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February 26, 2006

There Is Now Data

...and it is good. Well, two weeks old, but good, nonetheless. On the Chock list:

- Password protect the admin area
- Make a capsule version of printPortfolio() that just gives a snapshot of the funds, for placement on the front page.
- Figure out what to do with all the money the Daily Fund will be making, and then implement it. A cash reserve table?
- Gussify the main page (including making a banner of some kind).
- include() the funds on the main page and link to them.
- Promote my little ass off.

In the near- to mid- future:

- write something that does: if the entry removed from the historical data table repressents the last such entry in one of the fund's holding tables, removes the corresponding entry from the holdings table and if there are no other funds that own(ed) it, also removes it from the stock data table.
- Figure out how to make a trend-line graph based on the historical data., and implement it.
- Implement user search functionality in and around this, so visitors can tack the fund over time, etc.
- Improve the data-scraping functions so that they don't SYN the poor Yahoo servers quite so much.
- Write something that will, based upon the holdings data, scrape the hisotical .csv's and simulate the fund over the past few months, years, or whatever.
- Declare victory over Jim Cramer.
- Get on with life.

Posted by The Contrarian at 02:38 PM | Comments (57)

February 25, 2006

A Link For The Dinks

None of this will work because there is no, well, data in the database, but nonetheless feel free to check it out:

It's ALIIIIIIVE!!

You may also notice that the super-secret admin area isn't password protected yet. Be nice. I've given this link to a few people now, and therefore nobody besides people I know should be reading this, and I trust you. I trust that you will be nice to me and not hack this site in the at least 18 ways I know I have yet to close and the 4 billion ways I haven't even thought of yet.

That being said, I am also logging your IPs, bitches. I don't trust you assholes THAT much.

Posted by The Contrarian at 04:03 PM | Comments (290) | TrackBack

February 24, 2006

The Cramer Contra Fund begins

Over the next few days I'm going to begin figuring out how this will work, setting up some ground rules, and so forth.

The basic idea is this: Jim Cramer is a high-profile financial advisor who every weekday goes on television touting a new stock he thinks will make money over the relative short term: say 4-6 months. I propose that the exposure he lends said stocks will immediately lead to an upsurge in demand, raising their price and ultimately over-valueing them. Therefore, if I short the stock - betting that over the relative near term the stock will decrease in value - I will make money.

There are two reasons (well, three, but more on that later) that I propose to undertake this project:

1. I believe that most financial advisors, and especially those with the disadvantage of being on the record on so public a medium as television, will, over the long term, rarely do better than the market average; indeed, most do worse. If one could track Cramer's picks over the long term, I believe it unlikely that he would do much better than the S&P 500. I find it extremely likely that he would do worse. I mean to demonstrate this.

2. Therefore, eschewing a sound investing strategy that involves the mitigaiton of risk through diversification across multiple holdings across multiple sectors in favor of holding 4 or 5 "Cramer picks" is unwise. (Personally, I believe that even buying a single individual stock requires unnescessary exposure for the average investor, but I am more conservative than most). The short of this: Cramer and his ilk do more to hurt the public with their advice than they help it. They encourage the kind of day-trading speculation that over recent years has gotten people in to some very big trouble. I mean to discourage this.

3. I'm looking for a new project, and at the same time would like to learn more about finances and the marketplace. I mean to pursue this.

So why pick on Jim Cramer? Well, for one, he's an easy target. I know that's a poor answer, but it can't be helped. With his show "Mad Money" on CNBC, his nationally synicated radio show, his email newsletters, his several books, his self-help systems, and on and on, in a very real way Jim Cramer is to investing what Oprah is to everything else. He is by far the most visible investment advisor out there, and even if I didn't target him directly, I would, at some point, have to engage him. May as well get going with it from the top.

Perhaps more importantly, however, he is by far the most flagrant perpetrator of the kind of advising offense I described above. Cramer claims to offer a system, claims to tout diversification, but when it comes right down to it what he really encourages is day-trader get-rich-quick fantasies. Every day he gives literally dozens of predictions, and every day highlights some stocks as ones he believes can go nowhere but up. If he were honest, he would say this: "Look, some of these will go up, some of these will go down, so buy a bunch of quality stocks and hold them, and over the long term, on average, you should see some decent returns." But instead, he says this: "I RETIRED BY THE TIME I WAS 45, AND SO CAN YOU!!!" Cramer doesn't offer financial advice, he offers fantasies.

So that's where I'm coming from. I've got to figure out some ground rules, as I've said, because I want to maintain at least the appearance of propriety. The idea is to have basically two funds: the Cramer fund and the Cramer Contra fund. Each day, the Cramer fund will buy his 'featured' picks as shouted on his "Mad Money," while the Cramer Contra fund will short them. Cramer's picks come out after the market closes. I think it would be fair to use the closing price of the following day. By that time, two things will have hypothetically happened: anyone who watches his show should have had an opprotunity to act on his suggestions, and the Cramer Effect will have had a chance to act. I think $1000 per day should be good, split up evenly between the one or two or three securities he recommends. Then, what's a reasonable hold time? I think maybe 3 months? I do want to be realistic and fair to Cramer, while at the same time I want to realize some fruits of this labor in a reasonable amount of time. Its all just hyperbole until I start demonstrating some realized gains. Ok, then, three months. 90 days. Then on day n + 91, the realized net gains will be reinvested much like the original $1000. If there is a realized loss, no investment will be made that day. If either fund is in danger of going broke too fast (and this should be more than obvious by around day 60, I'll re-work the rules a bit.

Ok, the more I write, the more I realize that this is going to take some programming. I hope LAMP is up to the task, or else I'll have to teach myself Perl or Python or something. I think it should be.

Posted by The Contrarian at 03:26 PM | Comments (262) | TrackBack