Shares - just a bit of fun

srcandas

I'm sorting a share portfolio at the mo for my SIPP and was thinking about 'Monkey and his pin' and the thought often published that many investors sell their best performing shares (take the profit) and keep the fallers (well they must recover soon) and some say this rarely works out.

So (as I say just for fun) I thought how can I test this?

Like many in the morning I look at the BBC pages and see the top ten and bottom ten performing shares - hoping mine are in the former and not the latter).

So next week each day at 10am (unless I'm called away) I'm going to put £1000 in each of the loosers and £1000 in each of the winners. Then wait a month and see what I have.

Which group will win?

If anyone wants to have a guess post away. I'll report progress and results :beer:

I reckon the fallers.

ps' I know it is not a fair test but c'est la vie

Newbie2saving

Are you using real money or a fantasy portfolio? Great game!

I am with you on the fallers.

I'm watching this thread now eagerly...

srcandas

Newbie2saving wrote: »

Are you using real money ...

:eek::eek::eek: Nooooooooooo

although I may end up regretting it!!!

I'll put them in trustnet virtual portfolios allowing £40 costs for buy/sell/stamp/spread.

Should be sort of interesting hopefully.

PREDICTIONS:

The Gainers:
The Fallers: Srcandas, Newbie2saving

Hooloovoo

srcandas wrote: »

I'm sorting a share portfolio at the mo for my SIPP and was thinking about 'Monkey and his pin' and the thought often published that many investors sell their best performing shares (take the profit) and keep the fallers (well they must recover soon) and some say this rarely works out.

Where do they say it rarely works out?

I thought selling the winners and buying more of the losers was called "rebalancing" and actually recommended to "lock in the profits" and help bring the risk back to your desired level.

I thought, in general, people bought high when stocks were performing and then sold low to cut their losses.

Newbie2saving

srcandas wrote: »

:eek::eek::eek: Nooooooooooo

although I may end up regretting it!!!

I'll put them in trustnet virtual portfolios allowing £40 costs for buy/sell/stamp/spread.

Should be sort of interesting hopefully.

PREDICTIONS:

The Gainers:
The Fallers: Srcandas, Newbie2saving

Well when I read your initial post I thought you must have a lot of money to experiment in this fashion :rotfl:

The thing with virtual portfolios (I have a couple on the go) is that they can be really scary and make you think twice before jumping in, on the otherhand they can sicken you when you see a massive gain! From experience of this virtual world, the loss is a much bigger sickner than the gain though! Good luck...

srcandas

Hooloovoo wrote: »

Where do they say it rarely works out?

I thought selling the winners and buying more of the losers was called "rebalancing"

I think it is based on analysis of longer term holdings. Say a person does their best analysis and picks 10 companies that they believe are well managed and undervalued. At the end of the year 5 have grown by 10% and 5 have lost 10%. The temptation might be to sell the 5 growth holdings (take the profit) and buy more of the 5 losers to dilute the average share price (the loss).

Analysis by some has demonstrated that it is better to sell the losers and re-invest in new options (or even the 5 winners). Good companies do not just grow for a year. Just as bad companies (with fundamental issues) just do not under perform for a year.

I guess it is in part based on change takes time and can be risky.

Not sure I understand why it would be related to rebalancing.

But there are a million theories for a million outcomes

But what is your gut feel for the losers and winners? :beer:

gadgetmind

srcandas wrote: »

So next week each day at 10am (unless I'm called away) I'm going to put £1000 in each of the loosers and £1000 in each of the winners. Then wait a month and see what I have.

A month? I'm glad we're thinking long term here!

srcandas

gadgetmind wrote: »

A month? I'm glad we're thinking long term here!

Don't be cheeky and tell us which horse your money is on

tushingham

giving the timescale and current climate i'll take a punt on the winners please!

what would be interesting would be to check 3 days in a row in a months time. with the potential volatility it may change each day! :o0

srcandas

tushingham wrote: »

giving the timescale and current climate i'll take a punt on the winners please!

what would be interesting would be to check 3 days in a row in a months time. with the potential volatility it may change each day! :o0

Will do and perhaps this will run

What interests me is that some shares are very volatile and can appear in both. Will be interesting to see. I expect my Lamprell will get in there somewhere along with the banks

The Gainers: tushingham
The Fallers: Srcandas, Newbie2saving

tushingham

how do you decide which group has 'won' if certain shares have been in both groups and had a £1k top up several times? you wont know whether any 'profit' is belongs in the winners or losers group at the end?