Forum Archive Index - January 2001

["Peter Maiden" <pmaiden@xtra.co.nz>]

Mike - great effort in putting together the beat the broker competition.

 

Good idea in putting together the Peoples Pick - being the most popular selections.

 

That prompted me to maybe take it bit further and create the Sharechat Growth Selection Index - the SGS.

 

From the hypothesis that Sharechat contributers are a learned lot who believe that they can outperform the market then a selection of shares selected by this group of people will outperform the market. The combined wisdom of 61 Sharechat contributors who put selections forward is immense.

 

Proof is the outperformance of these selections against the NZSE40. How Peoples Pick performs in the competition will show this but I was thinking of monitoring progress more regularly.

 

However (bored waiting for a plane) taking it a bit further  I have created a model to track this SGS index. The stocks involved are FFS, TEL, FRU, ITC and THL. Whereas the competition has equal weighting for each in the portfolio I have applied a weighting relative to the number of times the stock was selected (ie FFS has a 28% weighting - being 22 selections out of 69 selections of these five stocks). I have indexed the SGS and the NZSE40 to 1000 as at Jan 12th. Easy done and I'll see if Ben can get a graph posted weekly so we can monitor the progress of our combined wisdom.

 

Once the world is aware how successful the Sharechat Growth Selection is everybody will want to get on the bandwagon. Even next year the Herald will want to include it in their picks for 2001.

 

Fantastic performance to date by the SGS - last four days up 6.5% while NZSE up 2.2%

 

Dumb idea or worth proceeding?

 

I am going to continue measuring as part of a case study on the subject that teams generally produce better results than individuals. Sorry Mike - but the competition has provided a good sample for such for an exercise.

 

Peter