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Would you please help me to understand what is 'Real money stock Picks board' and what is 'Messed-Up Expectation Portfolio'?

Hi Afai,

Happy to! And glad that you found this board. :-)

In Nov. 2010, the Fool launched a set of small portfolios ($5,000 each, and contributing $1,000 each month) that are run by several of the in-house analysts at the company. It was originally called "Rising Stars" but the name was later changed to "Real-Money Stock Picks." A real improvement, huh? :-) Here's the overall page: http://www.fool.com/specials/realmoneyports/real-money-portf...

Each of us presented to the organizers an outline of what type of investing we would do and I chose an idea that had intrigued me that I read first in a book by Michael Mauboussin, chief investment strategist at Legg Mason (and who's spoken at TMF), called Expectations Investing.

In that, he pointed out how hard it is to value a company given that there are dozens, if not hundreds, of assumptions built into any model. Instead, he wrote, turn the DCF model exercise on its head and see what the current price has to say about the growth assumptions currently baked into the price. Then compare those to what the company has done and is likely to do in the future. Buy when expectations are low and sell when they're too high.

Thus the Messed-Up Expectations portfolio. http://www.fool.com/specials/realmoneyports/real-money-portf...

More details on this, at least how I started with my thinking, can be found near the beginning of this board.

Since then, I've added a couple of other criteria, the biggest of which is looking for a catalyst that the company could use to correct the market's misconception.

For SolarCity, I think the messed-up expectations come from the confusing business model, the uncertainty of being able to operate successfully with that model, and the negative connotations all things "solar" still labor under, even thought there is a very big push worldwide toward this type (and other types) of non-fossil fuel energy.

Feel free to poke around and ask questions.

Cheers,
Jim
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