jcreech

Diversified or Concentrated Portfolio: Which Is Better?

Have you considered using 1/2 Kelly to help decide which stocks to overweight in your portfolio and which ones to underweight? If I recall correctly, the Kelly formula was developed by someone at Bell Labs and was developed for gambling situations (maximizing return while minimizing risk). Rob Crawford has something on his wordpress site (I think you can find a link through his Motley Fool personae - bert111) about using it for stocks, recommending that the value be halved to increase safety. Just a thought - good luck.

Shipping Industry Has Too Many Ships Being Built

Steve,

Thank you for sharing these three reports. They have very much appreciated.

Why Short Sellers Are the Heroes of Wall Street

I don't have a problem with short-sellers, but I do have a problem with naked shorts. Although I am ambivalent about the uptick rule, I can see its advantage as a small circuit breaker from an onslaught of short sellers. However, by prohibiting naked shorts, the very act of borrowing shares for allowable shorting should suffice for the circuit breaker.

The three things I would add to a regulatory scheme are: (1) end of the day verification that any shorted shares involved a legitimate borrowing of owned shares (which may be onerous enough to have a chilling effect on shorting), (2) a public filing with the SEC by those who short 5% of a company's stock (equivalent to the long requirement already in place), and (3) the resources and backbone to enforce SEC regulations.

Can't Turn My Back - Cramer's Lightning Round (8/26/08)

To be fair, his response was in the lightening round - which is more of a take on the sector. Even when he was doing his head-to-head with Lowes and Home Depot, he made it clear that investing in this sector was premature. He also spent a good deal of time that show discussing that the housing sector recovery was about 10 months away.

Given all that, I am long on LL, but I agree with Cramer that the sector has hurt the PPS. Because the market lumps LL in with all of the other home improvement stocks, its tremendous earnings, ROE, ROA, etc. have done little to enhance the PPS. I took his message to be that given the state of the sector, LL is too dangerous of a speculation now; if you are going to invest in the sector anyway, you should choose Lowes as the best in breed. As long as LL continues to grow like it has, it will eventually be recognized by the market, but I no longer expect that recognition to come immediately - I expect that recognition to come sometime in the spring, but it is possible that it might come as early as the next quarterly report. Any earlier movement in the PPS will be squelched quickly by profit taking.


On Aug 27 11:17 AM Norman Lepoff, M.D. wrote:

> I remember when he loved F at 9. This guy does not belong on the
> air.