Gyroscopic Investing

I hereby nominate my Asian Fraud Portfolio - The AFP - I will invest in companies in the Asia-Pacific region that are committing financial fraud and are due to suffer complete stock value collapse once the fraud is found out.

Some of our holdings will be:

25% Sino Forest - Chinese forestry plantation that recently caused John Paulson's hedge fund to lose $500 million.

25% Yongue International - Traded at $8 in January and has a price target of $1 due to widespread fraud and false statements to investors:

Yongye falsely claims its main fertilizer product, Shengmingsu, was developed by 38 scientists at Stanford University: Absaroka provides a letter from Stanford University certifying it has no connection to Yongye's Shengmingsu fertilizer and Yongye does not have permission to utilize Stanford's name, trademark, or images in its advertising and marketing efforts.

25% TEPCO - If you're going to commit fraud, you should really do it on a massive scale, like fraudulently certifying your reactors that are built within a tsunami zone, are safe and designed to handle a tsunami.

25% Sino Clean Energy - This one is a really great fraud:

Sino Clean Energy (NASDAQ: SCEI) is the most outrageous Chinese fraud to date committed against U.S. investors. SCEI management pre-announced its first quarter 2011 results Tuesday in a press release stating that revenues were $33.7 million. In its 2010 10-K SCEI reported 2010 full year revenues of $106.2 million and adjusted net income of $27.9 million. However, four months of surveillance of SCEI’s three coal water slurry fuel (“CWSF”?) factories clearly show nothing more than backyard-sized money losing operations. Incredibly, in December, SCEI’s fee-hungry investment bankers, Rodman & Renshaw and Axiom Capital Management, raised this scam company $33 million ($29.6 million net proceeds after deducting $3.4 million of investment banking, legal, due diligence and other fees). Did the banksters do any due diligence at all? Simply observing these idle operations proves SCEI is a total fraud, a fact urther confirmed by official tax records. Investors will never recover any money from SCEI and ts shares are worthless.

Here is a chart of the last 6 months performance of SCEI:

Okay, here is the Arsenic House Portfolio:

25% TBT (shorts treasuries)
25% LNKD (LinkedIn)
25% JNK (junk bond ETF)
25% RSX (Russia equity index)

I plugged it into SmartMoney's Portfolio Tracker with a starting balance of $100,000.

We'll see how it goes.

Good idea - I just created a Smartmoney.com portfolio with $100,000 and bought $25,000 of each.  The only problem is that Sino Forest is only traded on Toronto's stock exchange so I can't find a ticker symbol that works.  I'll have to manually update the price.

I'm a little afraid that my portfolio may actually gain money!  I mean, these stocks are such losers they have nowhere to go but up.  How would I feel then, if my Suicide portfolio outperformed my PP? 

Storm wrote: I'm a little afraid that my portfolio may actually gain money!  I mean, these stocks are such losers they have nowhere to go but up.  How would I feel then, if my Suicide portfolio outperformed my PP?   :o

Good advice for the SPer is probably to be patient and just have faith that over time your SP will lose money. 

You can't let yourself be distracted by gains that occur on any given day.

i have a question...  one of my picks hasn't traded since Apr 26,  does that mean it wont work for a suicide portfolio? 

MediumTex wrote: I plugged it into SmartMoney's Portfolio Tracker with a starting balance of $100,000.

I was going to use $100 trillion but I'll go with this wretched, puny $100,000.  (I can lose that much playing nickel slots.)

Horror: So far I'm up $73.56.  I'm starting to panic.  I know that I need to have faith that my horrendous approach to investing really does suck, but sometimes it's hard.

Lone Wolf wrote: Horror: So far I'm up $73.56.  I'm starting to panic.  I know that I need to have faith that my horrendous approach to investing really does suck, but sometimes it's hard.

This SP exercise is not as dumb as it sounds.

It's actually very stimulating to see whether we are any better at picking losers than we are at picking winners.

I suspect it will be harder to do than it looks.

The strength of the Arsenic House Portfolio is already starting to shine through, though.  It's down about $100.  I just hope we can hang onto these losses into the close.

i am now down $1,190.48    :P   and that is with only one stock pick getting trade activity,  

l82start wrote: i am now down $1,190.48    :P   and that is with only one stock pick getting trade activity,  

Is that for the day or since you set up your SP?

just today  ;D

  Symbol      Price Paid Shares           Trd Date  
  LEXPQ.PK          0.0075 3,333,333.33   Jun 8, 2011
  TXEGQ.PK         0.002 12,500,000       Jun 8, 2011
  QSGIQ.PK        0.21   119,047.61          Jun 8, 2011
  GACFQ.PK       0.0011 22,727,272.72          Jun 8, 2011





subscriptions to my news letter will be on sale soon 

Arsenic House was down $1,157.54 for the day.

Not too shabby.

MediumTex wrote: This SP exercise is not as dumb as it sounds.

It's actually very stimulating to see whether we are any better at picking losers than we are at picking winners.

I agree.  For all my bombast, I'm worried that I'll make a tremendous amount of money and be laughed off the playground.

Never mind, I take it back.  I'm now down $500 in under 2 hours!  At this rate I'll be living under an overpass in a month!

MediumTex wrote: Arsenic House was down $1,157.54 for the day.

Not too shabby.

well done !

Welcome to the Every Never is Now Fund (ENNF). 

25% ARR - REIT with 18% dividend!!! How do they do it? I don't know and I don't care!
25% UPRO 3X S&P 500 - It's like owning 75% Stocks! SPY is for suckers!
25% PCY emerging markets debt - Uruguay bonds yeilding 9.25%, I'm in!
25% GLL 2X short on GOLD - that bubble is going to pop!

The funny thing I learned from this is that no matter what crazy idea you want to invest in, their is probably a ETF for it.

Haha - I win suckers!    Down $8206.37 in only 1 day!

Apparently Tokyo Electric Power is down 0.50, or 12.99% in just 1 day.

impressive.... 

I thought we were starting tomorrow, the morning of the ninth. That said, I would like to offer the Past Performance Portfolio. It is a 50/50 allocation to the top two ETF performers over the past 12 months; I committed to this before looking them up. I have a bad feeling about how this will turn out, but as they say, I am playing with house money.

Proshares ultra silver AGQ (up 209%)
Direxion Daily Energy Bull 3X shares ERX (up 152%)

May the worst man win.

I think that the double and triple inverse ETFs are probably a little unfair, since through decay they are going to go to zero no matter what happens.

I just wanted to point that out, though for purposes of our competition it probably doesn't matter.

Storm wrote: I hereby nominate my Asian Fraud Portfolio - The AFP - I will invest in companies in the Asia-Pacific region that are committing financial fraud and are due to suffer complete stock value collapse once the fraud is found out.

This one will be fun to watch.

MediumTex wrote: I think that the double and triple inverse ETFs are probably a little unfair, since through decay they are going to go to zero no matter what happens.

I just wanted to point that out, though for purposes of our competition it probably doesn't matter.

Yeah, I'd say it doesn't matter much since our contest's duration is only one year. I'm looking at a few of the 2x and 3x inverse ETFs, and it doesn't look like the decay picks up suicide-level steam within a mere year.

I suspect the really jaw-dropping losses in this contest will be due to truly awful ETF and stock picks, not leveraged ETF decay. I could be wrong, but that's my guess.

BTW, 6 Iron is correct that the contest starts tomorrow morning (the 9th). Today was just a warm-up

Darn... I guess I should change my Smartmoney.com portfolio to today's opening prices.  I'm sure the AFP will fail pretty miserably in the months to come without the help of a 7.9% 1 day loss (yesterday).

Craigr, I checked MtGox and BTC is trading over $30 per coin!  We are either at the top of a very large bubble or the bottom of an even bigger one.

Storm wrote: We are either at the top of a very large bubble or the bottom of an even bigger one.

Isn't that always the case? 

Adam1226 wrote:

Storm wrote: We are either at the top of a very large bubble or the bottom of an even bigger one.

Isn't that always the case? 

Yeah, that's always the case.  Athough with my new found forecasting skill, I predict we are at the bottom of a bigger one.  For the purposes of the Suicide Portfolio competition, it is really too bad there is no traded leveraged security that shorts them.

I will officially start tracking my $100,000 FAD (Forecast And Destroy) Portfolio today. 

In keeping with the goals of the competition, I figure I should lose all my investments in two years or so.  Then I can borrow against my paid-off house and continue leveraging my losses.  If I'm lucky, I'll be forced out of retirement and back in the job market with atrophied work skills in three years, tops.  Heck, if I can continue to stay at the bottom of my game, after that my wife will divorce me and I'll be sneaking across the Texas border into Mexico looking for work in the heat of the annual cactus harvest just in time for the next recession.  The only snag I can forsee is that the Tequila industry might not get hit too bad during the next downturn.  We'll see.  Hey, it may not be everyone's dream, but at least it'll prove I can forecast the future.   

 

Arsenic House down $426.80 today.

Nice.

(If it weren't for the crappiness of LNKD I would have been in trouble, but that's why we seek non-correlated crappiness in the SP.)

Gah!!  AFP up $1,368.17 today - I can't even pick losers right...