Thursday, June 26, 2008

Best Bears in my Portfolio - shorted stocks

Here is a portfolio that I started about 5 weeks ago and I have to follow the guidelines of hedge/mutual fund managers and stay compliant. My first month, I have beat the S&P by apprx +25% !!! Bears never looked so good, take a look at these gains (all within the last few weeks) They are looking for the top "joe-smoe" investors in the world; plus they use the the top virtual-investment ports to take the trades and apply them into their own real mutual fund. After my first month, I am currently topping a few thousand others! **NOTE- the 3 with the lowest returns were purchased today

In order to be eligible for rankings, you must follow the same diversification rules that real-world fund managers must face. We require that you meet these rules for a majority (51%) of a given quarter in order to be compliant — so we‘ve designed this report to help you keep track of your current compliance statistics, as well as your historical compliance and ranking eligibility.

Because your maximum short value represents a 2:1 leverage in comparison to a long fund, the percentages below are calculated as if your maximum short position represented 200% of your position value. There are a few simple rules to remaining compliant:

  1. You cannot short a stock so that it will increase a short position to over 25% of your portfolio‘s short value. If you violate this rule, your fund's effective inception date will be reset to the date that you bring the fund back into compliance with all compliance rules (not just the 25% rule).
  2. No position may represent more then 10% of your fund. If a short position represents more then 10% of your fund value your fund will be out of compliance until you cover enough of the position to bring it below the threshold. (However, your inception date will not be reset.)
  3. Your short investments must total at least 65% of your fund value. For example, if your fund starts out with $1,000,000 in cash, you must have $650,000 in short positions to be compliant.
  4. You may not have negative excess margin for more than 7 days per quarter. If you have gotten a margin call because your excess margin has disappeared, then you have violated this rule for one day. Each new day that you have negative excess margin adds to that total.
While these rules can be challenging, except for the first rule, you need not meet all these rules on all days. See the table below for details.

left curve compliance report card right curve

Rule: Period: Today
  • You cannot purchase stock such that it will increase a position more than 25% of your portfolio.
Always Pass
  • No one stock can exceed 10% of your portfolio assets.
Majority of Quarter Pass
  • You must be at least 65% invested.
Majority of Quarter Pass
  • Excessive margin.
7 days/Quarter Pass

left curve current compliance - details right curve

To understand why you are or are not compliant currently, review each of the rules in more detail below

Rule #3 says that you must be 65% short. The table below shows you your status with regards to this 65% rule:

Your Current Fund Value $1,272,372.55
Your Current Short Value $967,681.93
Your Short Percentage 76%

Rule #2 says that no position must represent more then 10% of your fund value:

Symbol Price Shares Value Current Return Portion of Fund
CTX $14.22 -6,000 -$85,320.00 12.90% 6.71% Details
AAPL $168.26 -500 -$84,130.00 0.28% 6.61% Details
AVTR $31.21 -2,600 -$81,146.00 10.14% 6.38% Details
CRZ $4.41 -18,000 -$79,380.00 23.03% 6.24% Details
CNA $26.06 -3,000 -$78,180.00 4.16% 6.14% Details
BYD $12.72 -6,000 -$76,320.00 21.29% 6.00% Details
MCGC $4.20 -18,000 -$75,600.00 26.15% 5.94% Details
SOHU $68.04 -1,000 -$68,040.00 5.22% 5.35% Details
LAVA $6.72 -10,000 -$67,200.00 -0.05% 5.28% Details
AIG $28.09 -2,200 -$61,798.00 28.58% 4.86% Details
LCAV $5.13 -10,000 -$51,300.00 47.31% 4.03% Details
MBI $4.39 -10,000 -$43,900.00 44.92% 3.45% Details
BCS $24.19 -1,500 -$36,285.00 22.19% 2.85% Details
IBCP $4.11 -6,797 -$27,935.67 28.03% 2.20% Details
APOL $47.40 -500 -$23,700.00 5.10% 1.86% Details
ATE $21.65 -673 -$14,569.84 16.23% 1.15% Details
CTBK $8.66 -1,487 -$12,877.42 -1.41% 1.01% Details

Finally, Rule #4 says that you may not have more than 7 days per quarter with negative excess margin. The table below tells you your status with regards to that rule: