worth noting that I would have had almost exactly the same success sticking the money in my mattress (no one's tried to steal my mattress since Oct 1999).

But here's the real kicker: Moe won. Congratulations, Moe.

When I started all this, Moe asserted my byzantine screen combinations wouldn't be able to be a simple blend of the four basic screens that much of my portfolio was based upon: four positions each of RS13, RS26, PEG13, and PEG26, all traded monthly:
Turns out I never did beat that. His combination has earned a 10% CAGR over these last 7 years, not accounting for trading costs.

All this time, I could have kept it simple.

- Jamie
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